Over the past few years, card-linked offers (CLO) have emerged as the next "it digital advertising channel and is angling to underpin daily-deals platforms that havent delivered the long-term customer engagement once promised.
However, like the daily-deal model, traditional CLOs have not built the kind of long-term and sustainable loyalty that generates sales, increased and ongoing, from customers who visit frequently and have developed a true connection with the merchant.
While CLOs alleviate the costly IT implementations typically needed by customer rewards programs, its the financial institution or card issuer that controls both the customer relationship and the data. The result: the merchant doesnt have access to detailed customer information or transactional data, and usually cant communicate savings opportunities or benefits directly to customers before or at the point-of-sale.
The customer experience of traditional CLOs also presents a challenge, as consumers must intentionally opt-in to receive offers and discounts, or actively search for relevant offers.
This creates a potential breakdown in participation of customers who may not receive optimal communications, or understand the program, or do not take the time to read and choose offers. As financial institutions usually wait to notify customers about reward balances until their next credit card statement, anywhere from 45 to 60 days after the customer has made a qualifying purchase, merchants are also missing out on long-term attribution as consumers have likely forgotten where they earned the reward, or worse: that they have earned the reward at all.
The question emerges then, have brands truly traded up from the daily deal or is it more of the same with traditional CLOs?
The approach of CLO strategy needs a makeover to ensure it is enabling consumers to earn frequent, value-laden rewards from everyday purchases, while putting more control and insights back into the hands of merchants and brands.
As the CLO market matures, there is an opportunity to create rewards offers that are card-agnostic, breaking the one-card/one-merchant mold and instead rewarding customers transactions through a singular rewards currency, coalition loyalty model.
With consumers connecting their credit and debit cards to a broader merchant network instead of needing to seek out rewards and discounts one by one, they can earn rewards cumulatively through any card and merchant within a coalition loyalty program.
Maintaining all of the benefits of traditional CLOs, this loyalty-powered approach provides merchants with an added data insight benefit. For example, a typical customer may visit a store and pay with a debit card for one purchase, and then buy online from the same merchant using a different credit card.
In the traditional CLO environment, those discreet transactions appear to originate from two distinct customers. But because coalition loyalty-based CLO transactions are matched with personally identifiable information (PII), the platform can trace both of those transactions to a single customer rather than mistakenly record them as unique purchasers.
The enhanced data stream helps identify and diffuse common CLO issues and profile cardholder behaviors to determine why a customer engaged, tracking data across cards and banks and incorporating and linking historical information to individual customers to provide a holistic view, attribution and support relevant marketing initiatives.
CLOs provide the perfect opportunity for merchants to prove to customers how important their loyalty is. Supercharging with coalition loyalty can create the long-term engagement that merchants desperately need and also represent the evolutionary solution that takes advantage of technology and long understood consumer demands for a 21st-century loyalty program that truly meets customer expectations.
Brandon Logsdon is the President and CEO of Excentus.
