In This Episode…

In this episode, Tim and Jess talk about how powerful gift cards and vouchers can be as marketing tools and for generating extra revenue.

These strategies have been gaining momentum as businesses seek innovative ways to engage customers and enhance profitability. In this post, we’ll delve into the key insights shared in their conversation, highlighting the valuable opportunities these tools present for businesses.

Note: The following is an AI summary and has been checked by a human.

Gift Vouchers and Loyalty Schemes: A Lucrative Opportunity

At the outset of their discussion, Tim and Jess emphasized the immense potential of gift vouchers and loyalty schemes for businesses. They outlined several compelling reasons why these strategies deserve attention:

• Gift vouchers boast an average value of $187 per person, with this figure on the rise.
• Shockingly, 47% of US adults possess at least one unused gift card, and 11% have over $300 worth of unused cards.
• Loyalty schemes offer unique advantages, such as gamification and flexibility, making them attractive to customers.

The Growing Issue of Unused Gift Cards

Tim and Jess raised concerns about the increasing average value of unused gift cards and their extended periods of dormancy. They revealed crucial statistics that shed light on this issue:

• Only 70% of gift cards are redeemed within 180 days, with 20% remaining unredeemed after one year.
• Gift cards not only serve as a source of “free money” for businesses but also boost sales and customer visits.
• Forbes reports that gift card users are two and a half times more likely to pay full price.
• Selling gift vouchers can have financial advantages due to breakage and overspending.

Boosting Profitability with Gift Vouchers

Tim and Jess highlighted the significant impact of gift vouchers on a business’s profitability. They underscored the following reasons why gift vouchers are an effective tool for driving profits:

• Gift vouchers lead to increased sales and additional overspending by customers.
• The net profit from selling gift vouchers often surpasses that from selling products.
• Gift vouchers can incentivize purchases without resorting to discounts, preserving profit margins.
• Distributing gift vouchers has a smaller negative impact on net profit compared to offering discounts.

Customer Retention and Attraction Through Gift Vouchers

Tim and Jess discussed how offering gift vouchers can be a powerful strategy for enhancing customer retention and attracting new patrons. They outlined the following advantages:

• Gift vouchers incentivize customers to return and make repeat purchases.
• These vouchers can also be shared with others, introducing new customers to the business.
• Accumulating unused gift vouchers can provide businesses with a significant financial boost.
• It’s essential to establish reasonable expiry dates and allow voucher use for lower-priced items.

Evolving Perceptions of Loyalty Points

The conversation shifted to loyalty points and their evolving perception among customers. Tim and Jess noted the following trends:

• Customers value loyalty points differently, with some saving them for special occasions and others using them immediately.
• Companies like e.l.f Makeup are extending their loyalty schemes to encourage increased spending.

Benefits of Loyalty Points

The benefits of loyalty points for customers were highlighted, along with strategies for businesses to leverage them effectively:

• Loyalty points offer discounts and benefits, including free shipping and early access to new products.
• They reduce price sensitivity and encourage customers to spend more.
• Double-point events can drive increased purchasing.
• For service-based businesses, loyalty points are often more effective than traditional discounts.

Empowering Service-Based Businesses

Tim and Jess explained how loyalty programs and gift vouchers can benefit service-based businesses:

• Loyalty programs can increase average order value and foster customer retention.
• Even utility services like car maintenance can benefit from loyalty programs.
• Loyalty programs tap into customers’ desire for exclusivity and fear of missing out, strengthening brand affinity.

Turning Customer Complaints into Value

Lastly, Tim and Jess offered insights into using customer complaints as an opportunity to provide additional value:

• Offering extra rewards or discounts can help retain dissatisfied customers.
• Creative handling of customer complaints can maintain high levels of customer satisfaction.

In conclusion, Tim and Jess’s discussion underscores the importance of embracing gift vouchers and loyalty schemes as effective tools for boosting business profits, enhancing customer loyalty, and maintaining a competitive edge in today’s market. Businesses that strategically implement these tactics can unlock substantial growth opportunities and foster lasting relationships with their customer base.

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