The other week, my Mum told me that one of her work colleagues gave her a $10 Myer Gift Card . Usually Mum doesn’t shop at Myer because they are expensive, but mu accepted the gift and thought to herself that she could use it on a new shirt that she needed.
Mum works in the Perth CBD, and Myer is just a 5 minute walk from her work. Lunch time came around and off she trot to get her shirt… By the time she finished she ended up spending $585!
I thought that this perfectly illustrated just how powerful gift cards can be for the business! In all my years designing and printing for businesses, I have only heard good things from those using gift cards or gift certificates. So if you’re on the fence about them or just haven’t considered them, here’s a few major benefits.
- People Usually Spend More Than the Gift Card – Like my mother, many people end up spending more than just the gift card amount. $575 more is an extreme example, but often you’ll find on a $20 or $30 gift card, people might spend $50 or so. If people have a $100 gift card and they find $95 of products, it’s very rare that someone will leave $5 on the card, normally they’ll find something extra which might bring the transaction above $100 and they just pay the difference.
- Gift Cards are Essentially Pre-Paid Referrals – If someone purchases a gift card and gives it to a friend they are essentially referring that person to you and offering to pay. It’s a referral with a 100% conversion rate and like any referral, if you look after them, give great service and a quality product and start to build a relationship with that customer it can lead to a long-term profitable customer who purchases frequently and refers people.
- Money in the Bank NOW – Gift cards are prepaid and you get paid upfront. We all know how important cashflow is and if you can get some easy money in the door and not have to immediately supply the goods or service it assists with cashflow.
- Slippage… Huray! – There’s a little thing called “slippage” when talking about gift cards. Slippage is the proportion of people who never redeem their gift voucher or gift card. Various studies come up with different numbers, but on average it’s somewhere between 10 – 15% – Which is great because with those purchases there is no cost of deliverables which means much more money in your pocket!
- You Are Kept Top Of Mind. – Most people keep gift cards in a ‘safe place’, somewhere they see regularly to remind them, often in their purse or wallet. By having your logo or brand in front of your customer on a daily basis, you stay top of mind and it can only be good for your business.
I’m sure there are plenty of other benefits too, but that should be enough for you to at least ask the questions “How can I use this in my business?”
I’m glad you asked… here are a few strategies to help you get started:
- Use them as added gifts or bonuses. When someone spends $x they receive a gift card values at $y, this then entices them to repeat purchase or refer a friend.
- Put together ‘packages’ – Find ways to bundle products or services to make them attractive as gifts. People may want to buy a gift for someone and prefer to give something ‘thoughtful’ rather than a $$$ amount. Pick a variety of price points to suit multiple budgets and include the gift, the card, the envelope etc, and present it with style.
- Outright Promote it. – Put “We Sell Gift Vouchers” in your newsletter, on your website and social media, in your email footer, on posters etc. By simply putting the word out there, a small portion of people will respond.
- Team Up With Other Businesses. – Get another business to provide their clients with your gift cards, this allows new customers to experience your product or service. For example a printer could team up with a website company and offer a $50 print voucher to anyone doing a website, This is a win for everyone, the customer gets the voucher, the website company gets to add value and the printer gets a new customer!
Gift cards are a simple, low-cost, leveraged way to get new business and repeat business in the door each month. Start using them as soon as if you currently use them already, we’d love to hear what your experience has been like!