| Lancet recognized for "Best Practices in Communications and Marketing" by Upsize Minnesota.
Lancet Software tries pre-paid card to reduce selling costs.
You can load up a plastic card to pre-pay for coffee, so why not for Web development services? That’s what Tom Niccum, president of Lancet Software in Burnsville, and his team figured when they launched their pre-paid consulting card, called the LancetCard.
“We recognized there’s a lot of small businesses out there that don’t have huge work. They need bite-sized projects,” Niccum says. His firm has many large clients, such as Best Buy, and then many small ones. However, bidding for small projects takes just as much effort as bidding for big ones.
“How can we remove some of the friction from that, where we do all this paperwork for a couple of hours of work?” Niccum says. “The notion of a pre-paid card is everywhere, but we haven’t seen the same thing” for IT services.
Five hours is the minimum to put on the card, at $80 an hour. The rate drops to $75 an hour for 10 hours, and $70 an hour for 20 hours. “We’ve had people buy as many as 40 hours; after that it might be a project, and then we do specifications,” Niccum says.
Lancet did beta-testing of the idea this summer, after conducting informal focus groups. By late 2004 they had sold about 50 cards, and in one week a salesperson sold about $10,000 worth of pre-paid services. “I think it’s going to add half a million in revenue next year,” Niccum says. “We’re going after a market that’s untapped.”
Lancet posted about $3 million in revenue in 2004. “It would be a nice growth rate,” he says, if the card meets expectations.
“In exchange for paying money upfront, they get discounts on the rate and total transparency, instantaneously, on the bill,” Niccum says about customers who use the cards. (Users access a Web site to check their balance.) He says the arrangement helps cash flow but especially predictability, which in turn helps him schedule his consultants’ time.
Lancet rolled out the cards attached to a refillable candy container, making for a cute hook: When the candy jar’s empty, customers will remember to call Lancet to refill it, and the card too. Spangler Design Team in Hopkins created the marketing concept. “It’s way too creative for IT,” Lancet jokes.
Tom Niccum, Lancet Software: 952.230.7360;
 ; www.lancet-software.com |