7 Card-Connected Marketing Programs

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For merchants interested in increasing customer engagement and encouraging loyalty at their stores and restaurants, getting customers to sign up for a store-based rewards program is only half the battle. The next challenge is getting customers to actually take advantage of the deals being offered. Although one-half of shoppers surveyed in a 2011 Gallup poll said they had signed up for a rewards program at the grocery store where they shop most often, just 28% of shoppers in that group were considered “activated participants” who intentionally used those programs on a regular basis.

Card-connected platforms help merchants promote customer loyalty without introducing any extra steps or hurdles to the traditional payment process. Customers swipe their cards just as they normally would, and the rewards or discounts they earn are automatically reflected on their next credit card or bank statements.

Here are seven card-connected programs that merchants can use to promote loyalty and customer engagement.

1. OfferLink
Created by Cartera, OfferLink is a service that lets local merchants connect to their customers’ credit and debit cards to offer points, cash back rewards, and airline miles. OfferLink promotes these offers by sending special emails and mobile alerts to customers with credit cards from its banking partners, which include Wells Fargo, CitiBank, and Barclays. As customers redeem these rewards, merchants are able to collect important marketing information, like spending habits, transaction amounts, and shopping frequency. OfferLink charges merchants a “small performance marketing fee” based on the amount of sales delivered by the program.

2. Go Social and Link, Like Love by American Express
AmEx offers two rewards programs for merchants: Link, Like, Love and Go Social. In both programs, cardholders are encouraged to link their cards to their Facebook and Foursquare accounts as a way to find and redeem offers from participating local merchants. The offers that consumers “load” onto their cards are applied to their in-store transactions and show up as credits on their next statements. Business owners can see how much their customers spend per transaction and how frequently they return using the same AmEx card. Businesses don’t pay a premium for the services; AmEx makes its money from the traditional transaction fees that merchants pay when people use their AmEx cards.

3. Prewards
Prewards by edō Interactive is a performance marketing platform that businesses can use to deliver redeemable offers to their customers’ credit, debit, and prepaid cards. Consumers with cards from participating banks, which include Fifth Third Bank and Ally Bank, receive emails or SMS messages when offers are available in their areas. When customers take advantage of Prewards offers, the money they save is immediately deposited into their accounts. Merchants can use edō Interactive’s platform to pinpoint customers spending at other businesses in their category, along with tracking spending thresholds, transactional information, and visit frequency. Prewards charges merchants on a pay-for-performance basis, charging a commission that ranges from 5% to 25% based on the size of the total ticket and the category of the merchant.

4. CardSpring
CardSpring is a payment platform that businesses and publishers can use to tie coupons to their customers’ credit cards. Customers provide participating stores with their credit card information, and in exchange they receive automatic discounts when pay with their connected cards. CardSpring’s API can be customized by merchants looking to create their own unique loyalty apps, and the platform works with virtually any type of credit card, debit card, or NFC device. CardSpring is still finalizing its pricing structure while it’s in closed beta.

5. LocalBonus
LocalBonus is a customer loyalty platform available in New York, Portland, Denver, Seattle, and Sacramento. Customers who register their credit cards and debit cards with LocalBonus can earn points each time they use those cards at participating local businesses. The points that customers earn at participating businesses are cumulative, and they can ultimately be redeemed for cash back rewards of up to 10%. LocalBonus charges merchants on a “pay-per-performance” revenue model, which includes a fee for using the service along with the cost of any rewards that customers earn.

6. OfferWise
OfferWise by First Data is a platform that lets merchants attach deals, coupons, and loyalty programs to their customers’ credit cards and mobile wallets. Merchants can send out deals through whichever offer providers they choose, and watch as those deals are redeemed using connected payment cards. Unlike competing platforms, OfferWise doesn’t limit the types of credit cards customers can use; OfferWise works on virtually any type of payment cards or NFC device. Although the program is still in pilot stage, it is expected to be available to First Data’s four million merchants by this summer.

7. MasterCard Offers Services
MasterCard’s recently-announced Offers Services program — which is expected to debut at the end of this quarter — will give merchants across the country a way to entice MasterCard cardholders with targeted deals. Card-issuers and member banks will be able to choose the local and regional deals they want to promote via mobile advertising, social media, and traditional shopping channels. Customers, meanwhile, can take advantage of these deals by using their registered cards. MasterCard is initially working on the program with Local Offer Network, and a pricing structure has yet to be announced.

Know of other platforms that merchants can use to offer card-linked discounts? Leave a description in the comments.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.