As you may know, gift cards have become a popular form of currency in today’s consumer landscape, but they aren’t just limited to special occasions and family gifting. They have also emerged as powerful payment methods for businesses to drive customer engagement, reward employees, special payouts and are reshaping the loyalty program landscape as a whole.
The customer journey for a business begins with customer acquisition, and gift cards present an effective way for corporates to get new customers to purchase a product or sign up for a service. Since gift cards, especially Multi-Brand Gift Cards, offer a wide variety of choice and flexibility, they provide a great way for corporates to give incentives conveniently. Following acquisitions, corporates wish to form a deeper level of engagement and retention with customers and some form a ‘loyalty program’ which will help them achieve this.
A loyalty program is a marketing strategy implemented by corporates to encourage customers to repeatedly purchase their products or services. It is designed to reward and retain loyal customers by offering various incentives and benefits based on their continued engagement.
Essentially, loyalty programs are used to build “stickiness” with consumers, make them feel special, acquire data about customer behavior, and are a valuable tool for small and large businesses alike.
Corporates are always looking for new creative ways to incentivize customers. Traditionally, rewards from loyalty programs were merchandise or cashbacks, which is quite limited when it comes to variety and choice. Nowadays, gift cards are being used for flexibility and choice, as well as enhancing current points programs, giving the customers a wide range of brands to choose from, making gift cards a very attractive addition to your loyalty program. Gift cards can also be given digitally, which means better tracking, quicker delivery and more security. Additionally, studies show that recipients of gift cards tend to spend more than the value of the gift card, which increases overall revenue for the business.
By incorporating gift cards into loyalty programs, businesses can further strengthen customer loyalty and improve retention rates. Offering exclusive discounts, promotions, or rewards to loyal customers through gift cards encourages repeat purchases and incentivizes continued engagement. Customers who feel appreciated and rewarded for their loyalty are more likely to remain loyal to a brand and recommend it to others, fostering a positive brand image as well as a positive commercial impact on the loyalty program.
Gift cards allow customers to choose their own rewards, providing them with the flexibility to select products or services that align with their preferences. Additionally, gift cards can be digital, meaning customers can never physically lose their cards, can be stored in a digital wallet or app, and remove the operational hassle for senders. This convenient approach enhances the overall customer experience and strengthens the bond with the program.
Gift cards incentivize customers to engage with a program over an extended period of time. Traditional loyalty programs use a point system, where points have an expiry date and often go unused due to lack of choice. To better increase engagement and improve the program, micro-redemptions are offered to customers which give more choice, variety and serve a lot more customers. Micro-redemptions are increasingly popular within loyalty programs as they offer customers the option to redeem small amount of points towards bigger purchases without having to save up the full amount. For example, let’s say you need to purchase a product for loyalty points worth 1,000, with gift cards, you can submit the points you have (say 100) and simply pay the difference without having to wait to accumulate the total points. Additionally, some prefer to redeem quickly on smaller items such as coffee, food, books, among others. These micro-redemptions improve the overall loyalty experience because there’s something for everyone, with a wider catalog of gift cards to choose from.
Loyalty programs integrated with gift cards offer businesses valuable insights into customer behavior and preferences. By analyzing gift card redemption data, programs can gain a deeper understanding of customer patterns, popular categories, and peak redemption periods. This data can be used to refine marketing strategies and improve overall customer satisfaction and engagement.
Digital Gift Cards have emerged as powerful tools for reshaping the loyalty program landscape. They offer corporates an effective means of acquiring new customers, increasing customer engagement, providing flexibility, and gaining valuable data insights. Simultaneously, customers benefit from personalized rewards,micro-redemptions, and the freedom to choose products or services they desire. By embracing gift cards as a key component of loyalty programs, businesses can foster stronger customer relationships, boost revenue, and position themselves as a customer-centric program in today’s competitive marketplace.