What are the KPIs to monitor for a successful gift card program?
More and more retailers are offering physical or digital gift cards on their websites. However, few take the time to monitor and analyse the different data of the program. Yet, the gift card is in a fast-evolving market, where consumer behaviours are changing rapidly, and where it is important to remain competitive. So, what are the main KPIs to follow?
Data to improve customer experience on the order page
Like any other service, if we don’t have an optimized order page or shopping tunnel, then the number of validated shopping carts will be low. To analyse the evolution of behaviours, and identify possible problems, it is interesting to monitor some KPIs.
This first statistic is used to evaluate the effectiveness of the gift card order page. It represents the number of consumers who went to the gift card page but left. It means that they did not proceed to purchase a card. If this rate is high, then the page may not be performing well. Therefore, it needs to be reworked. Some questions are to be raised in this context:
- Is the ordering process efficient and simple?
- Is the page loading time fast?
- Is it adapted to all devices?
- Does it contain enough reassurance elements?
However, a high bounce rate should be put into perspective. Some people in a research phase may come once to get information, and then come back to make a purchase.
A website effectiveness can also be measured by the conversion rate. It represents the percentage of card orders out of the total number of visits. Again, if it is low, the brand should analyse the gift card order page in more detail and improve the customer experience:
- Is the purchase tunnel clear?
- Is there any friction in the purchase tunnel?
- Are there any missing features?
- Is the choice in payment methods limited?
- Is the delivery binding?
Deliverability of e-gift card emails
Being the traditional way to send digital gift cards to the recipient, it is an integral part of the process. It is therefore relevant to take a look at the emails and their deliverability rate. Here you have to pay attention to the number of failed sending, the number of emails landing in spam… knowing that each failed sending leads to dissatisfaction of both buyers and recipients and could have a negative impact on the overall solution.
Fraud rate (false positive)
The gift card is one of the digital tools that are susceptible to online fraud. As a favorite target of cybercriminals, more and more brands and retailers are setting up anti-fraud systems. However, even if the advantages are there (limit the loss linked to fraud), there is always a risk of false positives. That is to say, real consumers who have come to buy a card and are blocked by fraud. This can lead to an outright refusal or the addition of several additional control steps. This drastically increases the chances of abandonment and dissatisfaction. It is therefore important to monitor the variation of false positives in order to limit these negative consequences.
Brands with a gift card program can also analyse traffic peaks. It is well known that a gift card service is impacted by major holidays such as Christmas, New Year, Mother’s Day… At each of these holidays, brands must redouble their efforts to avoid possible bugs due to simultaneous overuse of services. This way, the level of customer experience will always be maintained.
Arbitrate the performance of a gift card program
A gift card program involves costs, but is the revenue sufficient to cover those costs and make a profit? This is the question that must be asked. To answer this, the following KPIs should be monitored.
Number of gift cards purchased
This data allows us to know the number of customers who have purchased a gift card, and therefore the number of cards issued. The more cards issued, the more successful the service is.
The total amount of gift cards purchased
Here we are talking about the amount in euros of cards purchased over a given period. This is a first indicator of the turnover generated by the gift card service.
The total amount available and the average time between receipt/use of the gift card
Not all recipients will go out and spend their gift cards right away. During the time between the issuance of the card and the spending, the monetary value remains with the retailer. This value can then be used to improve working capital.
In addition, it allows to analyse and see when an average customer comes to spend it within the points of sale, and therefore to anticipate the traffic as well as identify communication opportunities.
The total amount used
This is the amount of gift cards purchased which has already been spent by the recipients.
The additional amount
When a cardholder arrives in a store or on the website, selects some products and validates his cart, the amount is not always exactly the same as the card. Very often, the amount of the cart is higher than the amount of the card. The customer must therefore use an additional payment (PayPal, credit card, cash…) to pay the rest. This additional payment is also attributed to the card service, and makes it possible to know exactly how much profit was generated.
Brands can also analyse the additional payment method used to see what the preferences are and if there have been any problems.
The total amount expired
Gift cards have expiration dates. Sometimes consumers do not spend the entire card or only a portion of it. In these cases, the amount stays with the brand. On the accounting side, they collect the amounts as “extraordinary income”.
Categories of products purchased
Brands can decide to identify the categories or products that are most purchased by gift card holders. This way, they will know which products are the “stars” and will be able to highlight them in their communications to future cardholders and, above all, to ensure that they have sufficient stock.
The number of new customers
In some cases, a gift card program can be used to gain new customers. It is entirely possible that a cardholder has never set foot in a brand’s stores before. For the brand, tracking each new customer that comes through the service will help to highlight the underlying benefits of a program. Even better, it can consider all the future gains brought by these new customers in order to be as close as possible to reality in terms of its ROI.
Share of gift card spending across channels
Another data can help a brand to analyse the performance of its service: the spending on the different points of sale linked to the gift card. Knowing whether recipients prefer to buy on the website rather than in physical stores will allow the brand to adapt its speech and communication.
Return on investment
The ROI is the variable par excellence to study the profitability of the gift card project. The goal for all brands is obviously to be as profitable as possible. To do this, you need to add up all the gains (turnover, additional income, profit from new customers, etc.) and remove all the costs (cost of the solution and its maintenance, communication and marketing costs, etc.). To optimize it, it will be necessary to look for points of improvement.
One-time gift card marketing campaign
Brands and retailers can, on a one-off basis, launch marketing campaigns using the gift card as a promotional tool. This consists in offering a gift card of a predefined amount to a number of targeted customers. For this type of campaign, certain KPIs must be considered.
Data around emails and other communication channels
If a brand chooses to use email as a communication medium, it will be interesting to look at the data related to this medium: deliverability rate, spam, hard and soft bounce, opening rate, click rate…
If a brand chooses to advertise online on social networks for example, it will be necessary to look at the performance data (number of impressions, click rate…).
Number of gift cards spent
Not all of the people targeted in advance will be receptive to the marketing campaign. To know the real number of customers who went to the store or the website and made a purchase, it will be necessary to see how many gift cards were spent.
Total amount spent
Even if the brand has, prior to the launch, chosen the different amounts of gift cards offered, it is important to know the total amount of gift cards that have finally been used.
In this context, the additional income is very important. The profitability of a marketing campaign, where the brand offers gift cards of a defined amount, is based on the additional income. In other words, the amount that the customer has added on top of the card to validate his shopping cart.
All brands experience a peak in traffic for the holiday season, but what about other events in the year? Monitoring traffic peaks will help answer many questions such as: Is it relevant to launch a communication campaign or a flash promotional campaign on the gift card on Mother’s Day?
Secondly, it is interesting to go into more detail in the data. To know exactly when consumers start buying Christmas cards, for example. This way the launch dates and the duration of the marketing campaigns for the card will be optimized.