By Karice Moore-Hill, SELP Digital
We’re now at a point where it’s safe to assume that 99% of retailers understand the need for a gift card program. There are thousands of examples proving how effective gift cards can be for customer acquisition, retention, data collection, and increased spending
So, with (literally) millions of branded gift cards being sold across a combination of in-store and online channels, how do you elevate and distinguish your brand to deliver the best possible return?
Having a gift card program is better than none at all. But ongoing success and consistent growth will go to the brands that remain diligent, tap into every sales channels, and think outside the box!
In this article, I will share three tips for how brands can differentiate their gift card program and achieve consistent year-over-year incremental revenue from existing and previously untapped sources, while effectively utilizing CRM data to deliver memorable customer experiences.
1. Analyze, Learn, Evolve: Deep clean your gift card program
As with any element of running a successful operation, you need to regularly analyze the data, learn from it, and evolve accordingly. If your goal is long-term success, consider these crucial points for gift card program optimization:
- How much revenue as a percent of total [company] sales is your gift card program currently generating?
- Are your gift cards integrated with Marketing, Loyalty, and Customer Experience objectives?
- What would you like your gift card program to achieve in the next 1, 3, 5 years?
- Do you have a roadmap of how to grow or adapt your program to reach these targets?
- Most importantly, do you have the skills and resources in-house to effectively manage your program and achieve annual sales growth?
The most high-performing gift card programs have a dedicated in-house program manager who truly has the breadth of knowledge and experience required to maximize results. But many brands don’t have the internal resources to dedicate to gift card program management. In these cases, the value of outside consultation simply cannot be underestimated! Tapping into external expertise is about working smarter, gaining fresh perspective, and optimizing the revenue potential of gift cards.
2. Loyalty rewards and co-brand marketing
70% of consumers cite loyalty program benefits as critically important to winning their lasting loyalty. One of the most powerful tools at your disposal is your customer relationship management (CRM) data.
Offering a loyalty program and collecting usage data is critical to understanding customer behaviors and developing a roadmap for engaging brand experiences that will keep them coming back. Customer analytics enable you to create and deliver tailored offers, loyalty rewards, and even strategic brand partnerships that will resonate with your customer-base to drive repeat shopping. Gift cards are the most effective method of incentivizing shopping habits, driving engagement, and helping boost customer acquisition.
So, tip number two is all about using gift cards as a central component of your loyalty and rewards program:
- Offer a fixed value gift card as incentive for joining your loyalty program to boost enrolment.
- Make gift cards the core method of delivering loyalty rewards; points earned should convert to tiered gift card values, which are perceived like ‘cash’ and therefore much stickier with your customers.
- Include gift card purchases as part of the loyalty rewards value chain; the purchase of a $50 gift card should accrue loyalty points in the same way as product purchase.
- Utilize promotional gift cards with specific date and purchase parameters to incentivize targeted customer engagement and shopping behaviors. [Customers prefer gift cards 3:1 over percentage discounts or coupons.]
- Partner with a popular ‘complementary brand’ and use their pulling power to encourage footfall/sales/repeat purchase/acquisition.
By ‘complementary brand’, I mean a company whose products, services, or values tie in well with your own. For example: a home meal kit brand such as Home Chef might partner with a homeware supplier, like IKEA – one brings the food, the other brings the cooking utensils. This scenario can be executed through direct partnership or bulk purchase of a complementary brand’s gift cards from a licensed reseller such as SELP Digital
3. Get more from your gift card program!
Most brands start out by developing a consumer-facing gift card program. Once this is finely tuned, the next most obvious expansion is to launch into third party B2C sales channels such as physical ‘malls’ and the B2B market for bulk gift card sales. These are sure-fire ways to get more from your gift cards and generate incremental revenue. In the last five years, markedly post-pandemic, both of these channels have become vital to long-term gift card program success!
In 2022, gift cards generated 2% of worldwide e-commerce sales. And by first quarter 2023, B2B gift card sales accounted for nearly a quarter (23%) of the total US market1 and in Europe, that figure rises to 75%2. In 2024, 61% of global companies plan to increase their 2024 budget for gift and prepaid cards as incentives.
My big tip here is not the act of persuading you to launch a B2B gift card (that’s hardly ground-breaking advice!), but to highlight the value of B2B gift card sales and the importance of working with the right partner to manage, or at least consult on, the complexities and nuances that come with facilitating a full-scale B2B program.
While your brand may have a Gift Card Program Manager or an internal resource wearing multiple hats who oversees the general gift card marketing activity, manages production quantities, and organizes distribution to stores based on sales and redemption data, the execution of a successful B2B operation involves many more facets:
- Understanding the different channels, tactics, and geographies available, including knowledge of the legal parameters for each.
- Selling into those channels and locations with the right commercials and licenses.
- Managing production that distributes to a vast number of partners and countries.
- Processing issuance and validation complexities.
- Handling complaints, fraud attempts, and order issues.
- Nurturing partnerships to place your product(s) into global catalogues.
- Developing the technology to facilitate digital partnerships and distribution.
- Marketing and presence in the right places at the right time.
This list continues to grow as the industry develops.
The moral of the story here is that the most efficient way to manage a successful B2B gift card program is to source an external partner who has extensive knowledge of the industry and a network of existing relationships in geographic markets where your brand should be present. The right partner will manage the day-to-day weight of B2B sales so your team can focus on what matters most—customer experience and the business!
In conclusion, the aims we considered at the beginning of this article—driving incremental revenue, engineering a loyal following, providing personalized experiences—are best achieved via existing program analysis, ongoing improvement, and frequent optimization. At the end of the day (or year), brands that stand out from the crowd are those who pay close attention to these factors and differentiate themselves from the rest.
The running theme throughout the tips I’ve shared comes down to making the decision to seek support from external partners who have deeper knowledge and expertise within the areas where you wish to focus and expand.
If you are ready to embrace growth within your gift card program and would benefit from a partner consultant or end-to-end management service, then I’d love to meet you.
Book your consultation with SELP today
A consultative review can be a one-time thing where you take the findings and implement the recommended tactics. But it can also be the start of a partnership that offers ongoing strategic advice tailored to your growth targets.
At SELP, we offer a suite of innovative gift, loyalty, and prepaid program solutions to generate consumer engagement and increase sales by taking the time to thoroughly understand your business and develop a customised strategic roadmap that is right for each brand.
1 The 16th Annual U.S. Closed-Loop Prepaid Cards Market Forecast, 2018–2022 was published by Mercator Advisory Group in June 2019.
2 KPMG/GCVA members data report H1, 2021