considerations to ensure new products & product ......receive and manage discount offers/coupons...

Considerations to Ensure New Products & Product Enhancements are Successful

May 8, 2012

© 2012 Total System Services, Inc.® Confidential and proprietary. All rights reserved worldwide.

Agenda

• Introductions

• What We Hope to Accomplish in the Session

• Setting the Stage: Why Make Product Changes?

• What Are Consumers Doing & Saying?

• Proposed Framework, Components and Questions to

Ask/Answer

– Interactive Discussion

• BREAK

• Continuation of Framework Discussion

• 2012 Consumer Survey and Focus Groups: Questions You Might

Like Included

© 2012 Total System Services, Inc.® Confidential and proprietary. All rights reserved worldwide. 2

Objectives for Session: What We Hope to Accomplish


What We Hope to Accomplish in the Session

• Provide data points and ideas on why it is more important

than ever to proactively manage your products

• Provide a business-focused framework for product

launches/enhancements, including the specific components

to consider

• Solicit workshop attendee ideas on what other components

should be considered when launching new products or

product enhancements

• Discuss any specific desired questions to include in our

2012 Consumer Survey and Focus Group Sessions (results to be available at ATM, Debit, Prepaid Forum in October)


Setting the Stage: Why Make Changes?


Why Make Product Changes?

6 © 2012 Total System Services, Inc.® Confidential and proprietary. All rights reserved worldwide.

Why Make Product Changes? Explosion of Mobile & Connected Devices

Average US Consumer Household Will Own 5-10 Web-Enabled CE

Devices by 2014. McAfee ‘Digital Assets’ Survey 2011

Forty-one percent of consumers surveyed spend more than 20 hours per week

using a digital device for personal use. IN SAT Consumer Survey 2011

The number of internet connected devices is set to explode in the next four years to

over 15 billion - twice the world's population by 2015. CISCO 2011

By 2015, Asia Pacific will account for 48% of all purchase transactions,

with global growth from $10 trillion in 2010 to $20 trillion in 2015. The Nilson Report 2011

In 2014, 340 million global mobile users will use mobile payments, with such

transactions totaling $245 billion, up from $32 billion last year.

Gartner Group 2011


Who are Some of the Industry Disruptors?

eBay

Amazon

Walmart

Retailers

Linkedin Facebook

Social Networks

CFPB

Federal Reserve

Regulators and

Consumer Advocates

Nokia

Motorola

Apple

Mobile Enablers

PayPal

Square

Alternative Payment

Companies

Google

Yahoo

Information Companies


What New Products Accomplish

9

Accelerate revenue growth and drive competitive strength

Required to adapt in a fast changing market environment-

maintain and strengthen customer satisfaction

Protect core business from obsolescence and margin

compression

Deliver cost savings and capital efficiencies, in

addition to new revenues


What Types of Things are Consumers Doing and Saying?


2010 Federal Study shows 109 billion noncash payments

Distribution of Payments


0

5

10

15

20

25

30

35

40

Debit Checks ACH Prepaid Credit

Breakdown of # of Payments Debit

37.9B

Up 14.8%

Checks

24.4B

Down 7.2% ACH

19.1B

Up 9.3%

Prepaid

6B

Up 21.5%

Credit

21.6B

Down 0.2%

Source: Federal Reserve 2010 Study

Key Takeaways

How Consumers Are Paying: “Pay Now” Trends

According to the Federal Reserve Study, debit use increased at the

expense of checks, cash and credit

• Debit now accounts for 42% of in-store transactions

Debit card ownership remains highest among the various payment

types at 74%

Millennials (ages 18-34) prefer debit and do not use checks

Debit dominates as the consumer payment preference in many

merchant categories

Older consumers seem to have more experience with data breaches

and unauthorized charges and this appears to reduce their debit

preference and drive them to more credit card use in certain instances

In spite of debit’s “pay now” nature, many budget conscious consumers

still use cash to ensure spending discipline


Sources: 2010 Federal Reserve Study; TSYS and Mercator 2011 Online Survey and Focus Group Results on “How Consumers Pay”

Payment Card Use by Location


Source: TSYS and Mercator 2011 Research Study on How Consumers Pay and How That May Change in the Future

Consumer Commentary from In-Person Focus Groups

14

I check incessantly to see what

is in there (my balance)

I heard that because of identity

theft, it is better not to put in

your PIN number

(to check my balance) I use my

phone, my iPad, my computer.

There’s an app for that!

I go online to Google or

Facebook everything

I like to spend money

I know I have

If I need cash, I’d

rather make a

purchase than use the

ATM (for cash back)

It’s very annoying to stand

in line behind someone

writing a check

Some places

don’t even take

cash anymore



Evaluation of New Products, Services, Debit Enhancements

15



What is of Most Interest to Consumers About Mobile?


Compare prices when shopping

Receive offers and promotions for where

you are

Track finances on a daily basis

Receive and manage discount

offers/coupons

Buy things at point of sale

Use as membership card

Use a form of photo ID

Purchase tickets to events

Organize and track gift cards, loyalty,

reward points 21%

23%

23%

24%

25%

31%

31%

33%

48%

0% 10% 20% 30% 40% 50% 60%

Source: Federal Reserve Bank’s Consumers and Mobile Financial Services, March 2012

Considering what is going on in the industry and

what consumers are saying – is there a specific

new product or product enhancement we should

use as an example?

Question 1

17

1.


Proposed Framework, Components and Questions to Ask/Answer


Proposed Framework

19

Product Conception & Initiation

Feasibility & Initial Recommendation

Deep Dive – Detailed Design

Development, Testing, “Organizational

Readiness”

Pilot Pilot Evaluation

Full Launch

Post-Launch Evaluation

Ongoing Support & Management


What questions should be asked – items be

considered in each step of the framework to

ensure success?

Question 2

20

2.


Product Conception & Initiation

• What problem are we trying to solve? What are the

benefits to each participant of the value chain?

• Why is now the best time to solve the problem? Have

their been attempts to solve it in the past? If so, what

has changed?

• How do we envision the new product will work?

21

Conceptual Design – Business Standpoint (depicting the “what”, along with benefits to value chain constituents)


Feasibility & Initial Recommendation

• Who is the target market/segment? To whom would we be selling? How

would we sell it? Who is the actual end consumer?

• What is the market size for the opportunity? (Target market x percent likely

willing to buy)

• How will the product be priced? Which portion of the revenue (if not all) will

we receive? What are the high level associated costs?

• Are there competitors who already offer a similar product? Alternative

products?

• How will we get the product to market? How large is the development

effort? Are there vendors/3rd party providers who should be considered?

• What will our point of differentiation be? Why us?

• How will we measure our success and decide whether to proceed or not?

22

High Level Business Case


• How will the product actually work?

– Will the design meet the needs of the end consumer?

– Does the concept need to be further tested with the end

consumer once more is known about how it will actually work?

– Does a prototype or demo need to be built to show the

consumers? Perhaps using focus groups?

• Are there any legal considerations?

– Regulations which need to be considered and

built-in to the product design and/or product

economics?

– Are there existing patents similar to what is

being proposed? Opportunity to file new patents?

– Are there any unique disclosure requirements?

Deep Dive-Detailed Design


Deep Dive-Detailed Design (continued)

• Are there considerations beyond the development of

“how it works” which may also require development?

– How will consumers “get”/add the product feature?

• Sales Channels

• Sign-up processes

– How will service be provided to the customers?

– How will customers be billed?

• Should we buy it, build it or partner with someone?

• How will we promote and market it?


Detailed Business Case & Development Plan (More detailed/accurate benefits and costs)

We assume the company’s Software Development Life Cycle (SDLC) processes will handle the steps for the actual development and testing. However, there are many other things which need to be done in the same timeline to ensure “readiness” and increase the possibility of success.

Development, Testing & Overall Organizational “Readiness”

• Marketing and Customer Acquisition Plan

– Confirm target markets & how it will be marketed

– Develop marketing and collateral materials (including disclosures)

– Develop any necessary sales tools

– Define and develop advertising plans/acquisition campaigns

• Define distribution strategy – how it will be sold

– Sales and support channels

• Confirm pricing and estimated product profitability

• Establish any necessary customer care/servicing support or expand existing capabilities

• Develop and complete training

• Ensure reporting mechanisms are in place to monitor and report on sales progress – product success


Pilot

• Why do a pilot?

– Validate product is working as designed

– Validate consumer use and acceptance

– Validate operational and support procedures

• What activities need to be considered?

– Where to conduct the pilot

– Pilot participants

– Timing and length of the pilot

– Measures of success for the pilot – and how

they’ll be measured

– Development, distribution and execution of

pilot participant agreements (if needed)

26


Pilot Evaluation

Develop and distribute criteria to be used to evaluate the pilot:

• User experience

– Does the product meet the need? How satisfied are the consumers

with the product?

• System/technical

– Is the system working as designed?

– Is the system working at the capacity/throughput expected?

– Are there aspects to the product which are working differently than

what was desired? (They may be working as designed, but the

design needs to be changed before full roll-out.)

• Customer care/servicing

– Were the customer support groups able to successfully handle any

inquiries?

– Was the training sufficient? Any changes needed?


In addition to the system and technical considerations, what other items need to be considered for the full launch?

Full Launch

• Execute Marketing and Sales Plan:

– Press Releases

– Campaigns

– White Papers

– Webinars

– Participation/Announcements at Events

• Complete all training (formal and informal)

• Communicate to existing clients

• Ensure customer support and all back-office areas are

prepared to support the full launch


Post-Launch Evaluation

Did the product launch meet the defined objectives?

• Customer satisfaction

• Sales projections

• Revenue and cost projections

• System performance expected

• Industry perception


Ongoing Support and Management

The following select components are important to

consider and monitor on an ongoing basis:

• Product’s P&L

• Competitor offerings

• Changes in the industry

• Client satisfaction and ease of use

• System and operational performance

• Regulatory and compliance changes

• Technology changes


2012 Consumer Survey & Focus Groups: Any Questions You’d Like Us to Consider?


Thank You!


Sarah Hartman Senior Director, Payment Solutions

TSYS

706.649.4360

[email protected]

Shannon Gill Director, Global Product

TSYS

706.641.3817

[email protected]

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