Card-linked offers are gaining traction with marketing professionals and consumers alike; for both groups, it’s hard to argue with cash or points back on a purchase. As we’ve noted before, consumers don’t necessarily see card-linked offers (also called CLOs) as a type of advertisement. Instead, a CLO is a bit of bottled joy, truly a “reward” that goes straight back into the purchaser’s pocket, whether they’re earning points or miles or simple cashback.
CLO campaigns are subject to a variety of variables (e.g., amount of percentage back, duration of offer, targeting, and more). And one of the very first considerations is whether you’ll run a “click-to-activate” campaign or a “frictionless” campaign. Each of these two offer types has its pros and cons, but here at Kard we see the most success from a frictionless offer.
Click-to-Activate vs Frictionless: What’s the Difference?
Fortunately, the two types of cashback offers are well-labeled. Click-to-activate offers require that the user see the offer on their payment card platform and interact with it in some way to activate it: a click, a tap, perhaps visiting an external website. And frictionless offers are the opposite; for this type of campaign, the customer need only make a valid rewardable purchase, and they receive their reward in near-real-time (at least on the Kard network).
Why Choose Click-to-Activate?
One of the primary reasons a marketer chooses a click-to-activate offer is that it provides robust tracking metrics. In theory, the CLO platform or the marketer’s own website will track every click the campaign receives; while it’s not necessarily every view the campaign garners, the interaction metrics are still very powerful. A click-to-activate offer can also engender more ownership of the campaign by the user; some users feel more connected and involved when they go through their available offers and select the ones that apply to them. There’s also a general perception that, if a customer goes to the trouble of activating the offer (instead of simply viewing it), they will be more likely to subsequently redeem the offer, because the act of activating it keeps it in the front of their mind.
Why Choose Frictionless?
The benefit of a frictionless offer lies mostly in the simplicity for the customer. While some customers feel more connected to offers they select and activate, a great many more will either not remember to go through and activate new offers every so often, or will mildly resent the requirement that they pay extremely close attention to the CLOs that are served to them. The ability of a frictionless offer to “surprise and delight” a customer is unmatched, too: A subset of card users will ignore marketing emails from their bank and resist opening the page of available offers on their payment card platform, but if they make a rewardable (frictionless) purchase, suddenly their cashback notification connects them to the brand in a way they would not otherwise have sought out. And it has an effect on their future purchase behavior, too. Studies find that cashback payments not only draw additional purchase but also increase the size of future purchases.
Here at Kard, we land reasonably strongly on the side of frictionless offers. If the click-to-activate offer truly requires a customer interaction in order to redeem, the added benefit of being front-of-mind for certain customers is too often outweighed by the detriment of card users not seeing it or not activating it. We also think frictionless offers are remarkably on-brand for any card-linked offer. The idea that you can simply make a purchase and receive a reward is the biggest draw of a CLO to begin with, and a frictionless offer hammers that idea home.
What’s the Future of the Frictionless CLO?
What we see coming down the pipeline for card-linked offers is more personalization of offers, based on a customer’s location or purchase history or a variety of other factors. For personalized offers, whether they’re driven by artificial intelligence or a sophisticated algorithm, the frictionless offer is king. Automatic personalization, automatic serving of offers, and automatic cashback keeps everything smooth and seamless for the customer; the association they will eventually have with your brand is ease and simplicity and engagement. And that’s the goal! A positive feedback loop for your brand, right within a customer’s banking platform, is extremely powerful.
Curious about what it takes to run an offer on the Kard network and reach our millions of young, diverse cardholders? Get in touch today!