During and post the Covid-19 pandemic, consumers are increasingly refraining from visiting physical stores. Online businesses have grown faster and more sophisticated than ever and hence people of all age groups are leaning toward online shopping.
This has hugely affected shop owners who do not rely on online business. If you own a store, you’re certainly looking for strategies to expand your clientele and draw in additional clients. Giving out gift cards to customers is a fantastic strategy to achieve this. Gift cards for stores are gaining popularity and can offer several advantages to shop owners who want to encourage customers to visit their stores.
Giving out gift cards to consumers is a thoughtful way to express your gratitude for their loyalty. Customers are more inclined to keep coming back to your business if they feel valued. A survey by the National Retail Federation found that 91% of customers said that they felt appreciated when they received a gift card.
Here’s how businesses can benefit from giving away gift cards to customers.
1. Boosts Customer Loyalty
Gift cards can be a powerful tool for increasing customer loyalty in the corporate world. Customers who receive gift cards for stores are more likely to visit them again and make further purchases, according to research.
A National Retail Federation survey revealed that 58% of customers who received gift cards bought more products from the seller. As a result, gift cards can broaden your clientele and encourage repeat business from existing clients.
2. Increase in Average Order Value
Another benefit of giving away gift cards is that it can help you to increase the average order value of your customers.
The average order value (AOV) is a crucial metric in e-commerce and retail that measures the average amount spent per transaction. It’s calculated by dividing the total revenue generated by the number of orders. AOV gives businesses a snapshot of the average value of each transaction and provides insight into the effectiveness of their pricing and marketing strategies.
Customers are more likely to spend more than the value of a gift card when they receive gift cards from businesses. Giving a consumer a $20 gift card, for instance, can result in them spending $30 or more in your shop. This implies that simply by giving out personalized and branded gift cards, you can boost both your sales and your profits.
3. Attract New Customers
Customers are more likely to recommend your brand to friends and family when they receive gift cards from stores. This can help to build your consumer base and spread word of mouth. Customers who receive gift cards are also more likely to give them to others, according to studies, which may help you reach even more potential clients. Gift cards are not just a simple “thank you” gesture, but they can have significant benefits for the business itself.
4. Target Specific Demographics
Additionally, gift cards give businesses a chance to target particular demographics. For instance, a company can provide gift cards to students to draw in a younger clientele. Or, to draw in families with young children, a company might present gift cards to newlyweds.
Businesses can adjust their marketing strategies and draw in clients who are more inclined to make purchases by focusing on particular groups.
5. Employee Rewards
Businesses might provide employees gift cards that can be redeemed for goods or services offered by the company instead of cash bonuses or tangible gifts. This not only helps the company save time and money, but it also gives the workers a reward they can use and value.
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Gift Cards For Different Businesses
So, what businesses can benefit from giving away gift cards? Well, pretty much any business! By giving out gift cards, businesses can attract repeat customers and increase their sales. Businesses can also offer gift cards to drive sales during slow periods.
By offering a gift card with a purchase, businesses entice customers to make a purchase they may not have made otherwise.
Now that you know how gift cards can positively impact businesses in general, let’s narrow down and explore how each type of business can benefit from giving away gift cards with the help of some statistics and examples.
- Retail businesses can use gift cards to draw in more consumers and boost sales. For instance, a clothes retailer may offer a gift card with a $100 or higher purchase. Customers are not only rewarded for their purchase but are also encouraged to come back to the store so they may use the gift card.
- Restaurants can issue gift cards to encourage repeat business and cultivate customer loyalty. A restaurant might provide a gift card as an incentive for spending $50 or more. Customers will be rewarded for their visit, and it will also tempt them to come back to the restaurant so they may use the gift card.
- Service-based businesses, such as hair salons and spas, can offer gift cards as a way to attract new customers and increase sales. For example, a hair salon can offer a gift card with a first-time visit. This encourages customers to return to the salon for future visits.
So, there you have it! Gift cards can benefit businesses in a variety of ways, including increasing customer loyalty, driving sales, targeting specific demographics, and rewarding employees. And, best of all, gift cards can be used by any type of business, from retail stores to online businesses.
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