A couple of weeks ago, I’d written about Offermatic, a newly launched service that promises deeply discounted offers on items of everyday purchase based on your credit or debit card transaction history.
Coming to think of it, direct marketers, banks and credit card companies have been doing this for decades. Direct marketers representing advertisers of FMCG and CPG products have been sending out mail shots through credit card issuers to cardholder lists for a long time. Do you recall the last time you received a credit card statement that wasn’t accompanied by a leaflet announcing discounts on electronics, luggage, perfumes and other items of everyday use? Now you get my drift.
On the face of it, it appears that Offermatic differentiates itself by sending out offers that are specifically targeted to each cardholder. That is, you receive an offer that is likely to be highly relevant to you based on your past purchase history.
On second thoughts, even banks and credit card companies claim to have started doing this in the last few years. With increased labor and postage costs, they have apparently begun to use spend analysis software to mine through your transaction history and send you offers that match your past purchase behavior. This way, they stand to improve conversion rates from their campaigns, instead of wasting money to send every offer to everybody, and then waste some more money to follow it up with telephone calls, and then land up with measly 1 in 200 conversion rates. However, I haven’t seen any evidence of this actually happening in practice with any of my credit cards in India, UK and Germany, so I’m not sure at what stage their rollouts of spend analysis technologies are.
If Offermatic is really able to fulfill its promise that it will “only send you offers that match your interests and purchasing history”, it might be able to make great strides where banks and credit card companies seem to be faltering. If and when that happens, it will be interesting to watch the reaction of banks and credit card companies: Will they ignore Offermatic? Or, will they claim ownership to transaction data and block Offermatic’s access to it? In the latter case, Offermatic will lose its ability to make targeted offers, which is its unique selling proposition. While cardholders can no doubt give away the usernames and passwords for their credit card online accounts to Offermatic, banks and credit card issuers can always take shelter behind specific clauses in their agreements that expressly forbid sharing of such sensitive information.
Eventually, it’d boil down to the question of “whose transaction is it anyway?”