First Data’s Senior VP Dom Morea provided a set of important insights into the next generation of marketing services to small and medium businesses (SMBs) at BIA/Kelsey’s 2013 SMB Digital Marketing conference, saying these may be more about “commerce” than “advertising.” Using payments as an anchor, these “transaction marketing” services include deals, coupons, loyalty services and CRM/analytics. First Data is the giant processor of 55 percent of U.S. transactions, is aggressively pursuing this rapidly exploding space.

Morea stated that their research shows 82% of consumers want to have a seamless online/offline shopping experience. Over half (57%) start their journey to purchase either online or offline but want to finish their journey easily on the other side (i.e., starting online but ending offline for the final purchase). About four-fifths (81%) of consumers carry two or more loyalty cards and 40% want these to be personalized to them by providing tailored ads or offers.

For SMBs this creates quite a challenge. Providing simple, compelling loyalty programs that allow the consumer to seamlessly bridge their online and offline steps in their journey to purchase is not something they can do themselves. Morea provided a compelling case study of one SMB whose challenge it was to move away from costly plastic loyalty cards that had limited success in driving customer engagement to something that would work better. First Data’s solution was their Offerwise card-linked program that enables paperless redemption for offer providers, merchants, and consumers.

The result was that the SMB was able to learn more about the customer by tying in more data in an integrated view and the program drove up to 85% activation rates, much higher than the previous solution. The integrated data view allowed the SMB to leverage consumer analytics to personalize content and complete a multichannel experience.

Morea said the next frontier in transactional marketing involves rethinking mobile; leverage the cloud to integrate disparate parts of the process; and emerging privacy and security standards.

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The transfer of reward points and offers from print receipts and clipped newspaper pages to the cloud is expected to be a big part of promotional media’s next wave. But some merchants seem to be deliberately dragging their feet. CVS, for instance.

The giant drugstore chain, which has 67 million cardholders, has been repeatedly taken to task by LA Times columnist David Lazarus for endlessly delaying the switchover of its “Extra Bucks” Rewards Points from printed receipts to a digital record on its key chain cards.

CVS’ PR people have hemmed and hawed with Lazarus on the subject. They note that customers can already download coupons using their rewards numbers. But they also pointed to research showing that half its customers carry their receipts around with them from purchase to purchase and that its redemption rates were substantially higher than the industry redemption rate, which is about 3 percent. Customers need to “feel excited” about their rewards and seeing their earning level on a printed receipt is better than a digital card, they told Lazarus.

That assertion, however, doesn’t pass Lazarus’ smell test. He’s personally hovered around several CVS stores and couldn’t find a single person who said he or she wanted rewards on the big, bulky receipts. One customer put it like this: “This is a cheap way for a corporation to claim that they offer customer rewards while making it so inconvenient for the customer that the company doesn’t actually have to provide those rewards.” (Why do corporations try to browbeat people with nonsensical research?)

The irony is that CVS is definitely pushing the envelope with digital offers. Consumers can check a box online and get coupons sent directly to their cards. But they haven’t yet followed through with the Extra Bucks program.

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