Referral Marketing Goes Digital

Smart Circle is digitizing its tear-away coupon cards.

Smart Circle International, which offers referral marketing services and direct-to-consumer sales, is making its Smart Circle cards available in digital format. The company announced the digital version of its consumer value card Feb. 20.

Thomas Cornelius, vice president of business development for Smart Circle, said participating retailers will be able to redeem promotional offers by swiping the magnetic stripe on the back of a customer's card.

"The magnetic swipe card integrates with the POS [point of sale] at the local merchant or we provide an out-of-the-box terminal," Cornelius said. "The card is just a number. The card account number looks up the online account with the customer data and finds what offers the customer has with a specific merchant. It's a stored value card for deals instead of money."

He said consumers can buy a card through a Smart Circle field representative or local retailer and then sign up for the program by phone or online. Their personal information is stored at the Smart Circle corporate data center. He said retailers cannot access any personal customer information, but can obtain redemption information by card number to reconcile with their POS transaction records.

"They can review numbers and have a way to understand what was redeemed and the frequency of certain customers," Cornelius said. "The consumer is our consumer and they can take offers from various merchants."

He said merchants can provide targeted offers to shoppers who opt in based on customer segment and profile.

James Tenser, principle of consulting firm VSN Strategies, said having several customer accounts on a single card is a natural extension of developments with value cards.

"It puts the customer in control of their profile so they can bring it to the shopping environment," Tenser said. "The shopper can [also] interact at home. It's an interesting idea."

He said it would be a good idea to place all consumer points on a single interface and layer the value. "For example, combine all airline frequent flier points to redeem for one reward," he said.

While Smart Card does not currently offer this functionality, Cornelius said it does allow customers to collect Smart Card points that can be redeemed at any retailer on the Smart Card network, as well as points that can be redeemed at specific retailers.

Tenser also said that shopper trackability holds the potential to provide great value to retailers.

"You can collect data points on the shopper and identify who's motivated," he said. "It's a potential gold mine for understanding how to promote and merchandise. Any time you have a Web-enabled process of accumulating data on a shopper, it could be part of a big value."

For Smart Circle, Tenser said it is important to build interactions with many retailers. "You're as good as your network," he said.

Overall, he said he sees promise in what Smart Card is doing. "The idea of a metacard linking a bunch of programs adding value to the consumer is interesting," he said. "I don't think we've seen the end of this."

Dan Berthiaume covers retail technology for eWEEK. More retail news, check out's Retail Site.