Big decision: Choosing the right gift card for your customer loyalty program
There’s no doubt that customer loyalty programs have become an integral part of the sales and marketing mix. With more than 2.6 billion loyalty program memberships in the U.S. alone, it’s become clear that customers gravitate with gusto toward the opportunity to earn rewards in exchange for their loyalty to a store, a brand, an airline, etc.
In fact, 34% of customers surveyed in a Social Annex research report stated that they wouldn’t be loyal to a business if it weren’t for that company’s loyalty program.
Among all customer loyalty program rewards, gift cards rock. Next to reward points, gift cards are the second most prevalent form of direct rewards in all customer loyalty programs, according to a 2016 study by Incentive Federation Inc. (IFI), with 51% of companies employing gift cards in their customer loyalty reward mix. Gift cards represent a $4.7 billion share of the total customer loyalty reward market, says the IFI study.
However, it’s important for companies to ensure that their loyalty program gift card reward brands synch well with their customers, or run the risk of losing loyalty program membership. A Colloquy 2015 study notes that the top reason people stopped participating in a loyalty program is that the program did not provide rewards that were of interest.
National Gift Card’s 2017 gift card report, in detailing the most popular brands and uses for gift cards, notes that participants in loyalty programs often gravitate towards rewards they can use to stretch family budgets. “For instance, gift cards for shopping, dining, home or automotive needs that can be used for everyday essentials,” the report says. “The top gift card selections conveniently match consumer desires to save money.”
Gift cards play a starring role in loyalty programs. Having a unique selection of gift card reward options tailored to the program and its audience is key to the program’s success and engagement level. Knowing your customers and their interests can go a long way towards making your loyalty program a cornerstone to enjoying repeat business from delighted customers.
Our team of NGC gift card experts stand ready to work with loyalty program administrators to create the most appropriate portfolio of gift card brands for rewarding loyalty program members. Contact us to learn more.