The Prepaid Press - September 15, 2008 - (Page 7)

PREPAID BUSINESS September 15 · 2008 - 7 Brian Rudolph, Co-owner, Krush Communications Interviewed by Ingrid Ricks With a shrinking marketplace and increased regulation and enforcement, unique branding is emerging as a key differentiator and factor for success in the phone card industry. As the exclusive provider of the wildly popular Homies Phone Cards, Krush Communications has discovered that merging entertainment with phone time is the secret to successfully tapping into the Hispanic/Latin marketplace. Co-owner Brian Rudolph, who has been in the prepaid phone card business since 1996, recently shared his thoughts about Homies Phone Cards and the overall state of the industry. as a character. That put us in touch with David Gonzales and we signed an exclusive licensing agreement with him to make Homies phone cards, which we have been distributing for two years. IR: How have they gone over in the marketplace? BR: The Homies cards are by far the best thing we have ever had. They are so unique, and there are so many different things we can do. People collect these phone cards – these Homies cards represent their family and themselves, and we come out with new cards every three months to keep them fresh. To give you a sense for how popular they are – we have come out with Coroplast signs featuring the Homies brand and have gone back to the store a week later to find out that people have ripped off the signs to put them in their houses. you know you’ve got something good when people are sticking your signs up on their walls as decorations. IR: Is the Latin market your primary target? BR: Ninety percent of our termination is in Mexico, Guatemala, El Salvador and Honduras. Currently, we only distribute the Homies cards in the U.S., but we are talking with a company that wants to start selling the Homies cards in Mexico. 5 MINUTES WITH IR: What are Homies? BR: Homies are the little figurines that artist David Gonzales came up with in the late 90s. He began selling them in gumball vending machines in Hispanic restaurants and supermarkets everywhere. Gonzales has sold something like 500 million figurines. They are appealing and unique to the Hispanic community. Now other products are branching off — like Homies folders, posters, and calendars that are sold in big stores like Wal-Mart and Walgreens. IR: How did you come up with the idea for Homies phone cards? BR: We noticed that cards that sell are comedic – there’s a card with a rooster that crows. So we were looking for a comedic card and someone said Sancho. That’s what people call the boyfriend of married women in Mexico. When guys come up from Mexico to work, they are alaround the country and they took off. There ways worried about Sancho. So we were looking are a lot of people who collect Homies. Even at at making a Sancho card and when we did an the show, QuarterPageAdd_Quatro08.ai booth and 4:41:53 PM search on the name, we landed on the I had people come by our 4/29/08 Internet tell me they have a hundred of them. They are Homies-Shop web site, which features Sancho “For so long people have been putting out unrealistic minutes and then slashing the minutes, and that has caused a lot of problems.” IR: How do you reach your markets? Do you service accounts directly or depend on independent distributors? BR: In Florida, we have our own direct- tostore retail distribution, with our own drivers that service the stores directly. In other states, we have long-time distributors who sell the cards. We have some exclusive areas, but a lot of areas are open to other distributors. IR: What other products does Krush market or plan to market? BR: The Homies cards are all we concentrate on right now. We are talking to a wireless MVNO about producing a Homies cellular card product line. IR: How important is branding? BR: I think branding is extremely important. It’s key to getting loyal customers so they are not switching from one card to the next to the next. With the Homies cards, we are definitely bringing an entertainment factor. And these images represent real life situations and characters that people can relate to. IR: I know you have been in the prepaid industry for a long time and have seen a lot of changes. What are your views on the state of the industry today? BR: The industry has definitely been shrinking – but it is also cleaning up finally, which is so good. Everyone is getting to be on a level playing field. For so long people have been putting BR: I definitely believe that there will always be a need for phone cards. It’s true that the domestic market has taken a big hit because of cell phones. But even with a shrinking domes- “I think branding is extremely important. It’s key to getting loyal customers so they are not switching from one card to the next to the next.” tic market, we will always have Hispanics and immigrants coming over here, so I think those markets will remain viable for a long time. IR: What advice do you have for distributors in the industry? BR: Push a product that you believe in and is something that you can make long term. Getting a card, slashing minutes, and then six weeks later having to take it out of the store will burn out anyone. IR: What advice do you have for retailers? BR: My advice to retailers is to accept the cleaner, lower discount cards that we distributors are attempting to put out in the marketplace. Most retailers do not know this, but they currently make about 80% or more of the total profit of a phone card. They need to accept less – like they do on most other products – in order to get cleaner, better cards into the hands of the consumer. Nowadays, there just isn’t 35% or more profit margins in a competitive phone card. IR: I heard that Krush won an award from Convenience Store News. Tell me about that. BR: Last year, we won the Convenience Store News award for best new product. Winners in other categories included Hershey’s and Monsters Energy Drink so it was a really big deal for us. That is what is exciting about this product. People are really rallying around it because they see it as a way to tap into the Latin and Hispanic markets. In the coming months, consumers and distributors will start seeing Homies phone cards in many of the big time, national accounts. Brian Rudolph is Co-owner of Krush Communications. For more information on Homies Phone Cards, visit www.homiesphonecards.com. “But even with a shrinking domestic market, we will always have Hispanics and immigrants coming over here, so I think those markets will remain viable [for phone cards] for a long time.” out unrealistic minutes and then slashing the minutes, and that has caused a lot of problems. Krush Communications very much welcomes the new strict regulations and their enforcement. This levels the playing field and makes a brand like Homies much more important and valuable. IR: Do you think that phone cards will remain a viable product? http://www.quatrocanada.com http://www.homiesphonecards.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - September 15, 2008

The Prepaid Press - September 15, 2008 ISOs Hold Key to Growth in Prepaid Industry Contents From the Publisher: The Show Goes On Regulatory Rundown: Early Fall Regulatory Beat 5 Minutes With Brian Rudolph, Co-owner, Krush Communications TPPEXPO’08 Spotlight Dateline Expo: Prepaid Wireless Update 2008 Wireless in Brief MetroPCS Available at Best Buy Western Capital Resources Inc. to Acquire PQH, Inc. TracFone Launches SafeLink Wireless Prepaid Wireless Roundup CIT Secures Financing for Prepaid Wireless Company MetroPCS Premiers Loopt Social-Mapping Services Virgin Mobile USA Reports Financial Results Dateline Expo: Prepaid Calling Card Update 2008 Inc. 5000 Recognizes Viscom International USAC’s “Carrier’s Carrier” Rule Comes Under Attack NetIQ Extends VoIP Management to Microsoft Office Transverse Launches OSS/BSS Open Source Platform Calling Cards in Brief Dateline Expo: Prepaid and Alternative Payments Update 2008 NETELLER and TransSend to Offer Cards Payments in Brief U.S. Treasury Introducing Direct Express Debit Card Visa Launches New Mobile Payment Services SCX Global Acquired by Rev Worldwide Metavante Selected by Corporate Network eCom ACE and NetSpend Launch March of Dimes Card AccuPOS Announces AccuCount Software Springbok Offers Private Label Prepaid Cards Prepaid 101: ATMs and Prepaid NACS Releases State of the Industry Report PaySpot to Distribute Futura Cards Hypercom Lands Element Payment Services Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - September 15, 2008

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