Impower Acquires Online/Offline Loyalty Player

In a deal aimed at boosting Impower’s ability to help clients acquire and keep customers, the email marketing division of American List Council has acquired Datamark Technologies, a provider of electronic gift cards and customer loyalty programs.

Financial terms of the deal were not disclosed. Both companies are privately held. Jack Kaplan, president of Datamark, will continue to run the division, which will keep its name. The acquired company’s staff will move from North Brunswick, N.J., to Impower’s headquarters in Princeton, N.J.

“The Internet has had a profound impact on the way we do business. But more than anything, it has turned us into a society of comparison shoppers, making it incredibly easy for every customer to be a low-cost buyer. The unintended consequence is a decrease in lifetime customer value for many merchants,” said Donn Rappaport, Impower’s chairman and chief executive officer. “With the various Datamark products, we can enable our marketing partners to do a better job of turning one-time buyers into long-term repeat customers, and thereby maximizing their lifetime value.”

Datamark Technologies’ products include magnetic-striped plastic gift cards that store value — so-called “smart cards” — that consumers use in place of a gift certificate. Redeeming the electronic gift card involves swiping it through the magnetic card reader at the register. Datamark is able to collect information as this happens — checking and reducing the balance on the card by the appropriate amount; and noting what was purchased with the card.

Gift cards, of course, are traditionally an important way of introducing potential new customers to a company’s offerings. The trick is to keep them coming back. Datamark addresses this by incorporating the ability to turn the gift card into a loyalty card, which the customer can use to gather “points” or get discounts in future. Its technology can be used to print out offers or information — a discount if the customer returns, for example — on the register receipt.

This is Impower’s first acquisition, which, importantly, allows it to extend its reach into bricks-and-mortar retail outlets. This ability — to connect online marketing activities with offline purchasing behavior — has been something of a holy grail for Internet marketers.

Because of the way the Datamark technology works, the newly-merged company could offer discounts via email marketing campaigns which could — when the customer enters in her card number — be “stored” on the card and redeemed in the store. Because it tracks data down to the SKU level, the system would even allow Impower’s clients to offer, say, a 20 percent discount on the purchase of a coat and a 10 percent discount on a pair of shoes. The challenge in realizing this type of online/offline effort would be to connect a person’s email address to a card. The company is considering mailing out cards to consumers who sign up online to receive a discount.

Impower’s clients include Neiman Marcus, Office Depot, American Express, Dell, and Barnesandnoble.com. Datamark brings to the table clients like J. Crew, Brooks Brothers, Ruth’s Chris Steak House, and Montgomery Ward.

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