1. Fiserv Case
Marketing stretegy MBA
2012-2013
- Valentino De Girolamo
- Eleonora Stentella
- Matteo Turchetti
- Vincenzo Di Lecce
- Filippo Antonio Pisano

2. Introduction
Goals to reach
• Make a good market segmentation to define how to
invest and to which customers
• Understand consumers perceptions and modify their
approach to e-billing
• Implement an effective communication strategy without
increasing the budget and maximizing the results.
Customers definition
• Direct customers : billers and banks
• Undirect customers: end users

3. Market potential and prevision
We estimate that the realistic market Growth scenario: comparison between
available, in USA 2009, could be electronic payment systems and e-billing
7.224.000.000 $ based on the fact that penetration. Trends assumptions
there is a direct relatinship between according to first possible scenario after
electronic payment systeme penetration the new customization strategy.
and e-billing development.
• the population is 86M (“onliners”)
• € 60.200.000,00 (70% of “online
consumers”) use electronic bill
payment
• less then 20% use e-billing to watch
bills (€ 17.200.000,00)
• frequency (recive bill): 10 times a
month
MARKET POTENTIAL
è OUR FUTURE GOAL:
10.320.000.000 $

4. Identification of clusters
real customers needs and main informations

5. Managerial evaluation of clusters
range 1-5
E-Savvy Maximisers Self Convenience Desperates Paranoids
Improvers Seekers
Attitudes 5/5 3/5 4/5 2/5 1/5 1/5
Behaviors 5/5 5/5 4/5 2/5 1/5 1/5
Demographics 4/5 5/5 4/5 4/5 4/5 4/5
Size 4/5 5/5 2/5 3/5 3/5 1/5
Score 18/20 18/20 14/20 11/20 9/20 8/20

6. Targeting the clusters
• E-Savvy • We identify 3 effective segments of market for
( 19,7% market share of bank transactions ) our business: E-Savvy Planners,
- Identified as possibile early adopters and Maximizers, Self Improvers.
pioneers
- Already users of financial software Percentage of clusters over
- Seek fast and efficient ways to manage bills total onliners population
- Main Implication: less costs in switching from Paranoids Desperates
paper billing to e-billing, high growth
Convenience Seekers Self Improvers
opportunities
Maximisers ESavvy
• Maximisers
( 27,1% market share of bank transactions )
- Comfortable with new technology 8,90%
- Highest percentage of Market Share 12,30%
- Main implications: highest growth opportunities, 16,90%
identified as possible market influencers.
13,70%
• Self-Improvers
( 13,3% of bank transactions ) 27,10%
- Do not believe they have a good system for bill 20,60%
management

7. Communication problems to be solved
according to focus group results
QUESTIONS SOLUTIONS
• “Who sends the e-bill? The bank • All the campaign will be driven by
or the company I have to pay?” banks and billers using e-mail or
outbound marketing trougth call
• “Can I sign up for e-billing through
centers.
my bank or do I have to ask alla
the individual companies?” • Customers could subscribe the
service by just signing an e-mail
contract with the bank.
• Show the economic benefit of e-
• “What exactly is the benefit of e- billing increasing also the price
billing?” of paper bill in order to increase
the spread between the two.
• Create a specific price for mix
end-users (change the markup) to
reduce time of conversion.

8. COST ANALYSIS: all paper end users
• Total onliner population: 89M
• E-billing mix users (20% of tot. Onliners): 17,8M
• Paper bill cost each bill 1,25 $
Assumption:
We consider just the variable cost according to the Case.
We estimate the markup must be at least 15%, the minimum value at which we could cover the risk
and parts of the adverstising cost (not yet defined in the case but important for future evaluation).
• Bank/billers tot unit cost per end-users a month: 12,5 $
• Minimum monthly price for end-users with markup 15%: 14,375 $
• Annual end-users subscription: 172,5 $
BANK/BILLERS CONVERTION COST
• Average cost to convert all paper billing consumers in exclusive e-billing consumers 4,50$ per
consumer
• Average cost to convert all paper billing consumers in e-billing consumers $2,00/customer

9. COST ANALYSIS: e-billing mix end users
• Tot. Onliner population: 89M
• E-billing mix users (20% of tot. Onliners): 17,8M
• Paper bill cost each bill 1,25 $
Assumption:
Mix end-users receive, on average, 10 bills/month: 5 electronic ( 1 electonic è 1 view ) and 5 paper*
• E-billing service: monthly cost/customer: 0,125 $
• Paper bill monthly cost/customer: 6,25 $
• Bank/billers tot unit cost per end-users a month: 6,375 $
• Minimum monthly price for end-users with markup 15%: 7,33125 $
• Annual end-users subscription: 87,975 $
BANK/BILLERS COST SAVING
General saving for consumers who no longer recived the paper bill: 45% = 2,86875 $ each
consumer + call center cost saving 2-4$ (median 3$) = 0,506225** $ cost/end-user
Average cost to convert both paper and e-billing consumers to turn off the paper $1,50/customer
• For customers that recive both electronic and paper bill.
• ** Compare to next slide

10. COST ANALYSIS: e-billing only end users
• Tot. Onliner population: 89M
• E-billing mix users (20% of tot. Onliners): 17,8M
• E-billing cost for consumers which turn-off the paper: 0,40 $/month
Assumption:
End-users receive, on average, 10 bills/month.
• E-billing service: monthly cost/customer: 0,40 $
• Bank/billers tot unit cost per end-users a month: 0,40 $
• Minimum monthly price for end-users with markup 15%: 0,46 $
• Annual end-users subscription: 5,52 $
Conclusion:
• The cost analysis show that turn-off the paper is convenient both for banks/billers (which can create
different subscriptions according to different markup ) and end-users. The strategy should be
creating according to the elasticity of the market to the prices as reported into the Case.
“By 2009 electronic bill payment was gaining wider acceptations, with penetration given by
convenience over traditional payment methods, saving on postage and improved perseptions
of payment secutiry”

11. STRATEGY
Meet an important “SET OF NEEDS FOR AN IMPORTANT SET OF CUSTOMER”.
Short term Long term
1. CUSTOMER VALUE MANAGEMENT 4. Operation : “REMIND ME”
from customers satisfaction to It’s a long term phase; we think the
customer loalty Direct targeting of customization of our clients is not only
customer which are already using regarding the short term.
elettronics and paper bill service (mix). We suggest to invest in a new type of
The conversion cost is estimated at 1,5$/ integrated service which could include:
customer, less then other convertion. Payment transactions; e-billing and a
2. ACQUISITION: finding new clients memorandum. The service could be built
Send e-mails to internet profiled users using a simple platform for modular
presenting the “Become e-billing end- innovation and promoting using e-mail and
users” campaign with specific benefits. outbound marketing (call center).
3. Present OUR offer to OUR target
Specific advertising campaign : links, web
site, brochure, social network, call center.

12. Fiserv Case
APPENDIX

13. APPENDIX
Answers to the professor questions
QUESTION N.1
• Positive and negative issue judgment about segmentation
We believe that the segmentation shown in the Case did not present some important
points related to the market. The first is the one directly connected to the price elasticity
of the market. In the case is written that the positive result obtained by Fiserv’s online
payment system was due to the direct saving for customers. In this segmentation there
are no informations related to this point so that we cannot understand also which type of
economic risk customers will perceive when we will present the opportunity to shift from
the bill paper to e-billing.
We cannot understand also what is the final goal that people want to rich using internet
devices to make payments and do transactions (terminal value).

14. APPENDIX
QUESTION N.2
• What your choice of targeting?
As already shown in the cost analysis slides we decide to consider not just one segment
but 3 of them. The reason is very simple to understand. The new product (e-billing) is
answering to the real needs of just two simple of cluster (E-Savvy and Self improvers),
which are looking for “better system” to cut time and better organize the bill, but just
the first cluster doesn't have a high risk perception due to the internet security
problem. There is also another problem related to this case. The bad results shown in the
past make us thinking that is not correct to invest only in a specific target because we
still don't know if the perceived benefits of the product are enough strong to
generate a profitable buzz (world of mouth). For the new strategy it will be better to
have one cluster of early adopter, one cluster as followers searching for both
convenience and better bill management system and one cluster that, even if doesn't
need the new system, could be involved to generate profit in the medium run.
We will use the early adopter (E-Savvy) to cover the initial advertisting costs and we will
use the positioning to the Maximizers (III group) to increase the buzz when the product
will be ready to answer both explicit and implicit needs that are still on stage (in the
text it is clear that customers are looking for mainly a reminder system bill )

15. APPENDIX
QUESTION N.3
• How do you think is better to convert the target?
According to the informations written to the Case, we already know that the target
market as high price elasticity. We decide to convert the target using different type of
approaches. For customers that already use e-billing (mix customers) we will just present
our best price offer using the range of possibility shown by the markup valuation (e-billing
will be always more convenient even if we increase the markup). For mix users we will
just use the outbound marketing and e-mail marketing. Same marketing strategy,
related to price, we will do to convince the 2 targets of E-Savvy and Self Improvers.
For the Maximizers we will use another approach. People inside this cluster believe that
already have a good bill management system so we will have less possibility to get their
attention using just the price formula. For them we will use another type of marketing
strategy. Because they are financial "influencers" into the market we will crate a specific
campaign to test the product and gain money to write technical and behavioral
review about the product itself. To introduce the campain we will use link-building
strategy and social media marketing; banners and specific landing page connected to the
bank's or billers' website

16. APPENDIX
QUESTION N.4
• Which is the role and involvement of the merchant in a BtC through B
approach?
It is a strategic rule because it base to create a sort of bridge between to difference
needs. In this case Fiserv is playing the master rule because through the final customers
(end-users) it could increase the banks/billers benefits and also its own revenues. We
believe that in this specific Case the most important issue to take into account is the
price setting. Making the right price for the service to the bank will help to find the better
strategy for the end-users. If the banks or the billers could have more flexibility in
changing from one markup to another (bacause they still have margin due to a
competitive service price setting by Fiserv) they could create more subscriptions’
promotion strategy according to the demand elasticity.