Western Union: Success after Finding a Profitable New Target Market

A business can re-energize itself by finding a new profitable target market and reinventing itself. Western Union is an example of a company that has successfully reinvented itself by going after a new market: the foreign born workers.

The company was at one time the monopoly national communications company, especially in the 19th century up until 1930s. During the heyday of telegrams, Western Union was the mammoth company of its times.

But as modernization ensued, the company struggled and even went into bankruptcy in the 1990s. By then, they have refocused their business to moving cash from one part of the country to the other, done through credit cards, ATMs and other forms of electronic payment. Alas, even this business failed to push Western Union back into black. The company sent its last telegram on January 2006.

Until Western Union decided to change its target market. Charles Fote of First Data Corp which acquired Western Union (then spun it off to shareholders in 2006) saw a great opportunity for Western Union: become the chief money-mover for foreign-born workers, one of the fastest growing segments of the country.

The number of immigrants in the US is rising dramatically, and while "cashless society" is the mantra of Americans used to carrying plastic all the time, cash still reigns supreme to many immigrants. And immigrants often send money back home (in cash) to their country to support the parents, families and children they've left behind. Thus, they need services that could facilitate this transfer of money.

The good news for Western Union is that this market has long been ignored by most banks and businesses. And the results showed that they were right. Way back in 2003, the company earned $3 billion in fees on cash transfers and the market continued to grow as the company posted transaction growth in the international business of about 23% in the Q4 of 2006. Western Union had became a trusted household name among foreigners.

So what lesson can this give us small businesses? If you want room to grow, look for a market or a niche that is largely untapped by the industry and your competitors. Western Union found that among the foreign born workers. It may be an offbeat market, or even an unglamorous market, but see its growth potential. If the market seems to be getting bigger and stronger, then capitalize on that market. Be different, and serve that market really well and your business can find its way on the road to success.

You can find the complete article on Western Union at Business 2.0 archives

Adding Alternative Payments to Your Online Store

Many online retailers are finding that adding alternative payment schemes to the traditional credit card payments is beneficial to their businesses. Hence, more etailers are using services such as Bill Me Later, eBillMe, Paypal, Google Checkout, PaidByCash, and others.

Customers are more likely to buy when offered various payment options. It's all about making the transaction easier and smoother for the potential buyer. Plus, many of these alternative payment options charge cheaper rates compared to credit card processing.

According to Internet Retailer magazine , here are the four common alternative online payments:

• billing services that e-mail an invoice following purchase and let shoppers pay through credit cards, direct account debits or mailed checks ;
• services that let consumers pay cash for a temporary debit card;
• mobile payments charged to credit cards or debited from bank accounts;
• mobile payments for digital content charged to telephone bills.

So what has been the impact of accepting alternative payments to online retailers?

• Footsmart.com, which now offers PayPal, Google Checkout and Bill Me Later, says that alternative payments comprise about 12% of all transactions. Adding alternative payment schemes, in addition to new features they've rolled out, has increased their web sales by 46% in the first quarter.
• Lingerie retailer Bare Necessities saw a 3% increase in average order value for orders placed through Bill Me Later
• LuggagePoint.com saw a sharp increase in the number of their customers with the $10 coupon for $50 purchase using Google Checkout

Learning from the Success of Toyota Prius

Toyota in the first quarter of 2008 has just overtaken General Motors as the #1 automaker in the world in terms of global sales. And part of that success comes from their hybrid car innovation, the Prius.

San Francisco Chronicle has a great article on how Prius came about in Toyota. Legend has it that Toyota executives believed that the ever-increasing pressures on oil and gas, as well as the pressure on oil and gas prices due to the emergence of China and India as industrial powers, would put significant pressure on the world's oil supply. As such, Toyota engineers proposed a small-fuel efficient car.

So what lessons can be gained from the success of Toyota Prius? Robert Herbold in his book "Seduced by Success" discusses the lessons we can learn from Toyota:

• Toyota anticipated a key inflection point --rising gasoline prices -- and assigned top talent to investigate its impact
• Do a thorough job of reading the marketplace.
• Study and reapply what works. Honda was the first in the market with electric cars, but failed. Toyota took full advantage of the learning and came up with a creative solution to the problem

Here are some other articles on the success of Toyota Prius:

• New York Times Say ‘Hybrid’ and Many People Will Hear ‘Prius’
• NPR Toyota's Car of the Future Had Distinctive Beginning
• Fortune Magazine The Birth of the Prius

Kashi: Building Impressive Customer Relationship

Kashi is a company that produces high quality healthy natural foods, from cereals to waffles to frozen foods to snacks and bars.

But their website is more than a store to sell their products. The company, whose goal it is to encourage an overall healthy lifestyle, is using the Web to reach their extremely loyal customer base and create a place that touts the benefits of their products to the uninitiated. As such, Kashi actively markets the healthy lifestyle by building a community of health-conscious online fans.

Kashi is a perfect example of how businesses can demonstrate their commitment to developing strong relationships with customers and target audiences. If you are looking to build a strong brand with loyal fiercely loyal customers, study how Kashi presents itself on the Web.

Through the company's focus on wellness goals, Kashi exemplifies how to build a personal brand that puts human relationship with their customers up front and center. They've built an active community that discusses recipes that can be done from their products, daily challenges of keeping a healthy lifestyle, even the benefits of turning off TV. The site also contains testimonials, success stories, recipes and weekly diet planners. The most loyal users sign up to become a Kashi "Fan Addict" giving them added benefits such as coupons, weekly newsletters and access to special promotions.

Kashi has also done an excellent job of "humanizing" their business by identifying a few of their employees, and giving these employees a platform to discuss their own wellness goals, barriers and motivations.

How Adjusting the Search Box Can Improve Conversion

When trying to convert visitors into buyers, the search box is a critical element, and its size and location can have a huge impact on sales.

InternetRetailer.com reports that home furnishings retailer Black Forest Décor saw a 34% increase in their conversion rate by making the search box easier to find and use. They moved the search box from the upper right corner to the center of the page just under the top navigation bar as well as increased its size by 72%.

In addition, Black Forest Décor changed the Go button next to the search box with a Find button. The retailer also made some color changes, using a lighter shade for the search box and putting it against a dark background color to make the box pop visually.

Aside from the conversion rate increase, the percentage of web site revenue from customers who used site search after the redesign was 42%, up from 35% previously.