The Difference Between Closed-Affiliate and Open Verification: Why It Matters for Your Brand

Marketing to specific communities is a growing, successful strategy for leading brands around the world. Spotify uses it to engage college students. Walmart provides access to Walmart+ for the low-income community. T-mobile has a special plan for military families. 

Across industries, and geographies, brands are winning consumer communities by offering them exclusive promotions and experiences, and then verifying eligibility for the offer when a customer redeems it. Research shows consumers in these groups feel valued and appreciated when brands recognize their community group, which drives engagement and loyalty in a crowded media landscape. 

But there is a problem emerging. 

A majority of community verification providers are using a common play of consumer marketing platforms — collect consumer data behind a verification login and resell it to the highest bidder. Except their approach is more predatory. These providers generate traffic off the backs of their brand partners and resell the data to other brands, even their partners’ competitors. 

We believe that’s wrong. Not only does the “closed-affiliate” approach hurt brands, but it’s also bad for consumers because they don’t have a say in where their data winds up or how it’s used.

That’s why we take a different approach. 

Unlike closed verification providers, we don’t require consumers who want these exclusive offers to “sign up” with a closed member network because we don’t operate any networks. Instead, consumers verify their eligibility as a seamless step in the brand’s purchase process through our white-label verification experience on the brand’s website, mobile app or in-store experience. We call this process “open verification” because it enables consumers to have an immediate and direct relationship with the brand instead of the verification provider.

The Difference Between Closed-Affiliate Verification and Open Verification

When a brand verifies customers through a closed-affiliate provider like ID.me or StudentBeans, the customer must leave the brand’s purchase process and create a separate account with the verification provider. The brand may get an initial sale, but from that point forward, the closed-affiliate verification provider owns and manages all of the first-party data the consumer provides – which is far more valuable than a one-time purchase. 

In contrast, the SheerID Open Verification Platform verifies customers through a seamless step in the brand’s purchase process that occurs instantly and entirely within the brand experience. The consumer knows who they’re sharing their data with, and the brand alone owns the data management and controls how it’s used. The brand has the power to re-engage the customer and nurture their loyalty through marketing exchanges the customer has consciously welcomed. 

Why Does This Matter? Because First-Party Data is Currency

The old adage “follow the money” applies here. First-party data has tremendous value because a customer willingly and directly shares it. Affiliate verification providers take a closed approach because they know they can make even more money by selling that data to companies that are hungry for it. 

Closed verification robs brands of revenue because it keeps them from using their customer data to increase their customer lifetime value. And it robs consumers of their right to have their data used in ways that will bring them value.

Closed verification is a predatory practice that benefits only the companies who provide it. 

Three Key Factors for Using Gated Offers to Build Long-Term Customer Relationships

As every marketer knows, brand loyalty drives repeat purchases. Because every customer has value beyond the initial transaction, open verification ensures brands have multiple opportunities to engage with that customer over time. Here are three ways SheerID helps brands make the most of it.

1. You own the customer experience. Unlike closed affiliate verification providers, the SheerID Open Verification Platform provides a white-label experience that reflects your brand, not ours. This makes a clear brand impression with consumers.  No need to create a 3rd party vendor account before a consumer purchases. You can place your offer anywhere within the shopping process – on your website before checkout, in the checkout process or even after they’ve enrolled in your loyalty program. And with SheerID InStore, you can enable sign-ups and redemptions at brick-and-mortar retail locations as well.

    

2. You own the customer data and relationship. When you relinquish control of your customer data to a closed verification provider, you have no way of knowing where and how it will be used. Customers don’t either and may hold your brand accountable for any spam or breaches of trust that result.
   
   As an open verification provider, at SheerID we give you our pledge that all of the verified customer data that goes through our service is the property of your brand – after all, it’s your customers’ first-party data. We never resell the data, and your customers don’t become targets of another brand’s marketing. Because our open verification system is built to empower marketers, we also have more than 400 Data Connectors that allow you to stream first-party customer data to most major marketing solutions – empowering you to use data to support your customers.

    

3. You own your marketing. When you create offers for communities, it fosters a powerful emotional connection between your brand and customers who identify with that group. If you use a closed platform, like ID.me or Student Beans, any marketing they do on your behalf will reach only the small subset of the community who has created an account with them. And that subset won’t include all the people who decided not to join the affiliate’s network so they could avoid being added to yet another list.

   With an open provider like SheerID, you own the experience, you own the data, and you own all the marketing opportunities for it on a global scale. Our platform not only gives full control to your brand, we also support you in marketing to the communities you’re targeting. SheerID’s Marketing Hub provides a wide range of free learning opportunities as well as marketing products and services for email, digital and social that you can layer into your campaigns.

In the end, it’s largely about one thing – creating a direct relationship with your customers to build long-term growth. Our belief is that the only way to do that is if the brand has complete control of the customer experience, data and marketing. 

Contact Us to request a demo.