ILM East: Loyalty Shifts Paradigm From Advertising to Commerce

Long before daily deals surged, and now after they’ve peaked and pivoted, loyalty and rewards programs stand as beachheads in the evolving online promotions/commerce ecosystem. At ILM East 2012, three leaders in loyalty discussed how advertising and commerce are quickly colliding, and how “big data” is shaping the new merchant/consumer relationship.

Next Jump CEO Charlie Kim suggested that advertising and commerce have been on a collision course for decades, with the paradigm shifting from acquiring new customers to acquiring new, loyal customers. Data he shared — loyal customers are worth 24 times more than new customers just acquired — supports his theory. Next Jump, which runs 90,000 B2B merchant-funded loyalty programs, is placing its bet on points systems that reinforce status and avoid privacy breaches.

Cartera Executive VP Jim Douglass is a believer in cultivating customer loyalty through hyper-relevant merchant offers that are card-linked to existing bank cards and tie into popular loyalty programs (airline miles, for instance) to motivate purchase. The company uses multiple sources of data to surface targeted deals that the merchant subsidizes only when consumers actually buy. Activity around the brand is then buttressed with deep analytics. “The payments and cards space is turning into an advertising business,” Douglass said.

Bundle is approaching the merchant loyalty space from a user perspective first, operating a consumer-facing site that analyzes credit card data to “rate merchants across several dimensions.” CEO Jaidev Shergill asserted that this enables unbiased views of restaurants that cut through the proverbial clutter of reviews sites such as Yelp. “You’re rating with your wallet.” Behavioral profiles are built, and lists created, that suggest other types of people who frequent specific restaurants, and where else they may go.

Whether it’s card-linked offers, purchase profiles, or points-driven perks, capturing, synthesizing and building actionable insights around data are the centerpieces of marrying loyalty and commerce, the next frontiers of both advertising and deals.