Keeping in Touch
Customer
tracking and card distribution are
keys to success for loyalty programs
QSR Magazine - Sept. 2010
By SmartChains
Even as new opportunities for marketing through social
networks arise, the downturn in the economy has presented
challenges to retailers to keep their customers. Many have
found it useful to use their gift or loyalty card customer
databases to communicate with their customers and provide
tailored incentives to lure them back into the restaurants.
This is especially important when consumers are cutting back
spending, especially for nonessential retailers such as
restaurants.
It's been interesting for us as well, says Philip Levy,
chief business development officer at Givex, a global
provider of gift, loyalty, and other customer-connecting
technologies. For some, it could be a blessing in disguise
because it can encourage retailers to truly connect with
their customers.
In lean economic times, Levy says, it is vital for retailers
to communicate with their customers and maintain that
all-important connection. It could be something as simple as
reminding customers about low prices or providing incentives
for them to come into the restaurant and treat themselves.
Our business is about helping our clients connect with their
customers, providing intelligent tailored incentives that
provide concrete reasons why they should come in, Levy
says. Simple, dated gift and loyalty programs are not good
enough in an increasingly challenging economy. Advanced
gift and loyalty programs can be invaluable to businesses,
Levy says. First and most important is acquiring new
customers and then transitioning them to be regular
visitors. To create customer loyalty, you need to find out
who your existing customers are, and then take smart steps
to retain them. Part of this strategy is to gather as much
information as possible about them without being intrusive,
and learning how to get them to come back and visit
regularly.
Technology allows retailers to communicate with their
customers with acquired knowledge, Levy says. You can
incent them to change their behavior. Ask What will bring my
customers back? In a down economy, these things become more
important.
For example, some regular customers might only make a
regular coffee purchase, so a coupon for a food item, such
as a pastry or breakfast sandwich, can offer them a new
reason to return. This is a more sound strategy than sending
blind incentives that have no personal appeal. Understand
your customers, and then look after them, Levy says. Some
get pigeon-holed into the same gift and loyalty strategy.
The financial crisis woke people up.
In this down economy, consumers are often looking for
excuses to treat themselves. A gift card offering a meal at
a restaurant or even a free dessert might be all it takes to
get that customer back into their favorite restaurant or
even to try a new one.
In today's economy many consumers are only spending money on
budgeted items, says Pam Gerhardt, senior director of
marketing at Illinois-based SVM, a leader in the gift card
and incentive industry. They are especially willing to enjoy
an evening out if someone else is paying for it.
SVM manages the purchasing, distribution, and inventory for
several major brands of gift cards for business-to-business
sales, business-to-consumer sales, and third-party outlets.
Distributing cards in bulk can be very effective for
fostering customer goodwill and, in turn, building the
brand.
Many businesses offer its employees restaurant gift cards as
a reward for a job well done, for being regular in
attendance, or for meeting sales goals. In addition,
businesses can use gift cards as an incentive to get
potential buyers to test drive a car, for referring
business, opening bank accounts, or even taking a survey.
Sometimes, an offer to be entered into a drawing to win
$10,000 might not be as much of an incentive as a free
dessert or appetizer, Gerhardt says.
As the gift card business evolves, getting those cards into
the hands of customers is getting easier and quicker. An
e-gift card can be purchased on the Internet and delivered
immediately via e-mail. Restaurants are at the forefront of
successfully offering e-gift cards. SVM offers bulk e-gift
card delivery services to businesses that wish to purchase
e-gift cards for multiple employees or customers. These
cards can be personalized to the recipients and electronic
delivery can allow for more efficient and less expensive
mass distribution than previous methods.
It is a quicker way to get gift cards out there, and to get
them redeemed quicker, Gerhardt says.
Full Potential
There still is a lot of potential for ROI on gift cards,
says Michael Breetzke, marketing manager at Opticard, a
global provider of gift and loyalty card processing
services. The ability for a business to connect with its
customers and understand their needs and behaviors is
increasingly important.
When a business can target the consumer's specific wants and
needs, you're taking the right steps to optimize your
marketing efforts, Breetzke says. A neat feature of the
Opticard platform is the ability to capture demographics
through a customer registration page, and then track their
behavior through online reports. Features like these give
businesses unique ways to understand their customers.
Once a business can understand how to best serve their
customers, better results will come for both parties. And
with the technology and communication channels that exist
today, every business should be asking themselves how well
they're integrating text message marketing and Facebook, for
example, into their card programs.
As a back-end processor, Opticard provides a full range of
client services and support for its customers, from card
production to POS integration to real-time reporting through
an easy-to-use merchant web portal. Plus, with its
flexibility, every customer has the freedom to choose the
program features they want and need the most. Opticard has
multi-channel expertise in helping retailers to market and
merchandise their gift and loyalty card programs through a
variety of distribution channels, including in-store,
online, via third-party mall partners, and with mobile
services.
Give them the Business
Putting the product directly into the hands of consumers by
the use of gift cards is a great way to get the brand
message out, and while individual purchase of gift cards
accomplishes this in small increments, gift cards can be
more successful when distributed on a large scale. Such mass
distribution is possible by providing gift cards to large
businesses.
Companies can buy preloaded or prepaid gift cards in bulk to
take advantage of volume discounts and use these cards for
distribution to employees or loyal customers. Some cards can
also be reloaded once the initial amount is used. Card
values range from $5 to $500, with prenegotiated discounts
off of face value for the business customer. Since the
average monetary activation for quick-service restaurants is
about one-third of that for other retailers, they can offer
a good marketing device at a modest price.
National Gift Card (NGC) is the leading retail gift
card marketer, distributor, and fulfillment agency in the
b2b marketplace and for nontraditional fundraising programs.
NGC markets more than 175 nationally recognized
retailer gift cards around the country with aggressive
discounts and complete fulfillment to businesses for
corporate incentives, motivation, recognition, and
performance programs.
NGC has focused its effort on driving the
quick-service restaurant category.
Our retail partners recognize the success to market their
gift card outside of their locations, says Rick Rubin,
vice president of strategic partnerships for NGC. NGC
offers our retailer partners the ability to market their
gift cards to corporate incentive programs, recognition
programs, and nontraditional fundraisers, such as schools,
churches, or clubs.
NGC offers its retail partners a full selection of
cost-effective marketing opportunities, all managed by
NGC's
marketing department, that can further enhance the
visibility of the gift card, Rubin says. This helps take
retailers beyond their existing customer base to maximize
their exposure and sales.
Gift cards are also great tools to use in company incentive
programs, says Ron Beverly, president of Vision Marketing, a
Virginia-based company that specializes in printing and
promotional marketing solutions for the quick-serve
industry.
Corporations large and small use them as thank-yous and
incentives to their employees for reaching sales goals or
for a job well done, Beverly says. They also make great
thank-yous for clients. What better personal endorsement
than when your company or business associate hands you a
card promoting a local restaurant?
Another creative idea is to use gift cards to partner with
other local businesses, Beverly says. For example, a pizza
client is partnering with a local cable company in its town.
It is using Vision Marketing's Peel-ADeal product in its
promotion, which contains 16 peel-off coupons on the back of
the card, and one of them is for a free pizza with no
strings attached.
The pizzeria gives about 400 cards a month to its local
cable provider in exchange for free commercials. The cable
company then uses the cards as incentives to get in the door
with prospective advertisers.
What is unique and sets the Peel-A-Deal product apart from
our plastic cards is that it features multiple offers and
drives multiple visits off of one promotion, Beverly says.
Times are hard and folks are trying to save as much money as
they can, wherever they can. There is no better time to
harness the power of gift and loyalty cards.
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