Coaxing more customers to walk in and shop is what every merchant wants out of a loyalty program, but it is not always clear how effective these campaigns are.
That’s why attribution — knowing for sure that new business resulted from a merchant’s marketing efforts — is such a holy grail in local, explicitly proving that spending money on a campaign is worth it. San Diego’s Empyr, which developed with an early focus on creating loyalty programs for merchants, says its platform now not only brings more transparency to these campaigns, but can deliver a better return on investment than other forms of local marketing. Its technology caught the attention if Yelp, and last fall the two companies entered into a partnership that serves the review site as well as the businesses it lists.
Merchants have long used loyalty cards and other campaigns to attract new clientele, as well as encourage repeat business, by offering discounts to customers who sign up. These loyalty programs can be marketed through publishers and other channels in order to increase a merchant’s reach with their target audience.
But these days, consumers can link their debit or credit cards to loyalty programs, eliminating the need for separate cards or apps to get in on deals. Card-linked loyalty campaigns are popping up at companies such as Uber, Groupon, LivingSocial, and Coupons.com, making it easier for customers to earn rewards while going about their business. “It takes all the friction out,” says Jon Carder, CEO and co-founder of Empyr.
Even with such features though, it remains a challenge sorting out what actually led consumers to make purchases at a restaurant or shop. Customer surveys can be clunky, sporadic ways to get feedback on this. Empyr’s platform gives marketers and publishers real-time data on purchases that come through loyalty programs. It also ties fees associated with using the platform to actual purchases rather than basing them on click-through rates or impressions.
Carder says his platform operates behind the scenes, for example on Yelp and other publisher sites that help people discover brands and businesses with goods and services they need. On those sites, consumers might see a button that asks them to sign up and link their credit cards to receive cashback when they make purchases with the participating merchant. Once they are signed up through Empyr and their card is connected to the loyalty program, they can receive benefits as they make purchases.
Merchants pay Empyr a fee, which includes a cut to the publishers and channel partners who list and promote the offers. Currently there are some 10,000 merchants across country using the platform, which reaches more than 100 million consumers, says Carder.
What matters beyond the loyalty program itself, he says, is that data that is procured through its use. For instance, if a consumer finds a restaurant through Yelp, accepts an offer for cashback when they link a credit card, and then uses it at the establishment, the transaction gets tracked via Empyr in real-time. This generates metrics that demonstrate the value of these loyalty programs to the merchants, helping them focus their marketing investments.
“Anyone with a physical store, they have a really hard time with digital marketing,” Carder says. Businesses might pay for ads online, with rates driven by clicks and impressions, but it is difficult to correlate such campaigns with into real revenue that comes into a store. With Empyr, Carder says, merchants only pay for revenue generated specifically by programs promoted through the platform: “It’s a much more affordable incentive. It’s much more sustainable.”
Until now, that sort of immediate marketing attribution has been hard to realize, Carder says, because of limits on technology and access to information. “The data just wasn’t available,” he says.
Just a few years, the only way to run card-linked, offer programs was through large credit and debit payment processors, Carder says. Under those terms, after purchases were made with linked cards, it could take three days before notifications of the transactions catch up, which can seem like an eternity in commerce. “Companies like Yelp and Microsoft aren’t going to run programs that have that kind of a poor consumer experience,” Carder says. “They need instant gratification.”
Banks might offer their own card-linked programs, he says, yet they tend to keep such transaction-related data close to the vest rather than share it with third parties. Seeing a way to address these pain points, Empyr established deals with Visa, MasterCard, and American Express to access their data in near real time, allowing transactions to be recorded instantly through the platform.
Empyr, which evolved out of Mogl, has raised $43 million over the past five years, Carder says, and now generates revenue whenever card-linked purchases are made.
Carder says the service Empyr offers is a discount compared to certain daily deals programs, some of which have required merchants to give up more than 50 percent of the revenue as part of the arrangement. Merchants who use the Empyr platform can control when the offers are available. For instance if a restaurant is usually packed on Friday nights, the discounts or cashback offers can be turned off. They can even place limits on the number of times a person earns perks, to better ensure the loyalty campaign does not wear out its welcome. —so a patron who comes in every single day might be restricted to two rewards per month.
Joao-Pierre Ruth is a Street Fight contributor.