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Kobie Marketing: Exclusive Insight on Cartera-Vesdia Merger

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Kobie Marketing: Exclusive Insight on Cartera-Vesdia Merger
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Editor’s note:

The recently announced merger of Cartera Commerce and Vesdia has sparked lots of conversation in the loyalty marketing business and there is more speculation than consensus at this point in time.

Loyalty Truth shared early thoughts here and we are more than pleased to be able to share insight from Michael F. Hemsey President of Kobie Marketing in this post. Michael’s thoughts are the property of Kobie Marketing and he has been kind to allow Loyalty Truth an exclusive on this post.

With all the recent press and advertisements announcing the merger of Cartera Commerce and Vesdia, I feel I’d be remiss if I didn’t join the discussion and provide some additional perspectives on this news. For reasons which you’ll likely surmise, I’m calling these musings “a grain of salt.”

First, as I have varying degrees of relationships and respect for many of the folks toiling within this newly formed organization, I say Congratulations! This merger has no doubt enriched many of the senior- and executive- and regular rank & file vice presidents we see listed on their merged “Leadership” page. (I think I counted 19 of them, this new company must be huge!)

This merger has, no doubt, provided some much needed breathing room from the Venture Capitalists and other Investors who insist on creating some version of a profitable company out of these two, formerly competitive entities.

[ Pop Quiz – Name that Film: “I love the smell of napalm in the morning.” ]

I’m a curious cat, hungry for knowledge, so I studied the advertisements and press releases touting the exciting news of the merger of Vesdia and Cartera. And I studied the posts and industry blogs and their opinions regarding the pros and cons of this merger. I’ve searched all the promising words from all the sources I could find in a quest for one, particular, viewpoint.

Alas, I have not yet been successful. Where, oh where, are the clients of these two companies touting the benefits of the merger? I’ve searched and I can’t yet find any who have taken the time to share their thoughts on behalf of Cartera or Vesdia. Perhaps it’s too soon? Perhaps they weren’t consulted?

Regardless, when it comes to change management and announcements of this magnitude, I think the client viewpoint is not only important, it’s frankly the only viewpoint worth reading. Can the clients explain the benefits of these new teammates having to battle it out for resource – and platform – supremacy? Can they explain the benefits of one, unified platform? Will they have to convert and is there a cost to conversion? Are there proven benefits to that cost? What happened to their account teams? To their ability to get things done? Better? Worse?

Neither here, nor there?

So, yes, those questions come to mind, and without the voice of the customer, some other questions come to mind. If these companies were thriving, would they have merged? If it’s true they’ve been on the block for years, how focused have their management teams been on their client’s needs? Have they delivered on their promises? Mergers are sometimes inevitable – more so when the more traditional business model of Revenues, management of salaries and expenses against those Revenues, and an insistence on glorious EBITDA and Profits isn’t exactly working out.

[ This just in: The former CIO of Vesdia (now listed as a VP of Technology) has announced on his LinkedIn page that he’s looking for a new opportunity, in 4 to 5 months. What does that mean for those clients on his platform? Hmmmmm. ]

Yes, mergers can be a good thing because running a business can be far more difficult when Payroll is funded by venture capital, versus profits from a strong business model. So one conclusion is: they needed to merge, to show accretive value to their investors. And by extension, their clients will experience employee turnover, a bit of technical chaos, competing resources, and maybe even loss of throughput because the larger entity is no longer efficient.

In the interest of full disclosure, Kobie provides its own merchant funded platform, and has partnered with Mall Networks, (and I suppose we now partner with Vesdia by extension), and we have partnered with Free Cause, and others, because we make it our mission at Kobie to constantly scour the marketplace for innovation for our clients. And while we believe in the merchant funded model, we’ve always believed it’s only a (relatively) small piece of the customer loyalty and rewards pie. And rarely is it a differentiating piece of the customer experience.

For our techie friends out there, do you remember when font software was sold separately in the ’80s and early ’90s, until Windows and Apple integrated them into the operating system level? Perhaps, this merger represents part of the definitive statement that ‘merchant funded rewards’ are more of a feature to be absorbed into larger offerings that have similar, or superior, data aggregation and reporting functionalities. When the history books are written on this business model, maybe it will be more accurately perceived as an “outer ring of Saturn” rather than an independent, viable offering.

There is always a way through the woods, and smart management teams figure it out. And so I muse on the continued need for responsiveness, a focus on the customer experience, delivered innovation, and reporting to show profitability and incrementality. Whatever the status of the players and the platform, I offer encouragement that this newly formed organization will do what they say they’re going to do. And I’m hopeful, in the interest of competition – and the fond relationships I have with many of their team – they will find common ground and create momentum for their clients.

But it is a very competitive marketplace, and patience isn’t always in great supply when the changes we enact don’t further the cause of the customer.



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Happy Birthday Plenti

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