When our LBS marketing startup, ZagMe, went bust back in 2001, I spent quite a lot of time analysing why. The tendency in these circumstances is to move on to the next thing, without really learning the lessons. However, I know that one of the issues was that it was way ahead of its time and I didn’t wish to forget all the learning. I also didn’t want a bunch of entrepreneurs making the same mistakes all over again. Not that it hasn’t stopped quite a few in the last 7 years, as it’s hard to learn from others’ mistakes.
ZagMe (if you don’t know) sent special offers to consumers’ mobiles by sms when they were out shopping in a couple of UK malls. We recruited 85,000 people and send about 1500 campaigns, so it was neither trivial nor unsuccessful, in many ways. But there were some issues with the model, one of which was the necessity of recruiting consumers as well as retailers and merchants. For a startup, that’s a little like fighting a war on two fronts and one of the attractions of AdMob all these years later was that we partner with others to get the traffic and focus on the tech and adsales.
In the White Paper I subsequently wrote about the lessons of plucky, pioneering ZagMe (email me for a free copy, if you haven’t read it), one of the better models I identified for this type of activity was for credit card companies:
Credit and credit card providers (both generic and store specific) would be advised to look at the potential of this channel too. Again, they already have relationships with their merchants and a remit to increase spending in those merchants with their products.
The ability, for instance, to target a store card owner with a specific offer in that store, provided the purchase is made with their card, is highly attractive. In addition, a credit-based purchase is more of an impulse-based one and that means goods and services with higher transaction values can be offered.
Fast forward to today and it seems Visa are trialling exactly the same idea, with participating brands like with brands including Macy’s, Marriott, Old Navy, Papa John’s Pizza and Circle K.
I hope they’ve read my White Paper, because it’ll save them a whole bunch of teething problems.