Can card-linked offers co-exist with daily deals?

It doesn’t seem like too long ago when the Daily Deals typhoon, led by the meteoric rise of Groupon, was sweeping the nation. Google offered ownership of $6 billion, but Mason and the other investors turned that down. On November 5, 2011, Groupon went public, with a market cap around $6 billion. Groupon’s market cap today is still around $6 billion. Not bad. But it sure has not taken off. Why not?

Groupon had no real business model. The problem with Groupon is that it is a one time deal, and is done. Groupon will deliver Groupon customers to a merchant, but not the customer’s email address.

After redeeming the Groupon, the Groupon customer is on to the next Groupon. No customer has been acquired. No customer loyalty has been created.

Daily deals in many cases are not good for merchants, with one caveat. If a daily deal actually enrolls a customer into that merchant’s loyalty program, then it is a good deal for the merchant. But with paper Groupon certificates, that never happened.

First, A Card-Linked Program

Card-Linked Offers can augment a card-linked loyalty program and actually enroll a customer into a card-linked loyalty program. But before this can happen, the merchant first needs a card-linked loyalty program.

A merchant who wants to start a loyalty program must appreciate the Pareto rule, the 80/20 rule. Eighty percent of the merchant’s business comes from existing customers. Therefore a merchant first needs to enroll its own customers. The best way to do that is at the point of sale. At vPromos we are seeing great success with loyalty enrollment of the customer’s credit card at the POS. It is easy.

Augmenting Enrollment with Card-Linked Offers

Once the merchant has a card-linked loyalty program up and running, having enrolled its own customers, augmenting enrollment with card-linked offers makes perfect sense.

Here is how it would work. When a consumer goes online to buy a special offer at Groupon for example, that customer’s ID, email, and credit card number token will be shared with the loyalty company for that merchant. When the consumer is ready to redeem the card-linked offer at that merchant, he simply pays the way he normally does, with the same credit card used to purchase the special offer. The POS prints out the special offer discount right at the POS, followed by an instant email thanking the consumer for redeeming the offer, and, most importantly, welcoming the consumer to the merchant’s loyalty program. Now, every time that customer pays with that credit card, he earns points or punches towards that merchant’s reward program.

Loyalty Program and Ongoing Engagement Will Do The Rest

This is huge for merchants. This means marketing dollars invested online can be used to not only get a customer in the door, but potentially acquire that customer for life. Once the merchant has the email address, it can engage the customer and get him back to the store. The loyalty program and ongoing engagement will do the rest.

But what will the Groupons of the world think of this model? The reason they don’t share the email today is that the merchant has to come back for more. If the customer is acquired by the merchant, the media company, Groupon in this case, may run out of customers to deliver the merchant.

The Future is Happening Now

The offers space is evolving, and it appears that card-linked offers are the way of the future. Except that the future is happening now.

My next blog will talk about Real time card-linked offers vs. Not real time. The difference is huge.

For businesses looking for a way to implement real-time offers to their best customers vPromos can help.