RINGING UP CALLING CARDS

JOEL ELSON

Selling turkeys via a prepaid phone-card promotion illustrates one of many promotional tactics supermarkets are employing to drive awareness and sales.

The holiday promotion's central theme was buy a turkey and get a calling card to call someone you love at Thanksgiving.

Shoppers who purchased a store-brand turkey got a 15-minute phone card at the checkout worth $5, said Marlene Waltz, director of prepaid cards at Sprint, Kansas City, Kan. She declined to name the chain doing the promotion.

Supermarkets have done much to propel phone cards into the main- stream and help create demand for a product that generally appealed to a limited segment of the population.

In surveying suppliers and retailers on what promotions work best in generating phone-card sales, everything from tie-ins to holidays, frequent-shopper programs and other packaged goods to incentives offering bonus time or special-edition collectors' cards are being used.

Such promotions draw attention to the supermarket as the source for prepaid phone cards, as well as attract new customers, said nonfood category managers.

The best holiday for phone-card promotions, said retailers and suppliers, is Mother's Day, followed by Christmas.

Pat DeWane, vice president of nonfood at Brookshire Bros., Lufkin, Texas, agreed Mother's day is always the best time to promote prepaid phone cards. "We discounted our $10 and $20 card about 10%," said DeWane.

During similar events, Demoulas & Market Basket, Tewksbury, Mass., tripled sales with a $10, 30-minute card promoted at $8.99 and a $20, 60-minute phone card on special at $17.99, said Bill Brietenkamp, director of prepaid calling cards for US Long Distance, San Antonio. "And typically, after the promotion ends, the numbers fall, but not as steep as prior to the promotion," he stressed.

Several supermarket chains with stores in Los Angeles, San Francisco, New York, Miami, Chicago and Houston, which catered to Hispanic customers, ran a co-promotion with Colgate-Palmolive for Mother's Day.

The promotion offered a free 30-minute Colgate-Palmolive phone card with a preprinted gift card attached. The card contained a special bilingual recorded message from the manufacturer.

There were 51,000 prepaid cards distributed under the theme: "Llama a Mama y Acercate a su Corazon," or "Call Mama and Get Close to her Heart," said Jennifer Gannon, marketing coordinator at PhoneCard Express, Hollywood, Fla., the phone-card supplier for the promotion. The goal was to increase case volume.

The phone cards were available with the purchase of two Colgate-Palmolive products, including Colgate toothpaste, toothbrush, Palmolive liquid dish-washing liquid or Lady Speed Stick.

The chains involved "had good results and the promotion was a huge success," said Gannon, who would not identify specific retailers.

Bilingual posters, point-of-sale displays and messages carried on store public address systems highlighted the phone-card offer.

"Once you took the phone card off, the gift card actually became a post card for mailing to your mother," Gannon said.

"The practical nature of using the gift card as a postcard added tremendous value to the promotion."

"Everyday prepaid phone-card margins are still pretty good and in the 30% to 40% range," said Rob Allen, regional sales manager at Cable & Wireless, Vienna, Va. However, when phone cards are sold as a promotional offer, margins usually fall to the 15% to 25% range, he said.

Carr Gottstein Foods, Anchorage, Alaska, has sparked higher sales of its private-label phone cards by discounting the retail price to customers with a Carr's club card. The $10 price tag for a 30- minute card drops to $9 for those with the chain's frequent-shopper club card.

The 60-minute card that sells for $19 is cut to $17 and the 90-minute, $28 card is lowered to $25.

The retailer has gone to customized phone cards featuring Alaskan wildlife scenes, which have been well received by shoppers, said Gary Schloss, Carr's vice president of general merchandise.

"Our prepaid cards designed with three unique pictures of Alaskan wildlife and motif are doing extremely well," he stated. The calling cards are heavily promoted in weekly food ads, in-store signage and point-of-sale materials at each checkout.

Carr went with a store-brand card, supplied by Cable & Wireless, in September. "Branding a phone card with the store name and distinctive graphics spotlights the chain's name and reinforces its image to customers," said the retailer. Previously, the chain sold generic phone cards with the vendor's name.

Customers are purchasing the phone cards in batches of five at a time as gifts for friends and relatives in other states, said Schloss. He said the cards also are popular as collector items because of the animals that appear on them. Conference calling, information services, speed dialing and recharge are enhanced elements of the cards.

Free bonus minutes with the purchase of a phone card have worked well to stimulate sales for Giant Food, Landover, Md.

"It's a very effective promotion," said a Giant spokesman. During such bonus-minute promotions at supermarkets, indeed, phone-card volume soars as much as 30%, said Tim Klapka, sales director for retail products at Catalina Marketing Corp., St. Petersburg, Fla.

Giant boosts its calling-card sales by giving out free minutes to customers who purchase a phone-card certificate from a Catalina POS terminal at checkout lanes, according to the supplier.

The chain's prepaid-card sales campaigns promote five free bonus minutes with the purchase of a 15-minute card, 10 free minutes with a 30-minute card and 15 free minutes with a 60-minute card.

Moreover, this kind of program can be tied in with a frequent-shopper card strategy, said the supplier. POS terminals read frequent-shopper identification numbers and print specific phone-certificate amounts based on the data, Klapka explained.

Discounting phone cards 20% for loyal frequent-shopper club members and playing the lower prices up in a frequent-shopper newsletter enabled Ukrop's Super Markets, Richmond, Va., to generate new phone-card sales, according to a trade source.

Begun in the fall, the promotion alerts the chain's preferred customers to Ukrop's prepaid phone cards that the chain has been merchandising for the past 20 months, said the source. The chain declined to comment.

Retailers like Vons Cos., Arcadia, Calif., and ShopRite co-op members of Wakefern Food Corp., Elizabeth, N.J., are promoting a $20 prepaid phone card at $15, according to Ed Ragar, vice president of national accounts for GTS Global Telecommunications Solutions, Roslyn Heights, N.Y., the firms' phone-card vendor.

At ShopRite, large window posters heralded the stores were selling the $20 card at the lower retail.

This discounting merchandising technique will boost prepaid calling-card sales about 30% to 40% at Genuardi's Family Markets, Norristown, Pa., said Dorrie Martyniuk, operations manager. The retailer alerts shoppers to the lower pricing in circulars and through POS displays.

Running these kinds of off-price specials four to five times a year attracts new and regular customers. A $20 card specially priced at $15 is the most popular, she said. "Discounting automatically attracts those already using phone cards because they realize it's a good deal," she added.

"Consumers always look for lower pricing in phone cards, which is still a growing market for us," said Martyniuk. Genuardi has started to merchandise its prepaid cards in the greeting-card department to increase impulse turns.

Other supermarket chains have gone to added-value packages. This fall, for example, retailers began promoting Sprint NFL-themed Spree phone cards. Consumers who purchase specially marked packages of $10 and $20 Spree cards receive one of 12 limited-edition Spree NFL cards tucked inside.

The cards are worth an extra 10 free minutes of long-distance time and carry the glossy images of NFL stars and Quarterback Club members, and official team and NFL logos.

The promotion enables food chains to "capitalize on the growing popularity of prepaid cards," stressed Waltz. General Mills has also randomly inserted 30-minute NFL phone cards into its various grocery products.

Waltz said the two promotions double consumer awareness and give retailers added sales momentum.

To further draw consumer awareness to phone cards, Sprint schedules appearances of two simulated racing cars, equipped with Sega games. Customers can sit in the cars and experience the feel of NASCAR racing while messages inside the car tell consumers to buy a Spree card and get two rides in the simulator.