3. Describe the network effects on Cardagin

4. Which side does Cardagin charge? Comment on teh appropriateness of this monetization strategy

The Pilot To test the Cardagin concept in the marketplace, a two-part pilot program with a small sample ( 45 25.5% Education High School 10.0% Associate Degree 6.7% Bachelor Degree 50.0% Graduate Degree 21.7% Post-Graduate Degree 11.6% Marital Status Married 50.2% Single 45.1% Divorced 4.8% Gender Male 46.4% Female 53.6% -11- Exhibit 2 CARDAGIN: USER DEMOGRAPHICS Key Metrics for Cardagin Users Age 45 25.5% Education High School 10.0% Associate Degree 6.7% Bachelor Degree 50.0% Graduate Degree 21.7% Post-Graduate Degree 11.6% Marital Status Married 50.2% Single 45.1% Divorced 4.8% Gender Male 46.4% Female 53.6% Exhibit 3 CARDAGIN CASE STUDY Overview of Cardagin Services for Prospective Clients Cardagin Case Study www.cardagin.com The Local Merchant A local coffee and donut franchise in Charlottesville, VA struggled with coupons and paper punch cards for years. Andy, the local franchise "Using Cardagin, we acquired a group owner, spent on average $12,000 per year to attract customers to his of customers who want to hear from store with limited success. us, who care about us and who respond to our offers Andy wanted to leam more about his customers - who used coupons Andy, local franchise owner who picked up punch cards and who spent what? He chose Cardaginfor his marketing and customer retention needs. The Setup Andy worked with Carcagin to devise a multi-part mobile marketing campaign targeting University of Virginia students. As the students retumed from summer break, Andy offered an exclusive promotion that could only be redeemed through Cardagin: "any drink any size for free. This exclusive offer ranfor one week and was designed to attract customersto Andy's store and join his loyalty program, powered by Cardagin. The following two weeks, Andy ran another exdlusive offer on Cardagi any drink any size for $0.99" This offer, while still aggressive, helped Marketing Tip Andy engage his new customers on his new platform. During the final Having staff encourage all customers two weeks of his mobile campaign, Andy ran a final offer any drink, to join your new loyalty program any size for $1.29!" As customers redeemed the offer, Andy encouraged powered by Cardagin, gives you insight his staffto remind every customer to join his mobile loyalty program and into the value of a customer. earn points forevery dollarthey spend The Results So, what happened? As a result of creative marketing and using Carcagin's unique mobile technology, Andy was able to generate substantial revenue for his business. More importantly, Andy's new loyalty program, powered by Cardagin, generated repeat customers instead of one-time deal hunters, and gave Andy insight into a group of customers that he can engage and reach at anytime. Here's a look atthe numbers Redemptions: How many drink offers were redeemed? Free drink offer: 531 in one week $0.99 drink offer: 329 infirst week, 268 in second week $119 drink offer: 231 in first week, 184 in second week Short-Term Gain: What was the immediate impact of the campaign? Campaign revenue: $1,084.83 (excluding additional purchases) Hundreds of new customers within a specific demographic Upsell opportunities of higher marginitens Long-Term Gain: What were the long-term benefits of the campaign? Repeat customers who are rewarded for their loyalty Direct line of communication with engaged customers Transaction log of who spent what, whenand where Viral marketing from loyal customers who share savings and rewards via social media outlets and who recommend Andy's business to their friends and family The Bottom Line Cardagin helps Andy identify his best customers. He now knows that Karen R, Richard G. and Matt S. come in everyday for their morning coffee. The lifetime value of these customers, and others like them, is priceless to a local business. Using Cardagin, Andy has a modem, meaningful and cost-effective way to reach, engage, reward and retain those customers whomean the most to his business. Source: Cardagin. Used with permission. CARDAGIN: LOCAL, MOBILE REWARDS The Cardagin Merchant Portal 4a. Merchant Portal Karen's Coffee (434) 555-6665 karenfoollee.com Business Deals Advertisements Locations 250 Karen's Coffee Karer's Coffee 412 E Main Street Charlottesville VA 22902 (31) 565-5665 D Charlie Edit Details Manage Transactions Advertisements New Reward New Offer New Anoncement The Free Pastry Active Active Startson Tue, 04 Oct 2011 8:00 am EDT Thu 05 Oct 2011 8:00 am EDT Ends on Mon, 31 Oct 2011 9:00 pm EDT Offer Open Mic Night at Krem Active Thu, 20 Oct 2011 11 45 pm EOT Announcement 4b. Information Reporting Karen's Coffee (434) 666-6556 kareng coffee.com Business Details Advertisements Locations Transactions for Karen's Coffee New Transaction Amount Spent Net Balance Change Created John 900 Mon 10 OC 2011 4.49 MIDT John 5150.00 15000 Mon, 10 Oct 2011 4:48 pm EDT Mon 10 Oct 2011 4:24 pm EDT John 55.00 500 John $15.00 1 500 Mon, 10 2011 22 John 59.50 950 Mon 10 Oct 2011 4:21 pm EDT Mon 10 Oct 2011 4:20 pm EDT John 55.58 555 John -20.000 Mon 10 Oct 2011 4:15 pm EDT John -$99.00 -2,000 Mon, 10 Oct 2011 :14MEDT : Cardagin. Used with permission. CARDAGIN: LOCAL, MOBILE REWARDS Overview of Cardagin Services for Eppie's Restaurant Network Effect of Being Listed with Other Local Businesses 1a List View 16. Map View 1c. Business Storefront 8:20 AM Cardagin Sprint 8:49 AM Cardagin 8:29 AM Location Code Carde Code 10 Epple's wala Map EPPIES Q Search m the anal Visit Website Phone & Map Unfollow 228 0.46 Eppie's Integral Yoga Save $5! McGrady's Irish Pub Trivia Tuesdays! Mona Lisa Pasta Free Pound of Pasta! El Puerto - Barracks... Save $2 on your purchase The Virginia Shop 0.45 Trivia Upgrade and Extender Other Details + 0.65 m Google a Q Mobile Presence in Cardagin le. Points Screen 8:29 AM +90 Location Points & Rewards 1f. Redemption Screen 1d. Business Information Sorint 8:30 AM Phone & Map 8:29 AM Ger 228 Success Trivia Upgrade and Extender 2 UNREDEEMABLE REWARDS Free Dessert Google 1000 Eppie's Free Daily Special 0000 412 East Main Street Charme VA, 2012 4349639000 R205 D30 76E Get Direction Please show this code to redeem o The Pilot To test the Cardagin concept in the marketplace, a two-part pilot program with a small sample ( 45 25.5% Education High School 10.0% Associate Degree 6.7% Bachelor Degree 50.0% Graduate Degree 21.7% Post-Graduate Degree 11.6% Marital Status Married 50.2% Single 45.1% Divorced 4.8% Gender Male 46.4% Female 53.6% -11- Exhibit 2 CARDAGIN: USER DEMOGRAPHICS Key Metrics for Cardagin Users Age 45 25.5% Education High School 10.0% Associate Degree 6.7% Bachelor Degree 50.0% Graduate Degree 21.7% Post-Graduate Degree 11.6% Marital Status Married 50.2% Single 45.1% Divorced 4.8% Gender Male 46.4% Female 53.6% Exhibit 3 CARDAGIN CASE STUDY Overview of Cardagin Services for Prospective Clients Cardagin Case Study www.cardagin.com The Local Merchant A local coffee and donut franchise in Charlottesville, VA struggled with coupons and paper punch cards for years. Andy, the local franchise "Using Cardagin, we acquired a group owner, spent on average $12,000 per year to attract customers to his of customers who want to hear from store with limited success. us, who care about us and who respond to our offers Andy wanted to leam more about his customers - who used coupons Andy, local franchise owner who picked up punch cards and who spent what? He chose Cardaginfor his marketing and customer retention needs. The Setup Andy worked with Carcagin to devise a multi-part mobile marketing campaign targeting University of Virginia students. As the students retumed from summer break, Andy offered an exclusive promotion that could only be redeemed through Cardagin: "any drink any size for free. This exclusive offer ranfor one week and was designed to attract customersto Andy's store and join his loyalty program, powered by Cardagin. The following two weeks, Andy ran another exdlusive offer on Cardagi any drink any size for $0.99" This offer, while still aggressive, helped Marketing Tip Andy engage his new customers on his new platform. During the final Having staff encourage all customers two weeks of his mobile campaign, Andy ran a final offer any drink, to join your new loyalty program any size for $1.29!" As customers redeemed the offer, Andy encouraged powered by Cardagin, gives you insight his staffto remind every customer to join his mobile loyalty program and into the value of a customer. earn points forevery dollarthey spend The Results So, what happened? As a result of creative marketing and using Carcagin's unique mobile technology, Andy was able to generate substantial revenue for his business. More importantly, Andy's new loyalty program, powered by Cardagin, generated repeat customers instead of one-time deal hunters, and gave Andy insight into a group of customers that he can engage and reach at anytime. Here's a look atthe numbers Redemptions: How many drink offers were redeemed? Free drink offer: 531 in one week $0.99 drink offer: 329 infirst week, 268 in second week $119 drink offer: 231 in first week, 184 in second week Short-Term Gain: What was the immediate impact of the campaign? Campaign revenue: $1,084.83 (excluding additional purchases) Hundreds of new customers within a specific demographic Upsell opportunities of higher marginitens Long-Term Gain: What were the long-term benefits of the campaign? Repeat customers who are rewarded for their loyalty Direct line of communication with engaged customers Transaction log of who spent what, whenand where Viral marketing from loyal customers who share savings and rewards via social media outlets and who recommend Andy's business to their friends and family The Bottom Line Cardagin helps Andy identify his best customers. He now knows that Karen R, Richard G. and Matt S. come in everyday for their morning coffee. The lifetime value of these customers, and others like them, is priceless to a local business. Using Cardagin, Andy has a modem, meaningful and cost-effective way to reach, engage, reward and retain those customers whomean the most to his business. Source: Cardagin. Used with permission. CARDAGIN: LOCAL, MOBILE REWARDS The Cardagin Merchant Portal 4a. Merchant Portal Karen's Coffee (434) 555-6665 karenfoollee.com Business Deals Advertisements Locations 250 Karen's Coffee Karer's Coffee 412 E Main Street Charlottesville VA 22902 (31) 565-5665 D Charlie Edit Details Manage Transactions Advertisements New Reward New Offer New Anoncement The Free Pastry Active Active Startson Tue, 04 Oct 2011 8:00 am EDT Thu 05 Oct 2011 8:00 am EDT Ends on Mon, 31 Oct 2011 9:00 pm EDT Offer Open Mic Night at Krem Active Thu, 20 Oct 2011 11 45 pm EOT Announcement 4b. Information Reporting Karen's Coffee (434) 666-6556 kareng coffee.com Business Details Advertisements Locations Transactions for Karen's Coffee New Transaction Amount Spent Net Balance Change Created John 900 Mon 10 OC 2011 4.49 MIDT John 5150.00 15000 Mon, 10 Oct 2011 4:48 pm EDT Mon 10 Oct 2011 4:24 pm EDT John 55.00 500 John $15.00 1 500 Mon, 10 2011 22 John 59.50 950 Mon 10 Oct 2011 4:21 pm EDT Mon 10 Oct 2011 4:20 pm EDT John 55.58 555 John -20.000 Mon 10 Oct 2011 4:15 pm EDT John -$99.00 -2,000 Mon, 10 Oct 2011 :14MEDT : Cardagin. Used with permission. CARDAGIN: LOCAL, MOBILE REWARDS Overview of Cardagin Services for Eppie's Restaurant Network Effect of Being Listed with Other Local Businesses 1a List View 16. Map View 1c. Business Storefront 8:20 AM Cardagin Sprint 8:49 AM Cardagin 8:29 AM Location Code Carde Code 10 Epple's wala Map EPPIES Q Search m the anal Visit Website Phone & Map Unfollow 228 0.46 Eppie's Integral Yoga Save $5! McGrady's Irish Pub Trivia Tuesdays! Mona Lisa Pasta Free Pound of Pasta! El Puerto - Barracks... Save $2 on your purchase The Virginia Shop 0.45 Trivia Upgrade and Extender Other Details + 0.65 m Google a Q Mobile Presence in Cardagin le. Points Screen 8:29 AM +90 Location Points & Rewards 1f. Redemption Screen 1d. Business Information Sorint 8:30 AM Phone & Map 8:29 AM Ger 228 Success Trivia Upgrade and Extender 2 UNREDEEMABLE REWARDS Free Dessert Google 1000 Eppie's Free Daily Special 0000 412 East Main Street Charme VA, 2012 4349639000 R205 D30 76E Get Direction Please show this code to redeem o