Steve Bradbery, Vice President of International Product Solutions at global gift card provider SVS, answers questions on why gift cards should be a key part of any promoters’ toolbox.
Why should creative agencies be interested in gift cards?
Perhaps more than any other tool, gift cards offer great flexibility in the range of promotions that can be created and the level of analytics that can be applied.
They’re perfect for B2C, both for businesses with existing gift card programmes and those that without. They’re also great in the B2B arena, with many companies reporting successes from the use of gift cards for incentive programmes.
How can gift cards be used for promotions?
Although the possibilities are limitless, there are five main types of gift card promotion.
The first is a straight ‘thank you’. Thanks for shopping with us today, thanks for being loyal, thanks for trying our new range, thanks for recommending us to your friend, thanks for your hard work – there are plenty of options.
Next is a gift-card specific promo. Typically you’d reward a shopper buying a gift card with a bonus. For example: “spend £50 and receive a free gift card worth £10.”
The third main type of gift card promotion is a repeat shopper rewards programme. Here customers accrue points over a timeframe and are rewarded with a gift card. You can get really creative here. For example, you could reward customers who post pictures of themselves with their products to social media.
Another promotion involves teaming up with suppliers to offer brand-based offers. “During June, anyone buying an Acme product will be rewarded with a gift card to redeem against other Acme products in store”.
For retailers, this approach is a great way to increase footfall, without having to invest any resources to do it. It’s also a positive approach for brands, who enjoy raised profiles and increased sales (as shoppers often redeem gift cards against a product that is more expensive than the card’s value, topping up the remainder from their own pocket).
The final main type of promotion is popular among Millennials: brand association. Get a £5 gift card to redeem against this brand of jeans when you buy this brand of headphones. Consumers love it, as they get £5 off. Both brands love it, as they benefit from the customer loyalty and awareness of their partner’s brand in addition to their own.
Why should gift cards be used as a promotional tool?
Gift cards are popular. Most recipients see them as ‘free money’ and they enjoy universal appeal. Offer a bottle of champagne or a new car, you risk alienating those who don’t drink or can’t drive. Enable them to buy whatever they want, you instantly attract a wider group of people. The average redemption rate for our promotional cards is 32%, compared to less than 4% for paper coupons.
The cards also offer promotional opportunities. A classic card printed with a company’s brand or ad campaign can be viewed scores of times in a wallet or purse before it is redeemed. It is, in effect, your billboard in their pocket.
To really want to stand out from the crowd, use virtual or augmented reality to enable your physical cards to offer a virtual dimension and additional promotional messaging. This is also a great way to tie a promotion into an ad campaign.
What analytics can you apply to gift cards and will there be a return on investment?
ROI is often the first question on any client’s lips. With gift cards, the answer is easy to provide with detailed analytics. The number of cards sold and redeemed can be identified and tracked by location, date and even hour. Detailed data can demonstrate the success of a programme as well providing insight into customer preferences and behaviour.
What’s more, our own research has shown that, without exception, every promotion run by our clients at SVS has returned a profit. While it is fair to say that our clients have worked hard to make their promotions a success, much of the ROI was down to what we call uplift.
Uplift works because, in the vast majority of cases, consumers spend more than the face value of card. The extra on top is uplift.
It’s the reason why the typical ROI experienced by our clients is 300%. Not bad if you’re just looking to raise the profile of a brand or a product.
Steve Bradbery, is Vice President of International Product Solutions at the gift card provider SVS. The power behind more than 1.3 billion gift card transactions every year around the world, SVS’s award-winning solutions can be found behind household names and global brands on every continent.
SVS is a sponsor of the IPM Awards 2016.