Increase profits and encourage customer loyalty with a customer acquisition strategy that magnifies the real value of prepaid gift cards!
Continuing customer loyalty is an increasing source of profitability for businesses that value repeat sales. Acquiring new and potentially long-term customers requires an ongoing strategy for growing your business and looking for incentives to try your company’s products and services.
Gift cards are a smart bonus in a customer acquisition strategy, worth more than monetary value. Shoppers given a ‘free’ gift card usually spend more than the card’s value. They use the card as part payment towards a purchase of something of higher value that they want to buy, rather than as a token purchase to ‘spend’ the value on the card.
So instead of the cost of the card being a cost to the business, it moves to the right side of the balance sheet and is the beginning of an ongoing and profitable customer relationship.
Gift cards are good for business. They are the most desired reward option across all incentive and loyalty programs and established retail market leaders recognise that gift card programs drive customer acquisition, increase revenue and strengthen brand awareness. A prepaid gift card as a reward is viewed more favourably than a discount and encourages customers to talk favourably about the product.
Case studies from Corporate Prepaid Gift Cards show the effectiveness of using corporate prepaid gift cards as part of a customer acquisition strategy.
Energy Retailer Competitive Incentive
Offering a gift card for customer acquisition has proven successful in the highly competitive Australian energy industry. The Australian National Energy Retail Law allows customers to move from one energy retailer to another for a better deal.
A leading energy retailer engaged Corporate Prepaid Gift Cards for their acquisition strategy to offer households a $100 eftpos gift card if they converted from their existing retailer to the new seller. Once they paid their first bill, the gift card was activated. The incentive proved successful, recording the highest response rate for customer acquisition, who would be become ongoing purchasers. Customers were not only interested in cheaper energy, they saw the value of the card that could be used at any retail outlet that accepts eftpos.
Auto Sales Test Drive Incentive
The competitive market segment of auto sales frequently uses bonus gift cards to invite customers to experience a test drive in a new model vehicle. As bonus gift cards are recognised as an attractive incentive in this high-value market, Corporate Prepaid Gift Cards partnered with a major car brand to offer a $100 branded gift card to encourage past and current brand owners to test drive a new model. The resulting test drive experiences increased by 50 per cent.
Gift Cards as Incentives
Prepaid gift cards are the reward of choice for corporate promotions as they are recognised as a powerful way to generate interest in a product or service. Research shows that a gift card encourages consumers to buy more and become return customers.
With prepaid gift cards that can be branded with your name and logo, it’s easy and cost effective to run a promotional campaign using them as incentives to reinforce or encourage change in behaviour.
Prepaid gift cards can also be used as an incentive for online shopping as a reward for a target spend, or to highlight a promotion on Facebook.
With a well-designed acquisition program, an initial investment in acquiring a customer will pay for itself as the customer returns regularly to use that company’s products or services.
To develop a customer acquisition strategy, work out the potential profit value of a new customer and calculate the cost of attracting that customer. Customers whose estimated lifetime value exceeds the initial acquisition cost can be targeted profitably.
Consider an incentive to persuade them to use your products or services for the first time. Industry experts recommend gift cards as they are shown to dramatically boost sales and create repeat customer transactions.
Gift Cards and the Reciprocity Principle
When you include gift cards in an acquisition strategy, consumers in effect get ‘something for nothing’. They then feel obligated to give something back. Known as the reciprocity principle, it is described in ‘Influence: The Psychology of Persuasion’ by behavioural psychologist Dr Robert Cialdini, who argues that reciprocity is one of the most influential dynamics of human behaviour.
When given something for free, it is valued by the customer. A discount is not regarded as highly and is quickly forgotten.
In a marketing study, participants were asked to choose from receiving 33 per cent more coffee or 33 per cent off the regular price of coffee. What would you choose?
More coffee was the preferred choice, although the discount is a better deal. Researchers found that people believed an increase in quantity and the discount were equivalent. Getting more for the same price is regarded as superior to paying less. We like to believe that we are gaining rather than losing, even if it costs more.
As well as being an incentive in major customer acquisition programs, low denomination prepaid gift cards can be used as limited time promotional incentives to encourage shoppers to visit again. With store branding they are a reminder of your business and invite the customer to return.
Gift Cards are Talked About
Customers like to talk about what they have received for free. A prepaid gift card is likely to be talked about to friends and family, even mentioned on social media, so its value is enhanced by word of mouth. Research shows that having your customers talk about your company to others in a positive way is a powerful form of marketing, it strengthens loyalty and encourages others to become customers too.
Corporate Prepaid Cards offer custom cards to be designed with your own branding ready for customer acquisition programs. You can order small volumes of branded cards so once your design is finalised, you can order up to 200 cards and receive them within 10 business days, to capitalise on the success of your marketing program.
Photo Credit Rebecca Aldama