The Added Value of Rewards1 Aug, 2008 By: Jacqueline Renfrow Response
A new era of financial service products offer benefits and relevance for both merchants and consumers and are also key players in direct response campaigns.
When the economy is in a slump, consumers look to cut back on spending. But more importantly, tight purse strings mean that the average American is looking to spend money more wisely. So for merchants and marketing agencies, that means one thing: incentives. Today's credit card merchants, loan brokers and insurance companies have to offer products and services with unique rewards, and it's the job of marketers to advertise those offers as tailored to fit a consumer's lifestyle.
Most credit card companies now offer customers rewards or cash-back. Some cards are even offering what are called "pre-rewards." But what's beneficial about this new way of doing business is how targeted incentives offer both direct response marketers and merchants key information that can help boost sales.
"With the way the economy is now, people want to know the basics: what's in it for me?" says Pam Lockard, founder, president and CEO of DMN3, a Houston-based integrated marketing company. "You have to have more of an offer to entice people, more incentives. People are tuning everything out so it really has to be a great deal."
But what kinds of rewards work best? According to Lockard, it depends on several factors including the type of advertisement and the timing. "I've seen variances of 300 percent, going on the same marketing list, with just the differences of offers, the clarity of offers, the creative and how it is presented. I didn't used to think it could make that much of a difference, but it can," she says.
Make Me an Offer
The media and your mailbox are saturated with credit card offers with zero-percent interest rates and car loans that tout no money down for a year. So marketers and advertisers are looking to find new incentives and new ways of reaching the consumer.
The Facecard was rolled out as a pre-paid, re-loadable card for millennials, but it s also turned into a viable marketing tool for member retailers that collect data as they offer coupons to participating consumers.
On June 21, edo Interactive, a financial and marketing services technology company based in Nashville, teamed up with MasterCard to launch Facecard, a prepaid card issued by MetaBank. The main idea for the card came about when the CEO's daughter amassed gift cards for her birthday and said she wished she could combine them all into one giant gift card. So, similarly, Facecard became a prepaid, re-loadable card targeted at millennials and their parents. It can be used wherever MasterCard is accepted and acts as an ATM for cash withdrawal.
So far, the company has mostly partnered with local merchants but hopes to expand to retailers across the country. The idea is that the stores can offer pre-rewards, or coupons, that will get consumers into the stores, benefiting both the retailer and the consumer. And as an extra incentive, Facecard is offering no fees for life to the first 250,000 customers who sign up.
Though still in its early stages, edo is planning on releasing another incentive in the fourth quarter called "edoCash." Once merchants build a customer base, they can offer frequency rewards, such as extra credit put on the card, if a consumer spends a certain amount in a given month, or even coupons in the form of text messages or E-mails.