Ex-Southwest Airlines Exec Sees Industry Parallels in Prepaid Card Competition, Consolidation (March 6, 2013)
March 6, 2013
The prepaid card industry may appear to have little in common with the airline industry, but prepaid card marketers could learn a few lessons from Southwest Airlines about surviving turbulent times and transforming commodity-like financial services products into unique and successful brands, Southwest’s former top executive told attendees during a keynote session at the Prepaid Expo on Tues., March 5 in Orlando, Fla. Like the airlines’ experience over the last couple of decades, the prepaid card industry is facing significant pressures from competition and consolidation that are forcing change, Howard D. Putnam, Southwest’s president and CEO from 1978-1981, said. While consolidation killed off 77 U.S. airline brands over the last three decades, Southwest, founded as a small, regional airline in 1967, climbed to become one of the fastest-growing and most profitable operators because the company refused to follow the pack, Putnam said. Prepaid card marketers could borrow from Southwest’s core strategy and work to change consumer perceptions about the product, he suggested.
Southwest broke industry rules by eliminating meals and seat assignments, focusing instead on efficiency, value and “a positive customer experience,” Putnam said. Prepaid card marketers have a similar opportunity to “change the way the game is played” by designing products to suit new customers, including millions of U.S. consumers who are “underbanked” and dissatisfied with traditional U.S. financial services offerings, he said. “If you can sell a vision or an experience, you are developing a brand,” he said, urging prepaid card companies to simplify their messages, rely less on “confusing” and technical language and step up “what good customer service might be.”
