BuyWithMe Attempts to Link Daily Deals to Customer Loyalty

One of the biggest unknowns in the daily deals business is figuring out the lifetime value of an offer for a merchant.

Does it bring in new customers? And will they ever come back?

Certainly the giants in the industry, like Groupon and LivingSocial, will have to grapple with these problems, but for now, it appears that the smaller players in the space are being more vocal about how to close the loop.

New York-based BuyWithMe is announcing today that it is rolling out card-linked offers to some of its merchants. By doing so, merchants will have the ability to track the success of a promotion and reward loyal customers who return to their stores after redeeming the initial vouchers.

San Francisco-based Bloomspot also talks about the concept of rewarding consumers who spend more or return to the merchant after the deal is sold.

The card-linked offer space is not new.

It is similar to the way your credit card company offers you discounts on rental cars or hotel rooms. But now many companies are trying to open it up as a third-party ad network, which will be able to create discounts and offers that are tailored for individuals based on their actual spending habits.

In the same way, BuyWithMe hopes to be able to give its merchants access to aggregated information that will allow them to track the success of the promotion.

For instance, BuyWithMe says merchants will now be able to get answers to key questions: Did customers spend more than the value of the voucher at redemption? Did customers return to make repeat purchases? How much did the average customer spend? What is the most popular day of the week to redeem the voucher? And what is the average lifetime value of a customer?

BuyWithMe says the information is gathered in aggregate, so that a consumer’s privacy is not violated. Additionally, consumers will have to opt into the program and will be able to opt out at any time.

Presumably, consumers will be motivated to sign up if they continue to receive offers that they find valuable.

In a statement, BuyWithMe’s CEO Jim Crowley said, “We have long maintained that the success of BuyWithMe is dependent on the satisfaction of our merchant partners. Our commitment is to help them build a better business and establish long-term customer relationships by offering specific data and insight into the success of their customer acquisition and loyalty campaigns.”

The product, which BuyWithMe is calling MerchantConnect, is launching this month in Boston, New York City, Los Angeles and Washington, D.C., and will be rolling out nationally later this fall.

Photo Credit: Images_of_money.