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We have developed a system that lets small businesses issue membership cards to their clients which can then be used as payment cards. The clients either preload the card with money or link it with a credit card and then use the membership card as a payment card.

Our premise is that it's psychologically harder to take your credit card/cash out of your wallet than simply swipe your membership card, especially when you make small payments frequently. We basically believe it would improve the user experience and increase sales.

That being said, it would be much easier for our sales pitch if we had hard data to back our intuition.

Where is it possible to find such data without paying thousands of dollars for a market research report?

Is it ethical to make up a statement, say "Studies have shown sales increase by X% after implementing a payment card system"? Is there any way to make up a similar statement while remaining ethical?

If none of the above are possible, what would you do to sell a product whose main value is based on an intuition?

PS: We cannot use any current customer data as we don't have any yet.

Edit: Talking of ethics, I'd just like to point out I wrote this as the first person for the sake of clarity but I'm asking this to help out a friend.

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Look up statistics for other "E-wallet" services, from my memory this is what they used to be called. Use to be Gator.com was one of the big players in this arena. – Frank Nov 10 '10 at 4:12
The key is to make it EASY to get money INTO the system - like paypal or iTunes. Once it is in there it is like monopoly money. – TimJ♦ Nov 10 '10 at 20:09

2 Answers

up vote 2 down vote

Try to do a pilot program and measure what happens.

Not sure about the psychology of it doesn't feel like I'm spending money. There are already studies indicating increased spending with credit cards over cash. Not sure about pre-payment, you already paid for something you have not received, that can be painful unless it is a gift.

I would think a benefit over credit cards would be cost per transaction since merchants pay more in fees for 5 X 5$ charges than 1 X 25$ transaction. Cruise ships like these cards so you can use them multiple times, but they only have to do one credit card billing. It's like one big bar tab.

Not sure everyone claims the full amount on the prepaid cards.

Lying is rarely ethical. If someone calls your friend's bluff on the studies, they'll regret it.

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+1 for do a pilot program. Test & Measure. That's the only way you will get reliable stats about your startup. And they will be even more compelling because it is what you actually did! – Susan Jones Nov 10 '10 at 6:11
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I would recommend looking into user statistics regarding loyalty programs such as those run by supermarkets. For a large company like Best Buy you will run askew due to their size and the game-ability of their reward systems. Also, You will likely want to start from a small base with limited partnering so that you can branch gradually out.

Your case use may not justify the analogy, but for understanding segmentation and creating an additional item people need to carry and actually will it is a good reference point.

I found one Dartmouth Study (looks like an MBA paper) here And one from Marketing Trends Congress And here's one showing no increase in spending necessarily, but a rise in loyalty to and appreciation of the brand image

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