Card-Linked Marketing Offers Better Return on In-Store Ads
Today's retail marketers are held accountable to a number of metrics, but three stand out: net new customers, returning customers, and basket size. Increasingly, marketers are asked to measure impact on these metrics from all their marketing and advertising spend, and to optimize their budgets to deliver the greatest possible lift.
In the see-it-click-it-buy-it online world, this kind of measurement is easy. Online marketers have rich analytics to track online checkouts and cart values all the way back to a shopper's Web search or display ad click. But in today's multichannel environment, the retail C-suite demands the same measurability from marketing focused on driving sales in the brick-and-mortar channel. But for in-store marketers, measuring the link between online and offline marketing tactics and in-store card swipes is much more challenging and costly.
A newer, fast-growing marketing channel that links offers to shoppers' debit and credit cards promises some relief for in-store marketers. By connecting marketing promotions directly to the point of sale—the actual card swipe—in-store marketers finally have a way to close the loop and measure the impact of their multichannel campaigns on in-store purchases. Let's look at the landscape for today's metric-deprived in-store marketers, and see how card-linked offers can help.
Marketing options for driving in-store sales
In the past, in-store sales were driven by a mix of traditional advertising channels: print advertising, radio and television ads, direct mail, billboards, and in-store signage and merchandising. Today, brick-and-mortar brand marketers continue to rely on these channels, but supplement them with a range of online marketing tactics, such as search engine marketing, display ads, and mobile advertising.
Unfortunately, none of these methods lends itself to direct in-store sales attribution; we can't know whether a given store purchase was triggered by a billboard along the buyer's commute route, a radio ad she heard, or an online display ad she clicked on, or a combination of all three.
Printed coupons: Coupons and other printed promotions redeemed at the point of sale provide much more accountability and measurability, since they can be tracked directly to the sale. But once coupons are published and marketed—online or offline—so much has to go right: The consumer must take the time to search for a coupon, clip it, and then remember to bring it with her to the store before it expires. Store associates have to accept the coupon, deal with expiration issues, and submit it for reimbursement. The major problem, though, is that coupons and discounts can't be targeted to specific customer segments.
Daily deals: Over the past few years, daily deals have burst onto the scene, promising to take coupons and deals to the next level. However, daily deals suffer from many of the same limitations as coupons. Targeting is difficult, and success is still dependent on a sequence of timely consumer actions. Aside from their minimal targeting and measurability, daily deal sites pose other problems as well, like voucher breakage, unexpected traffic spikes, and low repeat business.
Card-linked offers: made to measure
A new channel has opened up recently—one that cost-effectively and measurably drives the right consumers into stores to buy (and buy again). Card-linked offers address many of the challenges we've discussed here, and both national brands and local merchants are taking notice—using this new, more measurable channel to boost sales, customer retention, and the overall return on their marketing dollars.
Here's how they work. In-store marketers create a card "rewards" offer for shopping in store, such as five dollars cash back for every 50 dollars spent on a card, or 20 miles per dollar spent on a frequent-flier credit card. Marketers like these offers better than discounts or coupons because they don't cheapen the brand—it's a way to "thank" customers, versus taking something off the price (which consumers may grow to expect).
A new breed of ad network then "links" these rewards offers to the credit cards of key shopper segments, taking care to do this anonymously and protect consumers' privacy. Card-linked offers are then presented to cardholders through a range of online "card" marketing channels, such as bank Web sites, airline emails, and browser apps that display card-linked offers anywhere consumers shop and search online. Consumers are motivated by these offers because they promise bonus rewards in their "currency" of choice—just for swiping a card already in their pocket or wallet.
Redeeming card-linked offers is frictionless—there's no need for consumers to bother with printed coupons or vouchers. They simply shop in store and swipe their registered credit card. The ad network takes care of the rest, tracking eligible purchases—again, using strict privacy protection—and depositing rewards in cardholders' rewards accounts. The brand marketer that created the offer gets detailed transaction reporting and analytics to see how many net new customers and repeat customers redeemed offers. And unlike daily deals, card-linked offers are purely pay-for-performance. Marketers don't "fund" the offer until after qualifying sales occur.
Card-linked offers have another distinct advantage over other marketing channels: precision targeting. Because offers are linked to shoppers' most used credit and debit cards, merchants can target specific segments based on anonymous transaction data. For example, a brand marketer can create a more valuable offer and market it to shoppers who buy in a specific retail category but are not frequenting the brand's stores. This way, the marketer can actually see the impact of her offer, and how it moves market share in her brand's category.
The secret is out
Hundreds of big-name national brands and thousands of local stores are using card-linked offers today, and are seeing dramatic results in their now-measurable acquisition, loyalty, and basket-size numbers. Sometime soon—if you haven't already—you'll go to your bank's Web site, find a great deal linked to your card, and redeem it—just by swiping your favorite card. Shortly thereafter, you'll see your bonus rewards—points, miles, or even cash back—pile up in your account. It will change the way you think about shopping, and make you more likely to shop in stores again. And somewhere, a hard-working in-store brand marketer will get that much closer to his KPI target and bonus. It's a true win-win.
As vice president of marketing and products at Cartera Commerce, Marc Caltabiano is responsible for product strategy, product management, marketing, and public relations. Marc has 20 years of product and marketing experience in CRM, self-service, e-commerce, and enterprise search. Previously, Marc was the senior director of product management at Knova Software, guiding the company's product and positioning strategy, product roadmap, and product and release management. Marc has also had product and marketing management positions at Siebel Systems and Sun Microsystems. He holds 16 patents in search and knowledge management and has a BA from Williams College and an MBA from the Haas School at the University of California at Berkeley.