Questions/answers about gift cards and promotions

by | 24 Jun, 2021 | INSIGHTS

The gift card is a very good alternative to the promotions traditional format. Even though it has already proven itself to be a great success with consumers, questions that need to be answered still remain.

Why choose the gift card as a promotion instead of the coupon or promo code?

Promo codes are very often used by brands and retailers. As a result, consumers have become used to them and no longer feel that they are being rewarded. The verdict is in: 80% want a real reward rather than a simple coupon.

On the other hand, the gift card, which has risen to the TOP 3 in the Christmas gift list, feels the odds in its favour. It is loved and adopted by more and more consumers. Therefore, it is not surprising to see that 58% prefer the gift card for promotions against 30% for promo codes.

With this in mind, choosing the gift card as a promotion means putting all the chances on your side for a successful promotional campaign, knowing that this tool remains flexible in its use.

Physical or digital gift card to set up promotions?

The digital format seems to be the most appropriate to launch promotional campaigns. They are faster to edit: hundreds in just a few minutes. They can be simply sent to a customer or a prospect email database. With a digital gift card as an attachment to the email or directly in the body of the email, brands have the possibility to quickly start their campaigns.

With a physical card, it is much longer and much more expensive. You have to think about the extra time for printing and sending. You can’t be sure of the exact date the customers will receive it. Finally, the costs will be charged directly to the profits.

However, it is not forbidden for brands to consider plastic gift cards. For example, if they want to send cards to a limited number of specific customers: privileged customers, for whom it is important to mark the occasion. The physical gift card, received via mailbox, will have more impact than its digital version.

When to launch a promotional campaign based on a gift card?

There are several key events for which brands can decide to launch a promotional campaign: sales, back-to-school, Mother’s Day, end of year celebrations… But other events more specific to the brand’s commercial activity can lead to this. For example, if you launch an e-commerce site, a new physical store, a mobile application… Another example: let’s imagine you are a travel agency, then it is quite relevant to launch a campaign before the summer vacations.

As for the duration of the campaign, there is no rule. You can start with lightning promotions of only one or two days, or longer campaigns going up to one or two months. It all depends on the brands’ objectives.

How to send gift cards?

Today, there are two ways to send gift card codes for digital. Either the brand delivers to each customer a unique code, which he can use at will until the deadline. Here, if we have a database of several thousand people, the brand will have to deliver several thousand codes, which, in the end, induces a certain cost without even being sure that everyone uses his code.

Either the brand creates codes on the fly, sending to each of its customers or prospects a link to generate a code if they wish. The brand will create fewer codes, and only for those who intend to use the card. This way, it rationalizes these costs for a better return on investment.

As for the date of sending the codes or links to generate them, it all depends on the objectives. Starting the campaign well before the event will attract the attention of a maximum number of consumers, who will wait until the day of the event to go to the physical or digital points of sale.

Starting the promotional campaign during the event, but very quickly (1-2 days), will reactivate sales.

Finally, you can start the campaign afterwards, only for customers who were active during the event. Here the goal is to make consumers come back to the brand’s stores a second time, and create engagement.

How to adapt the gift card to promotional issues?

Brands choose to launch promotional campaigns, but not necessarily for the same reasons. And depending on the issues, the actions taken will be different. The goal is to reach the objectives set beforehand.

The most common reason is to sell off inventory. We know that stocks are expensive, and we have to find a way to get rid of them to welcome new products. How do you do this? Through promotions. Here, the gift card comes as a direct complement to other promotional tools. If there is consumer fatigue, even though the promotional campaign is not over, or if you want to boost traffic at the point of sale, offering a gift card of a limited amount is the key.

Some retailers find it difficult during the post-sale period, or after peaks in activity such as Christmas. They can therefore use the gift card to fluctuate traffic. The principle is simple: during the high traffic period, they can offer a gift card of a fixed amount to some or all customers who have made a purchase or had a certain behaviour. The specificity will be on the activation date and the deadline. These will be on the quiet period, in order to encourage consumers to return to do their shopping within the points of sale.

Some brands, again, are looking to increase the average basket over a short period of time, or encourage the purchase of higher-end products by its customers. In this context, they can choose to offer a card at the time of the validation of the basket. And the higher the amount of the basket, the higher the amount of the gift card offered. For example: for a basket of 50€, a gift card of 5€ is offered, for a basket of 100€ a card of 10€ and for a basket of 150€, a card of 20€.

It may also be that a brand opens a new store, or launches a new application, or wants customers to use a specific payment method… There are a multitude of beneficial behaviours that the brand wishes to promote. Offering a gift card of a small value, if the consumer adopts a certain behaviour, will achieve the objectives effectively.

Where should the promotional gift card be valid?

Since consumers now want to have a choice in the way they shop, brands and retailers should work on synchronized promotional campaigns on all devices, from digital to physical. The same goes for gift cards. A customer must be able to spend it online as well as in any of the brand’s physical stores.

With some exceptions of course: for example, if a brand decides to launch a promotional operation to promote the new mobile application. In this case, it will be interesting to offer a gift card only valid on this device, in order to encourage consumers to try it.

How to adapt the promotional actions via the gift card to the customer’s life cycle?

Depending on where the customer is in the life cycle, the way to use the gift card as a promotion will be different:

  • Encourage trial for new customers by offering a small value gift card to those who have abandoned the cart on the internet, for example.
  • Increase referrals from existing customers for new customer acquisition, by offering a small value gift card to each customer who has made a referral to a friend via social media, for example.
  • Reactivate old customers, by launching an email campaign with a small value gift card to discover new changes, new product lines, etc.
  • Retain current customers, by offering a gift card of a predefined value, around special events, or to thank for loyalty.

The digital gift card can be a great asset in a brand’s strategy. From acquisition to loyalty, it is a real Swiss army knife, a formidable weapon to stay in the spotlight and capture consumers and customers. So, when do we get started?

Suggestions for further reading

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