On any given night, you might see commercials that push these tempting rewards you can cash in on for simply using a certain credit card. Banks constantly are trying to market their credit cards with enticing offers like 2% cash back on all purchases, triple the points on certain purchases for vacation getaways or double miles for every buy at select retailers.
Consumers, depending on their personal financial information (like their credit score) and relative desire for rewards programs will choose a credit card and begin spending. They will start earning points based on purchases to use towards rewards; rewards that could be automatically transferred into cash or redeemed for something else through a merchant network, a group of retailers in partnership with the card issuing company and companies like Cartera Commerce that help provide merchant networks.
For a long time credit and debit cards were a cash cow for banks and card issuers alike, as far as revenue was concerned. Banks would make money off credit card interest, as well as charge merchants a transaction fee for every debit card swipe. Then the Durbin Amendment passed with its final ruling just over a month ago, which caps card issuers on what they can collect on transaction fees: 21 cents per transaction on top of .05% of the value of that purchase. Bottom line: card issuers just lost a huge source of income and the whole concept of merchant networks is being reevaluated.
Now we are seeing a bunch of new companies rush in to capture customer loyalty yet again with a set of enticing offers through mobile apps or new functionality.
Enter card-linked offers.
Banks used to see card offers as part of a large revenue stream. Now banks need to find unique technologies in order to capture the customers’ attention again. Some of that technology comes from mergers such as Cartera and Vesidia to form a new more innovative merchant network platform. Other pieces of the card-linked offer space is coming from companies that are focused on card-linked offers, such as Boston-based Clovr Media.
The key in Clovr’s rewards ecosystem is not the card issuer or the company providing the technology. It’s a new player. It’s the advertisers. When advertisers and merchants are willing to pay a fee or % of sale to reach cardholders, suddenly a new revenue stream has been born.
Card-Linked Ads while browsing the web on your PC or mobile phone will be the next thing consumers see. When you click on an ad, an email or text will confirm that the offer is linked to your card. Once you make the purchase, then you will receive another email confirming the purchase (and savings will later appear on your credit or debit statement.) The beauty is Clovr doesn’t limit the consumer to just one card to collect loyalty rewards. It works with pretty much any debit or credit card.
Tom Burgess, CEO of Clovr, sat down to talk with me about card-linked offers and how Clovr differentiates itself.
“We are out in the wild. We enable offers out there where the consumer is browsing. For example, it could be on banner ads out in the internet. Ad networks have a new feature and function to take advantage of using our company.”
Clovr’s customers are ad agencies that are aiming to provide card-linked offers for their clients. Now those agencies can directly link ad spend with consumer purchases.
The card-linked offer company wants to make sure that promotions they are powering are meaningful. They do that by getting down to the SKU level (the long number on products that identifies a unique product within a store. Tom said, “we can go right down into a particular product within a store, get right down into the SKU level. Instead of 10 dollars off at Staples, it’s 10 dollars off a cannon printer at Staples. We see that as a very powerful concept.
Clovr has been working with large banks, as well as advertisers for a big launch in the fourth quarter where they will name the financial institutions they have partnered with. With these bank partnerships it will only require a one click opt in. Clovr doesn’t push direct sales as Tom referred to his team as “the powered-by guys” meaning Clovr is the glue holding the card-linked offer program together.
“It fits the economy, it fits the general model of the banking industry. We built the concept on loyalty. And lets build something that is loyalty. We want to allow the consumer to find the offers and save money.” Tom said about how Clovr media fits in the loyalty space.
With Clovr, banks win by leveraging a new loyalty program that is consumer friendly. Ad agencies win because they can accurately track ad spend for various products and build targeted campaigns. Brands win because ad agencies are pushing out these targeted digital ads powered by Clovr. There is only one piece of the puzzle missing. Consumers. But Tom doesn’t think that is too far away. Now when they see how easy it is to save on the things they normally buy.
Keep an eye out for card-linked offers coming to a screen near you.
Image courtesy of wholenewweb.com