Constant Contact Buys CardStar, Moves Into Mobile Loyalty Tech

1/19/12Follow @gthuang

The evolution of Constant Contact continues. The Waltham, MA-based online marketing firm (NASDAQ: CTCT) said today it has acquired Boston-based CardStar, a maker of a mobile app that lets people consolidate their loyalty and rewards cards. Terms of the acquisition weren’t given.

The deal represents Constant Contact’s first foray into mobile rewards technology aimed at helping small businesses stay connected to consumers. CardStar’s app lets people create a digital version of their physical membership cards (for retail stores, gyms, and so on) all in one place, on their smartphone. CardStar started in late 2008 and has four employees joining Constant Contact, including founders Andy Miller and Danny Espinoza. The startup says it has more than 2 million active users.

“I was a user before I was an acquirer,” says Constant Contact CEO Gail Goodman.

And acquiring CardStar makes a lot of sense for Constant Contact, which has been working to transform itself from an e-mail marketing firm into a one-stop shop for small businesses trying to reach customers through social media, online marketing, rewards programs, and other methods.

“This acquisition is at the intersection of everything we do,” Goodman says. “As we look at what small businesses are trying to do, they are trying to use every possible channel to reach customers—e-mail, social, mobile. At the core of that is a loyalty program. Andy and his team will help us weave those pieces into a really simple, really impactful application on the merchant side.”

Goodman declined to give specifics on any upcoming mobile products, but she emphasized that CardStar’s app will continue to run, and that more is on the way. “We are on a pretty aggressive product roadmap,” she says. “Much of what we’ve done has loyalty at its heart. Our customers have always wanted to take that a step further. But without mobile, it’s pretty hard.”

As for why Constant Contact chose CardStar over other companies in the mobile couponing and rewards sector, Goodman pointed to the startup’s traction with consumers and the culture fit with her team.

Constant Contact says it has more than 450,000 customers, mostly small businesses, nonprofits, and associations. Last summer, I spoke with the firm about its plans for innovating as a young public company (IPO in 2007), and about the biggest technology shift in its 13-year history (integrating Web software with existing database systems, among other things).

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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