With all the talk about 5G networks and IoT devices with embedded SIMs, it’s easy to forget that prepaid subscribers still account for 71 percent of global mobile connections, according to data published by Strategy Analytics and Juvo.

Prepaid subscribers typically use scratch cards, also known as prepaid phone cards, as a convenient method of purchasing more airtime, which creates important opportunities and challenges for mobile network operators (MNOs), who must constantly deliver value to boost revenue and reduce churn.

The Good, Bad, and Ugly of Scratch Cards

In this digital era, using physical scratch cards to sell airtime may seem archaic, especially in developed markets with strong banking infrastructure, but First Data research shows that customers enjoy their touch-and-feel nature.

“This research challenges the preconception that prepaid cards are primarily attractive to the sub-prime or unbaked population,” states First Data in its research summary. “More than half of consumers who were likely to purchase prepaid cards in these markets have higher incomes (exceeding £40,000/€40,000 annually) and consider themselves to be financially savvy.”

Scratch cards play an especially important role in developing countries and regions, such as South Africa, Malaysia, or the Philippines, where they account for 82 percent of connections and 50 percent of revenue, state Strategy Analytics and Juvo.

Despite their popularity among customers in developed countries and their vital importance in developing regions, scratch cards have one crucial issue that plagues all MNOs who sell them: high churn rate.

In the eight markets studied by Strategy Analytics and Juvo, churn ranged from 3.1–6.5 percent per month (37–80 percent per year, compared to 16 percent per year for postpaid), which means that MNOs have to replace all of their prepaid subscribers every two years.

Using Scratch and Win Games to Create a New Prepaid Value Proposition

To reduce customer churn and increase revenue, mobile network operators must create a new prepaid value proposition, and scratch and win games allow them to do just that with very little investment and minimal administrative costs.

In practice, using scratch and win games to enrich the user experience and add a greater level of brand engagement is as simple as adding another scratch panel to prepaid phone cards. Airtime and data top-ups are the most suitable prizes because they create minimal prize administration costs for the operator.

Prizes should be distributed in sufficient quantity so that every prepaid subscriber can experience the thrill of winning sooner rather than later. However, it’s also a good idea to include a small number of grand prizes to increase the stakes, such as smartphones and other physical rewards redeemable at the operator’s stores.

That’s exactly what Vodafone Qatar, in partnership with recharge card manufacturer Workz Group, did when the operator launched its “Happy Recharge” promotion, offering prepaid customers the chance to win credit and cash prizes up to QR25,000 (around £5,500/€6,000).

The promotion, which was supposed to run for just two months, turned out to be such a roaring success that Vodafone Qatar decided to adopt scratch and win games as a permanent feature on its recharge cards, reporting a significant increase in scratch card sales.

“Working closely with Vodafone Qatar, we’ve been able to revitalize recharge sales through the introduction of the scratch and win feature,” said Robert Varty, head of sales at Workz Group. “The campaign brought to life a product that highly engaged with its subscribers and boosted the brand and revenue.”

Since then, Workz Group has helped a number of network operators within the MENA region implement similar scratch and win experiences, always with the same success. MNOs that still rely only on traditional scratch cards should strongly consider doing the same to sell more airtime with minimal investment.

Conclusion

Mobile network operators can easily sell more airtime by enhancing the user experience of their recharge cards with scratch and win games. Such games add another dimension to the familiar method of purchasing more airtime, giving customers the opportunity to walk away with great prizes.

The positive experience associated with winning a prize of any value can very effectively help reduce subscriber churn and thus positively impact operator bottom lines. The cost of implementing and administering scratch and win games is negligible in comparison with the potential to greatly increase prepaid revenue thanks to existing solutions from leading scratch card manufacturing companies.