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Financial Services

The Added Value of Rewards

1 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.


Another company that focuses solely on rewards is Affinity Solutions. Since 1998, Affinity Solutions has offered rewards-based programs by working with bankcard issuers, insurance companies and magazine publishers. Today, the New York-based company has more than 30 million members in its program and works with more than 20,000 retailers. Affinity Solutions services three constituents: banks that issue debit and credit cards; retailers; and magazine publishers.

"Banks that issue these cards realize that rewards programs are a must," says Jonathan Silver, CEO and president. "If you don't have rewards programs, you're not going to succeed — period."

Affinity Solutions works with two-dozen financial institutions, including Washington Mutual and U.S. Bank, and manages the back end of rewards platforms for credit and debit card processors such as First Data. The company is behind 4.5 billion daily transactions, about $180 billion in spending.

Erin Esurance became the face of Esurance's direct response TV campaigns, debuting locally in 2004 and going national in late 2005.
Erin Esurance became the face of Esurance's direct response TV campaigns, debuting locally in 2004 and going national in late 2005.

 

Besides offering rewards to the credit card companies, Affinity Solutions also offers rewards through its magazine publishing clients. For example, the company is the provider of a retailer-funded shopping rewards program for Lucky magazine. Basically, a reader of the magazine can earn money to use at selected retailers and Affinity Solutions will send a MasterCard to the reader to spend those rewards.

"Basically, we bring them into bank rewards programs by taking content from the magazine and making it more valuable to the card holder and by enhancing the shopping experience through online or mobile device," says Silver. "We're doing much more than delivering an offer, we're delivering a holistic experience."

The company also works with interior design magazines, which work symbiotically with home furnishing retailers. What's important, says Silver, is relevance — or driving a rabbit to the carrot. "Whatever bundle of value would drive your engagement," says Silver.

He also sees these publishing rewards programs as a prime marketing opportunity. "Once you start leveraging this data from existing customers from the deployment of campaigns and magazine subscription lists, you can do all kinds of cool things to get consumers to respond and participate," he says.

 

Product as Marketing Tool

 

When edo Intl. was dreaming up what attributes consumers would want in the Facecard, the company also was thinking of ways to turn the card into an advertising vehicle. Gordon Caldwell, vice president of sales and business development at edo, says that Facecard's electronic couponing and incentives are also a powerful direct response tool that makes the card just as, if not more, attractive to retailers as it is to consumers.

"We have a way to really track the purchase cycle, from the presented customer offer to the actual redemption," says Caldwell. "Since we're leveraging the card, we know how much, where and at what time the purchase was made. Then we can report back to merchants the campaign metrics; here are the days and times when your rewards were redeemed the most."

Affinity Solutions' rewards-based programs also offer DR marketing tools for retailers, credit card companies and magazines. Silver calls it the "ultimate database" for retailers: a way to pick up on consumer behavior by tracking actual purchase data. "Every transaction that is sent to us, we can pull out all the spend information, including sales at our competitors in the categories that we don't have partners in," says Silver.

Not to mention, Affinity Solutions has access to customer information that retailers are not normally allowed to see (since banks can't give out data to third parties). But by signing up for a rewards program, the consumer has given permission for that data to be shared.

Silver says that the average retailer can communicate with between 30 and 35 percent of its customer base through information collected at point-of-sale. But Affinity Solutions, through the rewards data, has information on a larger customer base and more than just name, address and telephone number.

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