Following a two-year development period, Encirq, a San Francisco-based online marketing services company, today launched Illuminated Statements, a proprietary desktop technology that allows for enhanced interaction between consumers' online credit card and checking statements, banks and merchants.
For marketers, the Java Applet technology, which doesn't require a separate plug-in or download, allows for targeted messaging, coupon delivery and advertising encoded directly onto the bank, securities and investment statements of individual users, according to Mark Vogel, CEO of Encirq.
For consumers, online statements are turned into interactive portals offering simplified expense reports and enhanced communication capabilities with merchants and banks.
"Traditional database marketing has been less than effective because the data acquired is really quite limited," said Vogel. "It ends up being that what you don't know about a customer is worth more than what you do know about them.
"If you went to Macy's Web site, Macy's has no way of knowing how loyal a customer you are or of providing you with a personalized page," said Vogel. "We can provide Macy's with a customized experience that is based directly on your transactional past with them."
For example, if you rented a car several times a year from Hertz, it probably would rate you as an important customer. In reality, you could also be renting from Avis twice as often, but Hertz would never know.
"We've started with credit-card statements because they are the richest source of information about what you buy and what your interests are," said Jay Dean, vice president of marketing at the 75-employee Encirq.
While service fees charged to consumers are largely dependent on their banks, Encirq's revenue model includes charging marketers rates starting at $100 CPM for each transaction line message.
In addition, advertisers are charged based on how narrow a scope and specific their targeting criteria is. Dean said it depends on how many "cuts" of a consumer's data a marketer wants.
For example, Mercedes would pay more if it was trying to reach one-in-10,000 customers compared to Safeway, which was trying to reach one-in-three. In turn, Encirq splits a percentage of the advertising revenue with the banks and merchants.
"In effect, merchants can monetize the value of their data," said Dean.
Dean said long-term applications include targeting cable TV and other networked environments with personalized advertising based upon consumer profiles.
Financial institutions can benefit by converting what was once thought of as a cost center into marketing opportunities at the heart of their customer's e-commerce activities.
Prior to a user opening a statement from a participating merchant online, the Encirq software parses all recent transactions into a database, categorizes them across multiple sources, and then runs inferential and predicted models on the data in real time to create an accurate consumer profile.
Regardless of the information or cross-references, the data is never accessible to anyone but the end-user, including Encirq.
"None of your information ever leaves your computer," said Dean. "Instead of taking your information and placing it with a third party, we are letting you keep it on your hard drive. We only supply you with the necessary analytical tools."
Future applications, available next year, include an Illuminated customer receipt option that highlights all transactions with a particular merchant. In addition, retailers will be able to create personalized Web sites based upon the buying habits of each consumer.
But doesn't allowing merchants to advertise to existing clients appear to be preaching to the choir?
Dean doesn't think so. He said advertisers can target any customers, including competitive customers. As a result, a regular Hertz customer would receive one ad, while consumers who switch between Hertz and Avis would receive another.
"Our technology allows our clients--the merchants, manufacturers and banks--to better dissect their customers, end-users and prospects without ever giving them direct access to the data," said Dean.
For one client, the Encirq technology provides a unique and interesting service that allows it to enhance customer relations and retention, according to Mary Carryer, vice chair at Honolulu-based Bank of Hawaii.
"When you are in the credit-card business, you issue cards to customers and then you have an 'acquiring' relationship with merchants who clear their transactions through you," said Carryer. "This [technology] is potentially a winning situation for both our merchants and customers."
While Bank of Hawaii hopes to add customers and merchants by utilizing Encirq's technology, it doesn't see any short-term cost reductions.
"Our costs are driven by running the credit-card business in a traditional way, which means statements are issued in a traditional way," said Carryer. "But now these statements can be enhanced without adding extra costs to us." n