The Power of Card-Linked Offers

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.

Card-Linked Offers: The Future of Deals

How Facebook, Microsoft, Bank of America, Discover, Mastercard, and other banking and technology heavyweights are getting together to change the way we do discounts.

On October 7th the scions of Silicon Valley and the big bulls on Wall Street got together at this year’s Money2020 Expo to announce The CardLinx Association, a new, cross-industry group aimed at promoting card-linked offers. What’s particularly interesting is the seemingly diverse litany of brand name companies involved in the venture – Facebook, Microsoft, Bank of America, and MasterCard just to name a few – and the coherence of their concerted effort to push what could, quite possibly, do away with coupon clippings and punch cards for good.

Good For Consumers, Great For Businesses

The way we do business is changing. The emergence of online promotions in particular, along with the rise of mobile computing and the proliferation of smartphones, have fundamentally shifted the way consumers interact with, engage with, and make purchases from most vendors. At the same time, traditional means of promoting business are failing.

The ocean of conventional promotional materials (i.e. paper coupons, mail-in rebates, etc.), most of which are tossed in the trash, have become an enormous burden on time-pressed consumers. In other words, the archaic nature of many “offers” programs is physically limiting growth in a rapidly digitizing society. CardLinx referred to these limiting factors as a form of “friction” preventing the easy acquisition and redemption of relevant offers. For the average consumer, time and convenience is the new currency.

Traditionally, the act of driving consumer action, promoting customer loyalty, and collecting personal information for behavioral clues are handled as three separate processes. From a business’s perspective, this often means that the establishment in question would have to implement independent advertising campaigns, loyalty programs, and data farming apparatuses – all expensive, all with their own support requirements, and all completely disconnected from one another.

Card-linked offers promise to do all three with a single simple, integrated system.

Users simply sign up, purchase a digital coupon, which is then linked directly to their debit or credit card, and make a qualified purchase at a participating business. The discount is directly applied to their statement in real-time at the point of sale. No printing coupons. No swiping loyalty credentials. No waiting for the rebate to take effect. No hassles for both sides. Better yet, by parsing personal purchase history, vendors can craft deals relevant to each individual and deliver them directly.

Consumers get the exact deals they want, when they want them. Businesses get a unified architecture for promoting customer loyalty and delivering promotions. That’s a win-win.

Best Next Thing

Location-based, real-time offers were not a part of the retail experience just a few years ago. Yet, as consumers continue to demand, and ultimately acquire, more and more flexibility and agency in the way they approach the buying process, the drive towards this type of marketing innovation will only continue. The truth is, card-linked offers could be the best next disruptive technology to fundamentally change the way we buy and sell.

Businesses with the ability to adapt these market-shaping technologies stand a very good chance of better serving their customers, differentiating themselves from the competition, and gaining a critical key market advantage. LivingSocial certainly seems to think so. The much lauded online purveyor of daily deals, which has taken a beating in recent times, is a key CardLinx founding member and is betting that card-linked offers are indeed the way of the future.

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

When Building a Loyalty Program: Time is of the Essence

Sometimes it seems as if life just keeps on getting faster. And faster. And faster. In fact, where time was once measured in years, months, and days, today time is now measured in minutes, seconds, and even milliseconds.

To us, what happens between the confines of a measurable second is more or less instantaneous. Whether it be a simple Google search or service in a restaurant, we have come to expect instantaneous, or at least very, very fast results.

It is, after all, against this backdrop of the instantaneous that our expectations are informed. Our expectation of loyalty programs is no different.

Now or Never

If there’s one thing consumers hate more than anything, it’s having to wait. 50 percent of mobile users will abandon an ecommerce site that takes more than 3 seconds to load. 3 in 5 won’t return to it.

In the brick and mortar world, half of all consumers would not return to an establishment that kept them waiting. Amazon could purportedly lose as much as 1.6 billion dollars in a year if its webpages were delayed a second.

Yet for some reason, the vast majority of loyalty programs out there continue to insist that consumers carry around a keyfob, wallet-busting loyalty cards, or other unwanted loyalty paraphernalia. If the difference of a single second can make or break purchases online, chances are the inconvenience of having to lug around a whole host of loyalty accessories will render the offending reward programs mostly ineffectual.

What is the main issue with these conventional schemes? They inconvenience consumers and needlessly waste their time. Want to get a free sandwich? You’re going to have to dig through your wallet or purse for the punchcard. Want to get members-only pricing on select products? You’re going to have to fill out this long and tedious application form.

Cut. To. The. Chase.

When it comes down to it, if a consumer can’t have what they want when they want, most consumers would rather just not have it. Implementing an instantaneous, seamless rewards system is a critical first step towards cultivating long-term buyers in an era of short-term consumer allegiances.

I’d love for you to leave a comment below.

Loyalty Programs Should be Seamless

Many of us use our spare time to surf the web, as opposed to virtually any other human activity because: A.) We can. And B.) It’s literally one click away.

Good loyalty rewards programs should feel and act the same way.

Smooth Out the Seams

For all intents and purposes, the threads that bind us to the brands that have traditionally dominated the marketplace have come undone. Old school brand loyalty is dead, or so they say. But loyalty itself isn’t. After all, internet companies like Google and Amazon enjoy nearly unchallenged market domination in their respective fields – information search, and online shopping.

Why? Because the services they offer are so incredibly easy, so straightforward, and for time-pressed consumers, so much more preferable than making the effort to patronize a brick-and-mortar establishment. The logic of the internet lends itself to creating a seamless experience devoid of any and all barriers between a consumer and their point of destination (or purchase).

Today, transactions work at the speed of light. Your rewards system should too.

Unfortunately the logic most businesses seem to pursue, when it comes to implementing a loyalty program, is the exact opposite. Keychains, cards, and other forms of wallet filler are a physical burden foisted on most consumers without their permission. Small wonder why both parties hate them. They have become, in effect, barriers.

At some point, most consumers will weigh the effort required to obtain a freebie, and the value of the freebie itself, and probably conclude that you don’t really want to reward them in the first place. At that point, a poorly conceived and implemented loyalty program is likely doing more harm than good, and should be discontinued altogether.

Consumers want ease, not more barriers to hurdle. As it turns out, the best rewards a company can give to its loyal patrons are a seamless experience and respect for customer time. Successful companies such as Amazon nail both those things.

Empower the Engagement

The whole point of instituting a loyalty program is to encourage engagement, and hopefully cultivate sales in the process. One of the best ways to do that is to ensure that the rewards ecosystem itself is completely integrated into daily life – seamlessly. Systems such as vPromo’s electronic loyalty program allows reward members to use their existing credit card, to make both the loyalty transaction and the act of rewarding much, much easier.

With the swipe of a credit card, users can earn points or punches and redeem rewards for the merchant’s reward program. No more cards to lug around. No more coupons that need to be cut or printed out. Therefore, the best loyalty rewards programs are themselves engaging to use, fast, and simple; i.e. seamless.

This kind of straightforward simplicity is the stuff loyalty is made of.