Card-linking vs Last Touch: Considerations for Building a Mobile Rewards Programs

Over the last decade, consumers have become accustomed to getting rewarded in one way or another for simply making a purchase or completing an activity. 75% of HelloWorld survey respondents stated that they expect discounts when making a purchase. Whether this is through a credit card points system, a frequent flier airline miles program, a rewards app, or even your local coffee shop’s loyalty card, the industry has come a long way to support online and offline shopping. The quick rise of mobile commerce — expected to hit $3.6 trillion globally by 2021 — has proven to be a significant opportunity, but matching this experience for mobile commerce is a challenge.

Building Mobile Rewards Programs

While the mobile rewards industry is prospering, the way in which programs are built varies. Two of the most popular methods are card-linked rewards and last touch offers. This post will explore and analyse both of these program types to help unravel the benefits and disadvantages as you think about crafting or optimizing a mobile rewards program.

Card-linked Rewards

According to the Card Linx Association, card-linking enables consumers to receive a discount or loyalty benefit automatically when they pay with a payment card that has been digitally linked to an offer or loyalty benefit.

Card-linked offers are a popular starting place for companies launching rewards programs — especially if they are seeking to drive usage of a new debit or credit card. Firstly, they seem the simplest — after all the user doesn’t have to do anything but link their card once and they will earn rewards whenever they shop at a participating retailer. Secondly, the customer has to use that particular card to gain a reward. While this might initially appear to be a benefit to the program organiser, we have to consider the other side of the equation — brands.

From the brand perspective, card-linking is a passive marketing channel where the user is not really thinking about the rewards they are getting from the program because savings happen automatically. This is sometimes referred to as ‘set it and forget it’ i.e. users choose the brands they want to earn rewards from and then no longer engage with said brand until they potentially notice they received a reward. There’s a strong chance the consumer would’ve purchased without this incentive, and brands recognize it. Today, many brands are measuring incrementality of their marketing efforts; it’s imperative to know that the money they’re spending is money well spent on purchases that wouldn’t have already happened.

Card-linked offers also do not provide brands with insight on the consumer’s purchase journey. There’s no data to show what triggered a purchase, where the user came from, or meaningful tactics to re-engage the user. There’s also no way of knowing whether this customer is new or existing — let alone doing any deeper forms of personalisation.

Offering rewards to customers also comes with its own set of inbuilt complexities. For example, what happens if a customer returns, exchanges, or changes the items they earned rewards on? If you’re using the card transaction data as the source of truth, you can put the transaction into a pending status for the return period, but that only applies to one transaction — not each item. So if a user returns one item from the order or decides to reduce their hotel stay by one night, it becomes challenging to ensure you’re awarding the customer the right amount without delving into multiple spreadsheets and accounting for a wide margin of error.

From being a passive marketing channel, to the data challenges and lack of insights, the long term implications are detrimental for card-linking programs. Brands offer much lower commissions for these sales which, in turn, lead to much lower rewards rates for the customer, and ultimately low program engagement rates.

Last Touch Offers

A second, increasingly popular, solution for mobile rewards is last touch offers. Button defines last touch rewards as: Rewards programs that enable users to earn discounts or cashback when they begin the shopping journey in a publisher that offers this program, select the qualifying offer, and complete an eligible purchase.

From the largest mobile-first organisations to the biggest rewards applications, many of the world’s leading rewards programs have developed based on last touch.

Traditional rewards organisations rely on Button to provide last touch for their mobile properties, alongside their offline card-linking solutions, because of issues including brand participation and technology complications with card-linking in mobile. Quidco is another example of a fruitful, last touch rewards program with many of the world’s largest retailers.

These programs have found success for brands and publishers alike as it’s an active marketing channel. When users are browsing in rewards programs, these are high-intent shoppers that might know what they want to purchase, but aren’t set on where they’re going to shop. According to Forbes, 84% of shoppers say discounts can influence where they shop. This is a strong incentive for brands to offer best-in-class rates as it is money well spent on an incremental purchase.

With last touch, brands become the source of truth. They report all orders, cancellations, and adjustments from their own data in real time. Platforms like Button are then able to take control of commissioning and ensure that rewards are only being paid out when it should be and at the right amount. No more wasting money on loyalty programs that don’t drive customer loyalty.

Additionally, last touch offers provide brands with insights on the publishers and programs that are driving the highest value users. When brands evaluate their channels, they’ll naturally invest more spend in the highest performing programs. Brands and publishers that participate in last touch programs with platforms like Button receive detailed performance insights to break down the consumer purchase journey and help recreate for other new users and iterate on to re-engage existing customers.

Unlocking the Power of Mobile Rewards

Of course, like most things in business — there’s no one size fits all solution. It’s critical to carefully evaluate the options. There are definitely uses for card-linking, such as driving traffic to smaller offline retailers, but there’s a reason that many of the world’s largest companies use a last touch program. To create a sustainable and successful rewards program there must be value for all parties — the brand, the publisher, and the consumer. Interested in learning more? Reach out to us or learn how we helped Ibotta (one of the fastest growing shopping apps in the US) power mobile rewards!