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Marketing

Capturing the Card-Carriers

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W ith the economy still struggling to regain its footing, many consumers remain focused on getting the most bang for their bucks. At the same time, retailers are looking for ways to entice budget-conscious shoppers to their stores.

edo Interactive offers a solution for both challenges. Once consumers sign up with edo through their financial institutions, they receive offers from different retailers via e-mail or through their mobile phones; the offers are different from typical coupons in that the money saved — say, $5 off a $30 purchase — goes directly into their bank accounts. “We’re building a new advertising and promotional channel,” says Jeff Fagel, vice president of marketing and brand development for edo, which is working with nearly 150 financial institutions.

Retailers can target customers that haven’t made a purchase within the past six months with an offer to save on a future transaction. “They get the ability to drive new customers and activate current customers, so they’ll spend more and increase their basket size,” Fagel says.

Rewards in seconds
Say a consumer receives a weekly e-mail or a text message with a half-dozen offers, including one for $1 off at a coffee chain. The shopper purchases a latte at the coffee shop and swipes her credit or debit card at checkout. Within seconds, the shopper receives a notification that the dollar has been refunded to her bank account.

“There’s no change in the consumer’s behavior and no change to the retailer side,” Fagel says, adding that the sales associate has no way of knowing that the customer is receiving money back as a result of her purchase. “The redemption is driven off the credit or debit card — it doesn’t show up on the receipt or on the POS system.”

All data transmitted through the edo application is anonymous and tokenized, Fagel says. “We see no personal information from cardholders.”
Retailers are charged for the edo application on a pay-for-performance basis, and edo receives a percentage of the target amount from each qualifying transaction. So, if the offer kicks in at $100, Edo might receive 10 percent of the $100. The amount of edo’s commission stays the same, even if the customer actually spends more than $100.

Other than the commission, retailers typically don’t incur production costs, nor do they have to change POS systems or train sales associates. To get started, the application requires just a copy of the retailer’s logo, as well as some text describing the promotional offer.

Bringing customers back
The results can be impressive. edo recently worked with a national department store chain to offer customers $8 back on purchases of $50 or more. Customers receiving the offer were identified through spending data available via edo’s credit and debit card partners.

An analysis conducted after the promotion revealed that 40 percent of customers who redeemed the offer hadn’t shopped at the store in the previous four months. The average transaction size jumped from $48 pre-offer to $88 after the promotion — and 40 percent of the new customers returned within six weeks.

Results like this are the fuel for edo’s growth: From 300,000 cardholders earlier this year, management expects to have 50 million customers on board by the end of the year, Fagel says.

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