Smart Strategies for Using Gift Cards in
Loyalty Programs

We’re a nation of deal-seekers. It’s probably safe to say that’s always been the case, but today it’s more pronounced than ever. Marketers have trained consumers to actively seek out deals and promotions with unlimited technology at their fingertips. The smartphone is turning everyone into professional shoppers and consumers are working incredibly hard to find the best deal possible.

In its new winter issue, COLLOQUY published thoughts from our Theresa McEndree about why she thinks we’re in a perfect promotional storm. She also discusses why gift cards can be the centerpiece of an overall loyalty strategy.

Here’s an excerpt:

Loyalty marketers don’t always give gift cards a lot of consideration as a mainstay of a consumer loyalty program. Here are some reasons gift cards are a valuable and extremely effective tool in your promotional toolbox:

  • Clients frequently ask us, “What’s the right reward?” Our response often starts with another question: What rewards are consumers purchasing for themselves? One big answer, and getting bigger by the year, is gift cards.
  • Retailers love gift cards as much as consumers do. The profitability, ROI and long-tail customer value of gift cards, when used in promotions like loyalty programs, can be substantial.
  • For today’s consumer, price is more influential than any other factor. Our research has found consumers identify price as the factor with the greatest effect on their purchasing behavior.

    Similarly, more than three of four would drive up to 10 minutes out of their way for a $10 rebate on a $50 item. Eight of 10 consumers look for deals before they go shopping. This mentality holds for all age and income groups.
  • Which brings us back to the perfect promotional storm. It’s a pairing of consumer love of gift cards with the deal-seeking mentality, and adding in all of the benefits for the retailer. We call that a win-win-win scenario.
  • Gift cards provide inherently better promotional economics than instant discounts.
  • All promotions have to come down to numbers in the end. Fortunately, doing the math is easy when it comes to using gift cards.

Download our guide, Is Your Consumer Incentive Program Really Working? to learn how to design and execute consumer promotions that consistently get results.



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