Scott Kluth, founder and CEO of CouponCabin.com, says he’s never been able to provide an effective way for merchants to track when shoppers redeem online coupons in physical stores—until now, with a new service from Yub Inc. that uses credit card networks to track coupon redemption.
“We love that Yub takes the physical coupon out of the mix,” he says. “For us it’s a way to monetize offline transactions.”
CouponCabin, which Kluth launched 10 years ago, displays online coupons from retailers and consumer brands including Gap Inc., J. Crew, Overstock.com Inc. and Victoria’s Secret. Gap is No. 19 in the Internet Retailer Top 500. Victoria’s Secret is No. 21, Overstock No. 31 and J. Crew No. 56. When a consumer clicks a coupon on CouponCabin.com for such offers as a 20% price discount or free shipping and redeems it on a retailer’s e-commerce site, CouponCabin uses a link to the merchant site to earn a commission based on the final purchase price.
But when CouponCabin offers coupons for in-store purchases consumers typically print them out on paper, and CouponCabin has no way to claim credit when the shopper uses the offer in a store. Instead of earning a commission on in-store coupon redemptions, Kluth says he charges either a flat fee to display the store coupons on CouponCabin.com or charges the client merchant a higher commission on coupons redeemed online.
The ability to charge a direct commission for online coupons redeemed in stores, however, enables CouponCabin to earn more revenue per transaction while also developing broader advertising relationships by letting multichannel merchants track the effectiveness of online coupons redeemed in stores, Kluth says.
Kluth notes that prior efforts by marketing technology companies to track paper coupons back to online sources have been ineffective because of the difficulty in extending coupon bar codes to include information on where a shopper got a coupon, such as on CouponCabin or on another affiliate marketing site, and then integrating that information with store point-of-sale systems.
Yub changes all that, he adds, by using credit card networks to track how consumers acquire and use online coupons. Alex Rampell, co-founder and CEO of Yub, says his company has built connections with all the major credit card companies, including Visa Inc., MasterCard International and American Express Co. When a consumer signs up on CouponCabin.com or on another affiliate marketing site to receive an in-store coupon—say, for a 20% price discount from Gap—she enters her e-mail address and credit card number, then receives an e-mail confirmation from Yub that her coupon is ready to use. When she goes to buy something in a Gap store, she uses the same credit card to complete the purchase and receive the 20% discount.
Yub notifies the affiliate site that displayed the coupon that the coupon was redeemed; the affiliate site then receives its commission from the merchant. Yub also receives from merchants a percentage of each completed transaction. Rampell notes that the commission charged to merchants varies by a retailer’s average order value, and that an average order value of $200 would have a commission of about 8%.
Yub was spun off last month as a separate company from TrialPay Inc., an online marketing and payment services company also founded and led by Rampell. Yub has received $12 million in funding from investments firms including Atomico, Battery Ventures, DAG Ventures, DFJ Growth, Greylock Partners, Index Ventures, T. Rowe Price and QuestMark Partners. Investors also include Visa Inc.
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