Are "Prewards" the Way to Snag Millennial Consumers?
Cutting coupons out of the Sunday mailer went out years ago, but the coupon is alive and well, just in a different form. A BusinessWeek article looks at the trend of "prewards," essentially coupons given with speciality debit cards. They seem to be one way of reaching Millennials, those kids aged 12 to 26 that have proven nortoriously difficult to market to.
It works like this. Facecard.com, a site run by Nashville agency Edo Interactive, users fill out of a profile (full of valuable demographic information) and sign up for a card that can be used as a prepaid Mastercard debit card. Kids (13 and older) can sign up for a card, while parents can load the card with a set amount of money. The company pitches the card as a way for young adults, particulalry college students, to learn how to handle plastic without getting into the minefield of credit cards. Retailers can then send "prewards" to targeted consumers -- a set amount of money on the Facecard that can only be spent at their store. From the BusinessWeek article:
When [sandwich shop] Jersey Mike's McDonald sent prewards to 300 high school seniors, his expectations weren't high, since 18- and 19-year-olds are notoriously nonresponsive. But the gamble yielded an "overwhelming" 17% return rate, he says, which is "way above" the numbers direct mailings produce. Moreover, it cost Jersey Mike's less than $150: $2 for each redeemed preward, plus a 5% processing fee.It's an interesting gambit on two fronts. The first, of course, is dressing the traditional structure of the coupon into a new media format. Even more facinating, however, is that because the payment is done using the Facecard, the metrics and targetting available to a marketer are finer than anything a newspaper could offer, and even more than direct mailing -- the targeted consumer, and only the targeted consumer, can take advantage of the offer.