The Definitive Guide to Gift Card Marketing – Part 1

This Guide was written to empower Canadian Small & Medium Sized Business Owners with the knowledge to increase their profits using gift & loyalty card marketing. So what’s in this guide…?

  • What is a Loyalty Card Marketing Campaign?
  • Benefits of Card Marketing
  • The Psychology behind Gift Cards
  • Real Life Examples of successful small-to-medium sized companies card marketing strategies
  • Cost of implementing a Card Marketing Campaign
  • Return on Investment
  • How to get started

What is a Loyalty Card Marketing Campaign?

Loyalty Cards are what the name implies. They are used in marketing campaigns which are designed and utilized to maintain a loyal customer of your business.

The best way to explain Loyalty Card Marketing is to describe a few campaigns that you might already be familiar with.

1. The Discount Card Campaign

A good example of the “Discount Card Campaign” is the membership card that Costco uses. The customer pays an annual membership of around $50 dollars to be able to shop at the Costco Store and have access to their discount prices. Barnes and Noble has a similar program where the customer pays for a $25 dollar annual membership card that gives the customer a 10% discount on all purchases made in the store.

2. The Point Card Campaign

Second Cup Coffee Houses have had a “Point Card Campaign” for years, it is a variation on the old punch card system, where for every purchase of a coffee the customer receives a stamp or punch in the card and after a certain number of punches the customer receives a free coffee. Today’s version is simply swiped across the card terminal that records the number of visits or coffees purchased.

3. The Money Card Campaign

Shoppers Drug Mart has an excellent example of the “Money Card Campaign.” This is where every purchase receives points that then tally up to an amount of money that can be used to purchase goods and services. Canadian Tire has had a variation of this program for years, with their Canadian Tire Money, handed out to customers after a purchase is made.

When all is said and done, these concepts are interchangeable and are really just variations on gift cards. Instead of swiping a dollar amount across a card, loyalty cards are swiped with visits, oil changes, hair-cuts, massage sessions, items purchased, or whatever assigned amount you choose to encourage your customers to return to your business.

A huge benefit of Loyalty Card Campaigns: they act as walking billboards. A word of caution, though: owners must remember to keep loyalty marketing strategies simple (KISS).

WARNING: If your staff struggle to understand the benefits of your loyalty strategies then chances are greater that your program can easily fail. Make the rewards attainable for customers, where the benefits are easily identifiable. This will help increase sign-ups.

Although loyalty marketing campaigns can be extremely successful, We’ve learned -from personal experience in helping many owners implement card marketing campaigns,-that real profits in card marketing are in gift cards.

WHY HAVE A CARD MARKETING PROGRAM IN PLACE…?

  • Help you increase your customer base
  • Help you retain your existing customer base
  • Can increase your average sale amount (ticket price)
  • Can keep sales in the store as they can be used instead of refunds
  • Offer “uplift” meaning dollars spent above the value of the card
  • Are more secure than “certificates” – meaning less cases of counterfeit
  • Are like mobile advertisements for your business – walking billboards
  • Are re-chargeable
  • Make purchases very easy for your customers
  • Give a competitive edge over your competition
  • Are one of the most popular gifts in North America

We believe the “REAL JUICE” in card marketing comes from Gift Cards. Loyalty cards are great, but Gift Cards are where the merchants make their $$$!

Click on the following link to understand “The Psychology behind Gift Cards“.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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