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O'Reilly Zones in on C-Stores
"America's future is going to built on people like you."
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Issue Date: CSP Daily News, July 9, 2008


Prepaid Hybrid
Retailer finds profit in long-distance cards with a sweepstakes twist
By Angel Abcede
  - ADVERTISEMENT -
WAYNESBORO, Miss. -- What do you get when you cross a prepaid, long-distance card with the chance to win $1,000? Incremental sales, according to retailer Barry Rose. Three months into the sale of a combination prepaid-calling card and sweepstakes opportunity, he has seen average card volumes between 800 and 1,000 per month per location at his 42-site chain, the marketing director for Clark Oil told CSP Daily News

"I was looking for incremental sales," Rose said. "We've seen $30,000 to $50,000 a month." 

Essentially, the initial promotional product is a long-distance calling card that costs $1 to $2 and carries five or 10 minutes worth of call time. Along with the card comes the chance to win anywhere from $1 to $1,000 via an attached sweepstakes, according to Brent Buchanan, COO for Pre-Paid Promotions Inc., Montgomery, Ala. Within each roll of 1,500 or 3,000 cards are a certain number of guaranteed winners, with 62.5% of a roll's value going toward prizes. 

Before allowing the product in for testing, Rose initially challenged card suppliers by asking that no other profit centers be sacrificed for its introduction. "We weren't going to take down novelty, candy or lighters for this," he said. 

To accommodate Rose, officials with Pre-Paid Promotions worked to rearrange the front-counter space at his retail sites. The company also emphasized the legality of the product, saying it falls in line with federal and state sweepstakes requirements. And after Clark Oil's nine-store test in the mid-Mississippi region, Rose decided to roll the product out to the entire chain. 

Though an effective profit-maker in and of itself, the cards also act as promotional tools for long-distance cards priced at higher increments, Rose said. He did not have statistics on how the initial, promotional cards affected sales of the $3-$5 long-distance cards he carries. The chain as yet does not carry Pre-Paid Promotions' more expensive long-distance cards. 

Demand rises as customers win, Rose said, but that energy only comes from building awareness. Word of customers' winning experiences spreads quicker in smaller towns, but in larger markets, more has to be done. He said he has seen the product at his competitors' locations "buried to where it looks like a collage of product and equipment." 

To that end, Mike Moore, vice president for Pre-Paid Promotions, said that banners, floor and counter mats, danglers and incentives to employees help communicate the value of the product.

Rose plans to do more to tell customers how much people have won as a way to generate continuing excitement. "I don't think we've reached the ceiling yet," he said. "I've got some things to do, but so far, I'm happy with the incremental sales."

Innovation Category: Product Assortment

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