As a small business owner, you are heavily focused on doing things to retain and attract new customers. Without infinite resources, you have developed some pretty creative ways to get the word out about the white-glove approach to customer service that you provide, and you have finely tuned the product offerings you deliver. But is there still something missing? Have you overlooked the opportunity to add a dynamic, customer attracting tool to your toolbox?
Gift cards, both re-loadable or onetime use, will give you the ability to easily attract new regular customers to your business. When an existing customer gives your gift cards to others, it is instant validation for your business and provides a referred seal of approval. Utilizing POS system gift card management functionalities will be invaluable in helping you to accomplish these goals through the unlocking of some exciting new customer enticing options.
Gift Cards Can Be Used to Improve Customer Retention
A number that sits in the minds of most small business owners is that it is six times more costly to attract a new customer than it is to retain a current customer. Doesn’t it make sense then to first focus on building deeper relationships with your regular customers before stretching yourself thin trying to find the right angle to use to attract a new customer? A great way to do this is by offering gift cards with a rewards bonus attached.
For example, say that regular Customer “A” has been a longtime regular, but you have noticed that purchase amounts have started to grow smaller. After making some small talk, the customer references how your rewards program has been overtaken by a competitor down the street. Although the customer still wants to do business with you, given your long history, the customer has found themselves splitting their patronage 50/50. This is where your gift cards and rewards program comes into play.
In addition to the obvious response of matching the competitor’s rewards program, what if you offered 25% more rewards points on the purchase of a gift card? And what do you suppose would happen if, when the recipient of the gift card uses it, you match the rewards points from that purchase? You would gain back your business from customer “A” while making a powerful and lasting impression on the gift card recipient, who in turn will most likely become regular Customer “B.”
Leveraging Gift Card Purchasing Data to Adjust Products and Services
The redemption of gift cards introduces a new wrinkle into the data analysis that a modern POS solution offers. The data from your regular customers are very helpful in providing you insights into how their tastes are evolving, but gift card users are likely not regular customers and thus introduce new variables to making determinations about your products and services. These may lead you to make slight adjustments or make you want to totally revamp what you currently have in place. Here’s why.
We have already covered that gift card users will most likely be new customers to your store, and will likely act on the recommendation of a regular customer in terms of how to use it. This information is valuable to you in a couple of key ways:
- You will be able to see if specific customers have a higher redemption rate of the gift cards they purchase than others. This will tell you who your best customers are in spreading the word about your business.
- You gain the ability to separate the transaction data of gift cards from all other sales. This will help you see if certain products only seem to sell to gift cardholders, or if the users of gift cards share similar purchasing traits to your regular customers.
- All of this information can be used to create specials and promotions to attract these new customers to become regulars, as well as to give you the information required to make inventory changes that build up your brand voice.
Consider Gift Cards as Free Marketing to Expand the Reach of Your Brand
The sum of all of this is pretty clear: gift cards are a great way to gain a powerful, and largely free, marketing tool. Using gift cards to promote your brand gives you some crucial information from people who may, or may not, have ever entered your place of business before. Gift cards can yield intuitive, in-depth data points that can be capitalized on to retain the business of a one-time gift cardholder. And, it is highly likely that this new customer will refer others to you in a similar way.
Designing a POS system that gives you the ability to easily manage a gift card strategy gives you a comprehensive marketing tool. Getting this tool right at the moment you start using it is crucial to its success, making it imperative to seek an opinion from an experienced POS software consultant. They will have high levels of knowledge into how modern POS solutions can work with gift cards and can merge this with your particular business needs to build a gift card strategy that yields benefits for years to come.
The POS experts that talech has to offer will give you more than just technical guidance. We will use the wisdom gained from business scenarios which are similar to yours to develop a gift card program that will maximize your brand voice and attract new customers. Contact us today to sign up for a demo and to learn more about how talech can be your valued POS partner.