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Direct Response Marketing

LivingSocial to Launch Credit Card

7 Mar, 2012 By: Jackie Jones


WASHINGTON – Daily-deal site LivingSocial plans to launch its first credit card within the next few months, according to Brendan Lewis, director of corporate communications at the Washington-based company.

While details are still being worked out, the card plans to offer consumers loyalty benefits through Chase, co-branded with Visa, according to LivingSocial. It is just one example of how daily-deal sites are striving to keep up the momentum and overall popularity they enjoyed when they first gained consumers’ attention.

“(The card) gives members another innovative tool that LivingSocial can help to give them additional value, even outside of the environment of purchasing LivingSocial.com,” Lewis said. “As we formalize all the particulars of the card, there will obviously be other incentives for our members to use the card.”

The credit card is aimed to help merchants drive additional customers to stores, whether or not a current LivingSocial deal is running, Lewis added. John Bax, LivingSocial’s chief financial officer, told International Business Times that it is also a way to help LivingSocial merchants gain repeat, more loyal and potentially long-term customers, something critics have been quick to point out as a weakness of the daily-deal site phenomenon.

“We will use this as a platform to encourage people to come back to merchants,” Bax said. “Small- and medium-sized businesses will never be able to have their own credit card or loyalty program. We will be able to bring them the benefits of that.”

The strength of daily-deal sites such as LivingSocial and Groupon have so far been in attracting new customers, rather than building a pool of repeat consumers, according to past studies by ForeSee Results (Response This Week, June 27, 2011).

Among those who purchase offers from daily deal sites, 31 percent are new customers – with many reporting that they’d never heard of the company before the offer – and 27 percent were previously infrequent customers, according to ForeSee, which examined daily deal sites as part of its annual customer satisfaction survey on the top 100 E-retailers.

“That’s at least 35 percent and arguably 62 percent of deal buying that represent new business,” ForeSee president and CEO Larry Freed wrote on his blog, FreedYourMind.com. “This is compelling data, and these are the customers that provide what the daily deal model is supposed to provide: bringing you new customers to try your business or products out.”


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