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Thought Leaders in Financial Technology: SurgePays CEO Brian Cox (Part 2)

Posted on Wednesday, Sep 14th 2022

Sramana Mitra: Let me probe something very specific. When you made the switch by digitizing that whole process of scratchable prepaid cards but were still catering to this low-end consumer base, what was the go-to-market strategy? How do these consumers reach you and find you?

Brian Cox: That’s a great question. I failed every which way possible in trying to go direct to the consumer. The only way to truly reach the consumer from my perspective was to go into the neighborhoods they live in. There is a false sense to this influencer thing. Our market is not enamored by Silicon Valley influencers, if you will.

The influencer for our market is the guy sitting behind the counter at the corner store that these customers visit five to six times a week. Everybody knows him. Nine times out of ten, they know what you’re going to buy when you walk in. They see you every other day. My go-to-market strategy was that guy needs to be compensated for helping me. If I’m able to give him a product that he can sell, it increases his foot traffic, he likes us, and he asks us for more products. We’ve kind of created a B2B to reach the ultimate consumer.

Sramana Mitra: How did you reach these neighborhood stores?

Brian Cox: We’re in over 8,000 stores. That’s the hard part. You have to go and pull the door. You have to build a relationship with them. It’s very difficult to do. As we build and add stores, it’s not just a customer-client. Each one of these stores is a point of distribution and launch pad for future sales.

To steal some of the cliches, how do you build a moat around your business model? My moat has always been relationships. It doesn’t matter what technology changes. Whether it’s long-distance cards, home telephone service, prepaid wireless, now mobile broadband, it still has to be sold. Those relationships is what solidified us.

Sramana Mitra: To get to these 8,000 stores, you have feet on the ground salesforce that goes and checks those and explains those products.

Brian Cox: I was feet-on-the-street number one. If there are people who hear this and think that you’ve got to go out there and raise a hundred million dollars to start a company, you don’t. I didn’t. I started with a credit card, a mattress on the floor, and a dorm fridge. I had nothing. I had ideas, willpower, and a lot of coffee. I spent years on the road. At night, we were scouting out areas. It was just relentless work and putting in the hours.

That was my tradeoff for not raising capital. This was 20 years ago. I’m talking about prepaid and underbanked. By definition, anybody that I would talk to about money, they don’t know about the underbanked because they’re bankers. This is not even a realm that they exist in. They can’t even see that paradigm. It’s obviously a different world now. Nowadays, we have feet on the street that make a commission-based living by signing on locations. They service a territory.

Sramana Mitra: How many of these commission-based reps do you need to service an 8,000 store population?

Brian Cox: That’s one we’re evaluating right now. Traditionally, our market has grown similar to the credit card companies that use independent sales organizations. If you set up a company to do merchant processing or accept credit cards, you set up and you go. We’ve seen that transition in our market. The territory where you had a more hands-on rep or an in-house sales rep always performs better. Just this year, we’ve started hiring in-house people. We’re testing different strategies for the best way to hire the best person. Then the best way to compensate them. We are seeing a lot better sales. It also cuts down on calls to our operations center.

This segment is part 2 in the series : Thought Leaders in Financial Technology: SurgePays CEO Brian Cox
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