Coupons were invented in 1888 by Coca Cola, and they haven’t changed much since then. That simple contract, a tiny slip of paper with the promise of an offer and the sense of urgency prompted by an expiration date has proven to have extraordinary longevity.

“Coupons are here to stay,” says Aron Ezra, CEO of OfferCraft. “People love getting a deal. But the way coupons work — and even what a ‘coupon’ is — well, that is about to change.”

When they launched OfferCraft, Ezra and his team set about reinventing the coupon for the 21st century digital consumer. Their patent-pending software enhances coupons and other marketing incentives in two primary ways. First, OfferCraft uses gamification to make the process of receiving an offer far more fun and memorable; and second, the company transforms static coupons into tiny software programs that can continually alter themselves even after being distributed to become ever-more appealing to the consumer.

“It’s the next step in the evolution of offers,” says Ezra. “We help businesses give out marketing incentives that don’t really feel like coupons. They feel more like winning a genuinely cool reward. The result is that we drive redemption and conversion rates way up.”

As an example, imagine a hotel that wants to get more people to upgrade their room or join the loyalty program. The hotel could offer a game upon check-in where anyone who joins the loyalty program or pays for a room upgrade can play the game to win their room stay for free. Some guests do win the big reward, but most win smaller alternative rewards, like discounts off future stays or rebates on ancillary services like meals at the hotel restaurant or treatments at the spa. Winning the coupon as opposed to just being given it, makes patrons feel as though they’ve earned it — the coupon feels more like a prize. And if a guest doesn’t like what they’ve won, that guest can swap their prize for something else or give it as a gift to a friend.

The Las Vegas-based startup has operations throughout the United States and across the world. And now, thanks to a partnership with Niagara Falls-based Rev Publishing Inc., OfferCraft is coming to Canada.

Rev Publishing Inc. C.E.O Daniel Pasco notes, “2016 marks 15 years for Rev Publishing, and since its inception, there has been a steady incline of consistent growth. We have a well-established portfolio of over 10,000 clients within Canada and the United States, and we are always looking to make effective use of  their advertising budgets to effectively incorporate current trends in digital marketing. We saw a great opportunity in OfferCraft’s gaming software to meet these growing needs. This partnership is mutually beneficial as it utilizes OfferCraft’s technology with Rev’s sales engine.”

Today Magazine sat down with Aron and Daniel to talk about the reasons for partnering, the psychology of motivation, and the digital reinvention of the old-fashioned coupon.

Q: What is OfferCraft?

Aron Ezra (AE): OfferCraft is essentially a “motivation engine”. Our clients use our platform to infuse game dynamics and more intelligent coupons and rewards into their marketing programs. This effectively motivates their target audiences to do the things they want them to do.

OfferCraft’s patent-pending behavior-modification tools leverage a deep understanding of human psychology, game theory and data analysis to transform traditional incentives into more fun, memorable and motivating experiences. The result is that an offer that was previously only redeemed, say, 5% of the time, suddenly becomes far more compelling when presented using our tools. It’s not uncommon for us to double or even triple redemption rates compared to the baseline. This represents a massive revenue opportunity for our clients as they get far more ROI on an identical marketing spend.

Our platform weaves together features ranging from innovative game-building tools for marketers, to next-generation loyalty and couponing solutions, to sophisticated learning algorithms and a lot more.

Q: What made you realize there was a need for motivation software?

AE: Depending on what study and expert estimate you believe, the average person sees from a few hundred to a few thousand ad messages each day. Think about that for a moment — that’s almost inconceivable. Yet the vast majority of those offers are ignored. In some industries, 99% of their marketing is ignored. Our team wanted to figure out how to improve those numbers.

And that’s what we’ve achieved. Now you may think, well, what’s the big deal? So you took a 3% redemption rate to 6%. Why should anyone care?

Those percentages translate into very big money. Billions of dollars a year are spent on coupons and marketing offers. When we help a company double its conversion rate, we’ve effectively just doubled their entire marketing budget. OfferCraft isn’t terribly expensive, so for a company that spends many thousands or millions of dollars on marketing, doubling their marketing budget is a pretty massive win.

Daniel Pasco (DP): The question isn’t if people love coupons, but how to get them to use the coupons over the multitude of other offers they encounter everyday. This marketing software engages customers in a fun and memorable way while offering discounts and coupons that they want. Digital game inspired coupons lead to higher redemption rates, especially as more and more people continue to adapt to the Internet and mobile platforms.

Q: How much psychological research went into developing the OfferCraft platform?

AE: Quite a bit. OfferCraft was heavily influenced by clinical and academic research from behavioral economics, decision-making research, and cognitive psychology. Based on much of the great academic work in those fields, we realized that we actually could scientifically improve upon the effectiveness of offers.

Human beings have a lot of odd little quirks in the way we think. That translates into interesting dinner parties, but it also means that we can construct offers that harness those quirks to become more compelling. For instance, take a phenomenon called “loss aversion.”  In behavioral economics and decision theory, loss aversion refers to how we’re hardwired to have a much stronger emotional reaction to losses than we do to gains. Studies suggest that loss can be twice as powerful, psychologically, as a win.

So one of our many advanced coupon enhancements allow businesses to give out offers that actually decline in value over time — sometimes very quickly. This increases the customer’s urgency to redeem it.

Q: So what should a good marketing offer say?

AE: You brought up one of the really interesting things we’ve learned: So much time and effort is spent on optimizing what offer to make, but it’s arguably more important to figure out how to give out that offer.  For example, let’s say you wanted to give customers $10 off their next purchase. That’s all your marketing budget will allow you to give. That coupon will have drastically different redemption rates depending on how you distribute it. Imagine two scenarios here:

In the first scenario, a bored cashier hands you a receipt and mumbles something about a $10 coupon at the bottom of your receipt. Some people will look at it and use it, some will shove it in their purse or wallet only to forget about it later, and most will throw it away without a glance.

In the second scenario, the customer gets to play a game to win the $10 coupon. The research and our own experience have repeatedly found that people respond much better to things they earn rather than things they are given for free. They’re more likely to remember it, more likely to value it, and more likely to come back and redeem it. You’ll see higher redemption rates and ROI from the $10 gamified offer versus the one from the bored cashier.

DP: OfferCraft is an opportunity that almost any business, big or small, can utilize. I see everyone using it from the small pizzeria that wants to maximize their return business, all the way to retail chains or shopping plazas that want to increase their traffic and maximize customer loyalty. Sometimes it’s not a question of whether a customer will buy pizza or a new shirt, it’s about whether customers will buy those things again…from you. Today’s market has never been more competitive and we want our clients to be at their peak, and this is a helpful tool to allow our clients to achieve this.

Q: How do you know OfferCraft really works?

AE: We are constantly testing our offers and and incentives against control groups (another group of people who get an incentive that doesn’t go through the OfferCraft platform). We always do better.

Q: Where are the most common places where you add your games?

AE: In emails, on websites and apps, in social media, in advertising, in training materials, and at the point of sale.

Q: What types of organizations do you work with?

DP: I see OfferCraft Canada being used in several businesses in Niagara and beyond, in sectors such as hospitality, travel, entertainment, health care, education, gaming and more.

AE: Since our clients span quite a few industries, we have helped motivate people to do everything from making a reservation, to taking their medicine on time, to spending more, to filling out a survey, to switching to solar, to joining a loyalty program, to doing homework, to donating money, and much more.

Q: What has the response been from your clients?

AE: Outstanding. The technology works. We make their offers more effective and more profitable.

Q: How might a tourism-based company, which may not have many return clients, use the technology?

AE: In countless ways. They primarily use OfferCraft to inspire customers to buy more, write reviews, tell their friends to come, post on social media, and so on.

Q: Can you explain the structure and support that you provide to your clients?

AE: We offer comprehensive support, training, and advice to all of our clients. Our customers can choose to have us manage everything  for them, or they can get very involved and manage everything themselves. Either way, we’re there to make our clients successful.

Q: What led OfferCraft to partner with Rev Publishing?

AE: We have a lot of respect for Rev and the work they’ve done all across Canada. We were looking for a partner north of the border that had a track record of building strong customer relationships, a great team, and a culture of innovation. We interviewed a lot of companies, but when I talked to Dan and the team at Rev, I knew we had found our partner.

DP: This partnership is a win-win for both companies. We want to offer our clients a platform to engage their customers in a way that they will respond to positively. With this partnership, we hope to fill this growing need for innovative digital marketing strategies that are both cost effective and beneficial. Our primary goal is always the success of our clients.

Q: How is the partnership going to work?

AE: Rev is essentially going to become OfferCraft’s Canadian Headquarters. All new Canadian business inquiries will go directly to the Rev team, and they will utilize the OfferCraft software platform to service our new Canadian customers.

Q: How could companies learn more about what you could do for them?

AE: Take a look at our website: www.offercraft.com.  We’ve got a great short overview video there, and plenty more info. You can also request a demo of the platform from our team on the website.

DP: Once a company decides that they are interested, they can give us a call, and our team would be happy to customize a marketing strategy that will work for them.

To learn more about OfferCraft Canada, please contact Rev Publishing at 905-356-7283.