• by Steve Smith , Staff Writer @popeyesm, March 28, 2008

We often talk about consumers being "in control," but we rarely see instances of consumers actually at the controls. When a user gets an offer within the site walls at LeverageCard.com, she can tap a button for an explanation of why she was targeted (because of demographics, psychographics, etc. in her profile) and even tell the site how important this brand and product category are to her. Jennifer Mathe, COO and founder, Leverage Inc., calls it "transparent targeting." Her site works with retailers and lets consumers manage their retail gift cards, swap them with others, and monitor their loyalty programs. The site takes all of the profile and behavioral information these relationships produce and packages lead generation programs for sponsors. As she tells us here, the idea is to reduce lead-gen cost by combining behavioral targeting and profiling with user self-filtering.

Behavioral Insider: How is Leverage coming at the usual advertising model differently?

Mathe: We came at it from the frustration of consumers with the retail experience generally and the proliferation of advertising in gift card and loyalty program in general. The channels for advertising and marketing messages seemed inappropriate. When you are watching TV or surfing the Web, rarely is your intention to be advertised to. Messages are intended to interrupt your pursuit as a person and attempt to convert you into a consumer at that moment. But we thought people do want to get advertising when they are in the act of shopping. We wanted to create a channel that was truly non-interruptive and provide consumers with the exact messaging they wanted at the exact right time.

BI: But you also tell a target why a sponsor is talking to them?

Mathe: There is a lack of transparency about why we receive communications and why we have been selected by a retailer to get any type of message. At Leverage, any message you receive through Leverage will tell you exactly why you are getting it. It removes the mystery around that communication. We took it one step further and said, why not let the consumers respond to those reasons.

BI: What sort of data points are you working with, beyond the basics?

Mathe: We also know which gift cards people hold, which they want to hold, because they may make a request to swap a gift card for another. We know what loyalty programs they belong to. And we built out a robust profile that captures more psychographic information. We never reveal personally identifiable information, but then we have a pool of consumers we can present to retailers and ask what their wish list of consumers would be? We signed a large steak house chain that wanted people who eat steak. The best they have been able to target was men and some age range targeting, but they haven't had a lot of success. But part of our profile is restaurant preferences, and one of them is steak houses. They were flabbergasted because it creates for them a ready audience of people they know are already interested in their product. And they can have a different kind of dialogue with that person.

BI: What is the nature of the data capture?

Mathe: Entirely on our site. A user registers for the service and can register gift cards so we track the balances for them. They collect interest on their balances. They can swap their gift card for free with other members. If you have a Gap gift card, wouldn't it make sense that you would want to make that gift card more valuable by having an offer from Gap for 10% off the next purchase? In loyalty programs, we work with American Airlines, so they can reach members or those who hold a gift card, and also folks indicated in their profile they are frequent travelers or want to see the world. The retailers can really look at all that information we gather that consumers provide in the context of getting other benefits from the Leverage service. And then we wrap all that information together, repurpose it as almost a research package for the retailers.


BI: How are some of the data collected on gift card behavior translated into actionable marketing strategies?
 
Mathe: When people have preexisting strong brand affinities they tend to spend down their gift card quickly. People with a lukewarm relationship with a brand let a card stagnate in their wallet or they instantly register to swap those cards. They have little motivation to interact with your brand. Perhaps you may want to provide a special incentive or communication to entice that consumer and get them to have a brand experience, and ask for feedback.

BI: And what sort of control do the users then get over the targeting?

Mathe: You can review why the offer was presented to you. The volume control sliders directly impact whether you will receive offers in the future from that retailer or from that particular category. And then the back end of our system is designed to learn from every single activity you take on our site. And it learns from that and it does a better job next time in honing the kinds of offers you get. For now we have built the two volume control dials going from one to ten. The default setting is five. If you dial a retailer down to one, the odds in our relevance ranking of you receiving another offer from that retailer falls pretty much to nil. So if a big box retailer in consumer electronics is not your brand of choice, you can dial up consumer electronics and turn down communication levels from that retailer. We will go out and draw communications from other retailers in the category. And we do have some other controls to build out in the future, but we were concerned about control overload so we are trying to be incremental. People are actually having fun with the controls, because for the first time they feel like they are in control. Hopefully, we will convert that novelty into something that consumers will come to expect in their relationships with brands.

BI: Any deeper learnings about how these consumers want to be marketed to?

Mathe: Consumers say they would like to see the ads be even more targeted. The average consumer is being populated with between ten and twenty different advertisements because we have so many campaigns in the system right now. They would like to see five, or fewer than ten. It will make me feel more like I am getting offers that are personally tailored. That is the feedback we had hoped for because that is what we felt we wanted to give to retailers but were never able to do.
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