The Makings of an Industry: Card-Linked Offers – Part II




Hello World 1.0: Delayed Cards




Real-Time Advantage vs. Delayed




That means everyone wins.


Card-linked Offers Are Here!









Hello World 2.0: Card-Linked Offers









Card-Linked Offers Mean No Hassles


Card-Linked Offers Mean No Hassles

How and why card-linked offers are poised to boost the earning potential of businesses across the nation.

The Daily Deals (Re)Model

It’s no secret. Consumers and merchants alike have lost their enthusiasm for Daily Deals a la Groupon, Living Social, and a million other copy-cat e-coupon peddlers. To the discerning eyes of the general public, once the novelty of getting “half-off French cuisine” wore off, many of these email-based platforms began looking suspiciously similar to spam. On the merchant side, the initial promise of daily deals either never materialized, or manifested itself in a new set of insurmountable challenges – such as an incredibly lopsided merchant agreement which gobbled up most of a local merchant’s profits while saddling them with all the risks.

Even worse, many establishments who did manage to run a successful deal campaign through the e-coupon platform soon found that the deal-seeking crowds immediately disappeared after the deals ran their course. As it turns out, cut-rate price promotions don’t engender loyalty at all. This effectively left partnering merchants back at square one, or for an unlucky few, utterly ruined financially.

The daily deals financial model is, in its current configuration, probably not business-friendly. More accurately, it is just a remodel, a re-skinning of the age-old practice of showering consumers with coupons – hardly the lauded cure for the marketing woes of a business.

The Card-linked Offers Model

In lieu of these revelations, what is a business to do? In truth, there is no silver bullet fix for low customer engagement, faltering consumer loyalty, or lack of general enthusiasm. Ultimately, the ideal solution is to build a better product, improve customer service, and design a superior customer experience. Groupon and its many imitators failed to add value on all three critical fronts, relying exclusively instead on aggressive price slashing.

Card-linked offers, in contrast, take the idea of ecommerce integration a step in the right direction. The real strength of card-linked systems, and Groupon’s greatest failure, lay in its potential as an engagement tool.

In Groupon’s case, when it came down to it, it was still all about hawking coupons. The only difference was that the act of salesmanship received a technology-appropriate upgrade in the form of a slick website and a well-developed email-farming apparatus. The cultivation of actual customer loyalty was left unaddressed.

Card-linked systems aim to dig much deeper and develop what some call a sustainable business ecosystem, within which consumers, local merchants, and financial institutions all mutually benefit.

The benefits for financial institutions and banks are obvious – more card usage. But, both consumers and merchants also benefit greatly within a card-linked ecosystem. Consumers skip the need to print and cut out coupon promotions and mail-in-rebates, and receive rewards as an easy-to-decipher percentage of their total spending.

No confusion about stacking deals. No worrying about expiration dates. No hassles.

Better yet, deals are individually targeted and directly linked to a credit or debit card, drastically reducing unwanted email inbox filler and frantic check-out counter searching for lost coupons. Merchants benefit from the expanded reach offered by credit card companies. More importantly, pairing promotions directly with specific credit cards effectively allows merchants to “borrow” consumer loyalty from the card providers.

Merchants also gain easy-to-parse, and highly valuable, consumer purchasing histories, which can help inform increasingly effective and individualized promotions consumers will actually act on. All this is to say that card-linked systems are poised to become an entirely new integrated engagement platform, rather than just the reformulation of an old strategy.

For businesses, this could be a transformative development that has the potential to tie all the disparate pieces of conventional marketing practice into simple, unified architecture. As card-linked offers gain wider acceptance, they will eventually become as commonplace as punch cards and membership cards are today. By leveraging a host of equalizing technologies, such as social media and card-linked offers, retailers and business outfits stand a real chance of competing on a wider scale than ever before.

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


The Power of Card-Linked Offers


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.



Card-Linked Offers: The Future of Deals


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.



When Building a Loyalty Program: Time is of the Essence


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


Loyalty Programs Should be Seamless


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

Smooth Out the Seams







Empower the Engagement





Why Loyalty Matters: Measuring the Cost of Losing a Customer


Why Loyalty Matters: Measuring the Cost of Losing a Customer

Hearing loyalty marketing experts tout the value of customer loyalty can often feel like listening to a broken record. We get that customer loyalty is important. We get that high levels of loyalty directly drive company profits, and ultimately, long-term success. We understand that developing long-term relationships with a customer base, much like a constituency, is so very critical to success.

But behind all the heady rhetoric lies a rock solid core question that many business owners don’t really get: How much does it cost to lose a long-term client? After all, you can’t manage what you can’t measure.

Calculating the Ripple Effect

Losing a long-term client, or when a patron goes “inactive”, represents a significant loss – more significant than many proprietor’s may assume. Sure, lost customers and their financial contribution to a firm’s bottom line could, in theory, be made up for with new business and new customers.

But the cost of acquiring new customers, through marketing campaigns, promotions, and other new customer acquisition strategies, requires a significant outlay of money that will eat into what profit can be earned. Long-term patrons don’t require the kind of expensive upkeep required to acquire, retain, and ultimately convert newcomers into regulars.

Regulars are low maintenance, yet according to the “Pareto principle”, otherwise known as the 80/20 rule, they often contribute the most to a company’s total income. Furthermore, when a long-term client takes his or her business elsewhere, the dumped company forfeits more than just a single purchase, they also lose out on that client’s future purchases as well, leading to a ripple effect of loss over time.

In Thriving on Chaos, author Tom Peters suggests calculating the 10-year value of a firm’s clientele. By using this simple device to help quantify a customer’s future buying potential, business owners can begin to understand and appreciate the value of a customer (and why it would be beneficial to keep them coming back). So how does this work for a sub shop restaurant with a customer that dines once a week and spends $10 each visit?

          Annual Customer Purchases * 10 Years = Rough Lifetime Value (LVT)
          For example: $520 avg yearly spend * 10 years = $5,200 rough LVT

The problem is, most small shop owners would view this customer as a one-off $10 transaction, when in actuality this particular customer is worth $5,200. Interestingly, industries with repeat business like restaurants rarely track lifetime value, which is probably due to the fact they don’t have the data to track frequency and spend and identify high value customers, which is due to the fact that they do not have a loyalty program. The key take away here is that customers have a lifetime value (LTV), composed of many transactions that when viewed in sum, represent a much more significant amount of money than a simple, one-time purchase.

The customer and his or her future buying potential represents a huge appreciating asset for businesses. For example, a sub shop may do 2,000 transactions a month. Per the Pareto Rule, 20% or 400 on average dine there once a week, for a total of 1,600 transactions that month. Some of them dine more and some less, but you get the idea.

For many market sectors, losses resulting from poor customer loyalty don’t simply stop at lost direct sales. A disloyal customer may dissuade their friends and family from making purchases, greatly compounding the accrued losses a firm may suffer. A prospect worth $5,200 dollars over a decade may cost a business many times that depending on what kind of word of mouth business they bring (or turn away).

A dissatisfied customer will tell 8 to 10 others about their experience. 1 in 5 tell another twenty. Most American automakers are still wrestling with the ill effects of a bad PR ripple that has persisted for decades. As you can see, lost customers can, in some circumstances, start a chain-reaction of negative PR that can quickly become unmanageable. However, as we pointed out earlier, “you can’t manage what you can’t measure”.

So What’s Killing Loyalty?

A Rockefeller Foundation study found that the most common reasons formerly loyal customers chose to take their business elsewhere were as follows:

  • 14 percent switched to the competition because complaints were not handled.
  • 9 percent left simply because the competition offered a better deal.
  • 9 percent ceased doing business because of geographical relocation.

However, the vast majority of respondents, 68 percent, claimed to have switched for “no special reason at all.”

What that means, suggests author Jill Griffin, is that most customers leave because of benign neglect. More than half the time, customers will not communicate their dissatisfaction; they will simply take their business elsewhere, leaving many businesses both confused and flustered. As it turns out, maintaining a long-term relationship with individual consumers requires constant attention and investment.

Invest in Good Customers

With the Pareto principle mentioned earlier in mind, it is important to note that sometimes it is actually okay to lose a bad customer. Companies should be worried about acquiring fairweather customers that will bale as soon as a promotion ends, or from a bottom line perspective, customers who become more expensive to retain than they are worth.

Most companies simply cannot afford to buy loyalty – at least not everyone’s loyalty. Nor should they. Rather, firms should focus on acquiring and investing in so-called “good customers”.

Good customers typically exhibit higher CLV’s, and higher levels of loyalty, yet require significantly less resources to retain. Unfortunately, many establishments make the mistake of dumping their entire marketing budgets into enticing new customers to make first-time purchases – a rather expensive strategy with questionable returns. Rather, by identifying and then cultivating long-term relationships, as opposed to short-term transactions, with high-CLV patrons, a business stands a much better chance of succeeding.

If you or your business is spending tons of money with little return in order to acquire new customers, you are probably going about it wrong. The goal isn’t to buy loyal customers, it’s to earn them, then keep them with constant investment and engagement.

One way to retain good customers is to reward them for their patronage. However, implementing an effective loyalty rewards system is challenging.

For businesses looking for a seamless way to reward their best customers vPromos can help!



Act Like You Know Your Loyal Customers


Act Like You Know Your Loyal Customers





Today vPromos technology. . .



Now that makes me feel good.


Don’t Tax Your Customers


Don’t Tax Your Customers

Want to win repeat customers that will come back to your establishment time and time again? Rewards marketing can be a good strategy for providing both value-added benefits and as a means of differentiating from the competition. However, many businesses, in their rush to build a rewards program themselves often forget the cardinal rule of rewards marketing:

Make it easy.

Nothing kills a rewards program faster than inconvenience.

Don’t Impose a Brain Tax on Your Customers

In the United States, no one, other than tax preparers and accountants likes the process of paying taxes. The forms are just too hard. In fact, according to a compilation of Gallop polling on this matter, it would be safe to say that a majority of Americans hate the process of paying taxes – regardless of how high, or relatively low they may be. It is the process. Paying taxes should be easy. It is easy in Europe where they have a value added tax, a National sales tax if you will. That is an easy tax, and not many people think about it when they pay, or for that matter complain about it. If I were in charge, I would set up an easy, value added tax, to take the pain out of taxes.

When it comes to businesses, and their interaction with customers, many establishments unknowingly levy another kind of tax – a “brain tax” – measured in time wasted and inconvenience, on their clientele. Worse, many establishments do so without even bothering to notify the populace.

In today’s marketplace, businesses are vying for a share of the public’s attention, and obviously, a piece of their wallet too. Customer loyalty programs are now a must for businesses looking to win new customers, reward loyal ones, and convert fickle buyers into repeat customers. The average consumer is enrolled in an astonishing 18 separate programs, many of which are structured in exactly the same manner, making differentiation a key frustration.

However, what enrollment numbers can’t quantify is the actual level of engagement in the ocean of loyalty programs out there. A study released by Monash University found that the average male actively participated in a grand total of two programs. Females, who are often more heavily targeted for participation, averaged four. That means that out of the many hundreds of rewards programs consumers are exposed to, they only take action on 18, with 14 to 16 of that elite selection languishing in cognitive oblivion. The numbers don’t look good.

The question for many businesses out there remains: How do we improve on these dismal statistics?

Playing the Rewards Game to Win

The key to a rewards program that works is quite simple: simplicity. More specifically, ease of use appears to be the key differentiator. American Banker Magazine reports that the primary driver of customer preference for certain rewards programs was, in fact, determined by how easy those programs were to use.

However, a stunning 81 percent of loyalty members polled don’t even know the program benefits of the programs in which they are enrolled or how and when they will receive rewards. As a result, as much as one third of all rewards dollars and miles, amounting to some 16 billion dollars annually, goes unredeemed, thanks to hurdles and opacity built into many rewards schemes.

This leads to a potentially damaging conclusion in the mind of consumers, “They don’t actually want to reward me.” Or worse, “This is just another marketing scheme.”

Consumer trust in businesses has been on the rocks for decades, and correlates with a decline in general loyalty in the marketplace. As it turns out, consumers don’t like taxes much either, particularly if what they are expending is time and effort. Hurdles, such as long application processes or convoluted rewards hierarchies, effectively function as a brain tax.

Regardless, the fact remains: Businesses looking to implement a successful loyalty program need to make their approach easy to understand, and even easier to use.

4 Ways to Keep Your Rewards Program Nice and Easy

Keep the Customer Informed

85 percent of loyalty members haven’t heard a single word from the establishment or service provider since the day they signed up. That’s an enormous, wasted opportunity. Consumers take action to sign up for a program exactly because they either like the service or product, or see the potential for savings and other forms of value added in the rewards plan. This is a target audience that has taken the first step towards full engagement and given the right attention and incentives, could be ready to take their relationship with the company, or brand, even further.

Don’t Introduce New Rules Willynilly

A study done by researchers at the University of Michigan showed that learning new rules is both mentally taxing and potentially costly. The truth is, people today only have so much time and brainpower to devote to any one subject. That means that if the rules of a loyalty program change enough, many consumers will simply cease participating in it.

Help Your Customers On Their Way

When it comes to rewards points, punch cards, and other “buy X number of times, get one free” schemes, nothing is more discouraging for a customer than feeling like the reward itself is impossible, or difficult to obtain. On the flip side, few things can encourage a repeat visit as strongly as a rewards threshold that is on the verge of being met.

Therefore, rather than providing one goal that may require many visits, it is far better to intersperse many smaller benefits along the way to a larger reward. Has the customer been coming less often recently? Give them some points to help them along. Is it their birthday? Go ahead and give them a freebie this time. The point is, don’t make reaching their rewards goal a hassle. Make it easy. By culturing a reward relationship, as opposed to focusing on a singular goal, it encourages constant user engagement.

Provide Some Actual Value

Of course any rewards goal is no good if it isn’t worth the effort. Only 36 percent of consumers received a reward or promotion that actually motivated them to make a second visit. Few of U.S. respondents say that loyalty programs are influential in their purchasing decisions. If it’s not worth their time, consumers won’t bother.

A customer’s time is important – and irreplaceable. Make it worth their while, and more importantly, make it quick. Customer attrition numbers cast a rather bleak picture on the efficacy of many loyalty programs.

Considering the inbuilt hurdles, worthless or hard to get rewards, and other forms of cognitive taxes imposed on consumers by many ill-conceived loyalty schemes, it’s small wonder the public is often wary of these programs. As it turns out, proposing a tax on their time and energy is not a winning proposition. Yet many companies still do it, and wonder why their often times expensive loyalty schemes aren’t paying any dividends.

The inconvenient truth is, it’s because they’re program just isn’t convenient enough. In an age of increasing consumer choice, and lessening attention spans as a result, if your loyalty pitch can’t be understood and put to use immediately, no one will care.

How have loyalty programs worked out for you? To learn more about easy loyalty marketing, please visit vPromos at