In the beginning, there were punchcards. Since then, man has created magnetic stripe and bar code cards, smart cards, java rings, and RFID cards. Technology has evolved greatly over the past 25 years, and loyalty sponsors and providers are still seeking the silver bullet of delivery devices.

While we’re busy debating which technology will win out, I wonder if The KeyRing Thing will make a good bridge to the future?

My friend and Loyalty Truth contributing author Jim Kuschill wrote a great article for Colloquy entitled a ”World Without Cards” in which he weighed the pros and cons of whether we needed cards at all. If we’ve learned anything over the past decade or so, it is that the technology or device used as a membership card is the not the sweet-spot of the value chain.

The right strategy, targeting, and value proposition are the keys to engaging consumers in loyalty programs. Get that right, and you could get away with giving members something akin to a gas station bathroom key (the small key attached to a large wooden dowel), and they would carry it.

Admittedly an exaggeration, I hope you understand the point. Sometimes the sexiest technology, after thorough vetting, is revealed to be not much more than a ”solution looking for a problem to solve“.  Jim Kuschill and I debated the added value of smart cards to loyalty program execution for literally years and, in the end, we agreed that it wasn’t the smart card that would make the difference.

What we did learn from our debate was put to the test as we worked with card issuers in Latin America and Europe as they introduced EMV standard chip cards into their markets. The lesson: it was the synergy of technology and circumstances that made the difference.

With many Latin American banks owning a strong acquiring business, we were able to recruit merchants to support POS bonusing and point redemption at POS to pay for purchases. It was this combination of factors that helped us migrate traditional points programs from magnetic stripe to EMV cards and we allowed the smart card to grab most of the glory.

After lots of debate over technology, I appreciate a return to simplicity. That’s why I find a particular brilliance in the Key Ring Thing, highlighted by Good Morning America as part of their coverage of the “best” discount shopping cards. In the GMA piece, Shop Smart Magazine Editor Lisa Lee Freeman profiled the device as she also highlighted her favorite discount cards found on Shortcuts.com.

When I opened my morning newspaper and read another profile of this device, I had to spread the word. The Fort Lauderdale Sun Sentinel chronicled how for $3.97, you can get yourself a high quality PVC card that holds 5 or 6 barcodes of your favorite rewards program. Through the web interface, consumers can select from popular programs or load their own if it does not appear in the list.

Apps to aggregate loyalty cards don’t end there, as My CardStar allows consumers to catalogue their favorites on their iPhone, Blackberry, or Android and JustOneClubCard.com, created by Gregory Pinero, serves as a more casual hobby site for the same purpose.

I like the idea of turning my night-watchman style keychain into something more sleek courtesy of the KeyRing Thing. I like even better having a “wallet” to store all my favorites on my iPhone, though I wonder how many bar code readers are enabled to read from the iPhone screen (an acceptance issue needs to be resolved).

In the end, it just might be that the highest purpose of “high tech” will be to deliver caveman-like simplicity to consumers. For today, the KeyRing Thing delivers on that count.

For tomorrow, who knows? It might even be that the Poken Girl has the answer….

Whether you love technology or struggle to keep up with it, you have to admire how new developments push our limits. The limits I’m talking about are our imagination, our time, and our comfort zone.

Last year’s debate over the use of RFID (Radio Frequency Identification) is quickly giving way to a new battle front, “Neuromarketing“. While RFID devices were challenged by well organized consumer privacy groups such as Caspian for basic breaches of privacy, the revelations of of Neuromarketing seem capable of creating Supreme Court worthy debates.

Neuromarketing was profiled this week on CBS’s 60 Minutes and is explained as a technology that employs a specialized use of MRI scanning called “functional MRI,” fMRI for short.  In layman’s terms, its proponents are touting that we will soon be able to see what is going on inside the brain and decipher what people are thinking.

RFID has been used by Walmart, the US Military and many others to bring efficiency to the supply chain and dollars to the bottom line. Contactless cards were introduced a few years ago in the US and misunderstanding of the technology’s limits has caused some consumers to buy wallets and purses that block signal transmission and others to simply panic that we are all marching headlong into an Orwellian future. The technology does have some risk, though rarely as it is portrayed by the media and consumer protection groups.

Neuromarketing carries a higher sniff test for risk just by virtue of the way it’s advocates describe it. Neuroscientist Marcel Just painted the benefits of the technology as “thought identification” on the 60 minutes segment and one of the leading companies in the industry, Neurosense, stated it has  plenty of clients including “Unilever, Intel, McDonald’s, Proctor & Gamble, MTV or Viacom.” As there are purportedly about 92 neuromarketing agencies worldwide, it’s clear that a lot of resources are being applied to advance the cause.

Each of these technologies has application outside of consumer marketing and maybe that is just where they belong.The question in my mind is how the technology is put into practice in a sensible way that consumers will accept. I can understand that reading minds could be useful to validate live survey responses and focus group chatter. I can also see that a retailer could hone its inventory management by reading the thoughts of consumers passing by a display window with dresses in 3 colors and learning that the green model was most popular.

What I don’t envision is that consumers will accept their thoughts being translated into real-time store promotions or something similar. No matter how “relevant”, having a sales associate in the Apple store walk up and offer an unsolicited suggestion for  the best case for your new iPhone strikes me as just plain creepy.

We’ve been down this road before with chip cards and RFID enabled devices. The premise that personalized service or personal shoppers could be anonymously triggered as the RFID-enabled loyalty card of a “best” customer passed the scanner at the store entrance was not appealing to any survey or focus group respondent I have ever encountered.

The only possible scenario that I consider practical is using a mobile device to opt-in or invite current promotions to be pushed to me before I entered a particular store. Let’s say I am ready to visit Nordstrom and am sitting in the food court having some coffee. If I could open the mobile marketing application on my iPhone listing all of my loyalty program memberships, select Nordstrom and click on “today’s deals”, I would be happy to have specific offers and specials sent to my mobile phone. I could also opt-in to “personal shopper” and, if I qualified in the loyalty program, I would trigger that service upon entering the store (GPS enabled phone, right?).

The debate will rage on and next year the argument may be substantially the same with a different device or technology filling in the blank occupied last year by RFID and today by Neuromarketing. If we keep in mind that business is driven by pleasing the customer and not about advancing a particular technology, then we will have an easier time choosing the path to success.

Between the two political parties, the Democrats win the propeller-head award. In addition to their sophisticated use of social media to build a volunteer army and raise funds, they distributed a commemorative badge at their August convention that doubled as a prepaid card.

Using an RFID based technology known as GO-Tag and marketed by First Data Corp., each badge came loaded with $10 and was accepted for payment at over 100 POS terminals throughout the convention venue. Reports cited that the small buttons were distributed to over 5,000 journalists and delegates who happily tapped them at concession stands throughout Denver’s Pepsi Center to get free drinks and snacks.

The use of the cashless payment devices was covered by Business Week in their August 28, 2008 issue with the title “Go-Tags May Replace Cash and Credit Cards”. Reading the headline, I instantly blurted out “I need a new publicist” to anyone in my office who would listen. Similar payment devices and form factors have been around for over 10 years and I have been writing about them for nearly that long. I am surprised that a publication the stature of Business Week could be duped into giving a tired concept this much attention.

I can remember wearing a Java enabled ring from Sun Microsystems and paying for refreshments at a concession stand in 1998 at a CardTech SecurTech conference. For the next several years I worked on a number of smart card projects trying to transform the technology into a difference maker for loyalty marketing programs.

Chris Hughes, one of the founders of Facebook is quoted as saying “You can have the best technology in the world……but if you don’t have a community who wants to use it and who are excited about it, then it has no purpose.”

After many trials and pilots, mostly in Latin America, the consensus of people on the front lines was that smart cards were cool, but not powerful enough alone to improve the performance of a loyalty program. In addition, the Achilles heel of the technology was the need to invest heavily in new card acceptance devices at POS to read the smart cards. Producers of smart cards retrenched and have since found success in closed loop environments such as campus and large corporate settings.

The application of the Go-Tag by the Democratic party was perfect, however a cautionary note to Business Week is in order. If Go-Tags are to replace cash and credit cards anytime soon, a huge investment in POS infrastructure across North America will need to occur. I’ll cover this in full detail another time, but the slow ramp-up of contactless cards in the US despite heavy subsidization by major card issuers and associations supports this view.

The Business Week article highlighted that with GO-Tag, First Data is “placing a major bet on the fast-emerging world of mobile e-commerce”. To make these bets pay off, all constituents of the technology must realize benefits. In this case, the stakeholders are card issuers, retailers, and consumers.

Linda Gridley, President of Gridley & Co., a mergers and acquisitions advisory firm in New York voiced her doubts on behalf of the card issuers. “I’m all for innovation, but it’s tough when your customers don’t have the money to pay for it,” she stated.

Consumer demand is also in question. One would think that members of Generation Y (Millennials) would be twittering over this technology, and some industry pundits who used to beat the smart card drum are now postulating that the mobile phone will become the new uber-payment device. According to a recent study by Javelin research, this is not the case as “only 15% want to use a mobile device as means of payment.”

Retailers are the hardest to convince as changes to POS are viewed as peripheral to the core business. Try to change their minds and you either have to deliver a killer application or pay to put the device on the counter.

Before I start sounding like a member of the “grumpy old man club”, I want to emphasize that I applaud the use of the Go-Tag product in the convention environment. It was the right application of the technology, saved people time, and probably made the convention even more memorable for souvenir hunting delegates.

As for Business Week, before they decide to write about the next new payment technology coming to market, I wish they would give me a call. Please send your suggestions for a good PR person in response to this post.

…….. Bill Hanifin