Tag Archives: loyalty programs

restaurant loyalty programs

A High Percentage of Restaurant Customers Report Using Loyalty Programs

With leading brands like Taco Bell and McDonald’s shifting toward pop culture and garnering a spot in social conversation, millennials have made food marketers realize that food is fuel. 

The advent of the global pandemic only complicated the existing connection, however. Restaurants have been asked to ensure safer food delivery while minimizing overall contact. Later, as the category started getting crowded, restaurants all around were expected to execute this in a way that differentiated them across different channels. 

The concept of loyalty programs in the restaurant industry came about in 2020. In most cases, consumers all around link loyalty programs – along with the discounts, convenience, and benefits that they provide – with improved customer experiences. In a recent study, it was revealed that around 69 percent of respondents claimed that loyalty programs brought them back to the restaurant culture. 

An Insight into the Loyalty Programs in the Restaurant Industry

According to one report, it is estimated that around 47 percent of modern diners make use of at least one loyalty program. The overall share of consumers using loyalty programs in restaurants has increased by around 12 percent in 2022. The QSR segment has experienced the highest growth, with 24 percent of chain QSR customers using restaurant loyalty programs in 2022.

The increased utilization of loyalty programs can highlight the increasing number of lucrative reward programs in the modern restaurant industry. There are several restaurant chains that have already launched or improved their loyalty offerings to win over the existing market share, while generating return visits and improved spending. 

For instance, Popeyes has recently come up with their first-ever loyalty program, and McDonald’s is planning to extend MyMcDonald’s Rewards in the upcoming months. Chipotle and Taco Bell are also committed towards enhancing the existing programs. The loyalty programs help restaurants target the consumer base that spends money most and market to them.

The Role of Loyalty Programs in the Restaurant Industry

It is possible that a highly saturated loyalty program can end up turning off some consumers who don’t want to dedicate space on their mobile devices for restaurant loyalty apps. However, it is believed that young consumers especially look forward to taking advantage of such programs. The leading loyalty program consumers are bridge millennials and millennials. They continue signing up for new loyalty programs quickly in comparison to other age groups.

A majority of modern diners do not appear to mind the inclusion of more applications to their smartphones. Around 60 percent of consumers who are already using at least one restaurant-based loyalty program revealed that they would consider spending more money on food orders from different restaurants if they had access to a dedicated loyalty program. 

While a number of restaurants have launched different types of loyalty programs in the span of the past few years, research reveals that there is still more room for growth. Restaurants can still consider improving diner awareness. Both QSR and full-service customers are more likely to interpret program unavailability as a major reason for not using loyalty programs.

The Change in Consumer Behavior

Consumer behavior all around has experienced a major shift towards the concept of digital ordering, and modern habits are expected to stick around. Another report revealed that digital sales will be on the upward scale to span around 54 percent of the entire QSR business by 2025, a 70 percent increase per pre-COVID estimates. As consumers continue adopting the notion of digital ordering, the delivery of a dedicated loyalty program in a digital space can be a great way to incentivize end consumers to ensure returns.

It could also feature trials. According to a study,  around 19 percent of consumers revealed that a loyalty program would be sufficient for them to try out new QSR, and 30 percent of consumers revealed that they would go ahead with downloading a restaurant app to get access to loyalty points. 

Leveraging the Benefits of Loyalty Programs in Restaurants

Restaurants are rapidly turning to loyalty or reward programs to encourage the overall sales – especially amidst the pandemic-induced economic changes, as a number of diners are choosing to eat at home rather than dining out. 

Coupons or loyalty rewards seek the attention of deal consumers. Loyalty programs – like a simple app-based service or a punch card – are aimed at targeting individuals who might have already visited the restaurant. It encourages them to return. 

It is regarded as more budget-friendly to retain a customer than to bring in new ones. Therefore, loyalty programs help in delivering more ROI than other relevant marketing strategies, because it targets the customers directly, and not prospective customers. 

At the same time, customers want to feel special. They are looking for a relationship with the brand and not just to do some transactions. Loyalty programs allow them to enter an exclusive group or club while helping them feel more connected to the brand. When a frequent customer receives an app notification that they have received a meal box combo or a free drink, they are more likely to return while spending money at the restaurant.

Conclusion

There are a multitude of options for loyalty programs for restaurants. It could include traditional punch cards and swipe cards to modern restaurant apps. Regardless of the approach adopted, the loyalty program can help in attracting and retaining repeat customers. 

Repeat consumers serve to be the lifeblood of any restaurant. They could also depict the role of brand ambassadors. A loyalty program is helpful in ensuring that these customers keep coming back.

attraction, conversion, retention business concept

6 Customer Retention Strategies That Can Boost Sales For eCommerce

eCommerce is a bustling industry full of bright, wonderful people who sell all kinds of exciting products that can’t be sold in traditional physical stores. This can make the world of eCommerce fun and exciting, but it can also make it highly competitive. You’re up against millions of other sellers with tons of advantages over you, such as more experiences and more money to invest in website design, packaging, and faster deliveries. 

So, how are you supposed to remain competitive? Well, one way to do that is to look at ways to retain customers. This means getting new customers and finding strategies to get them to come back to your online store again and again so that you can increase your revenue by up to 30%. 

So what are these strategies, and how can you implement them? We’re going to talk about that on this list of 6 customer retention strategies that can boost your sales and make you a top seller in a blink of an eye!

  1. Upsell and Cross-sell

Upsell and Cross-sell are probably the easiest strategies to implement. They’re easy to understand, and you can start applying them right now. These strategies are also some of the most effective since they’ve been shown to increase revenue.

Alright, let’s explain them one at a time. Upselling is simply charging a little extra for a product you’re already offering. Cross-selling is when you get your customers to buy more products than they intended to purchase when entering your online store. 

You can implement these strategies right now by offering special deals and discounts to new customers. Add pop-ups to your website that give rewards to new customers and show more products on a scroll at the bottom, so customers who come in to buy one item can see others they may also be interested in purchasing.

These are the easiest strategies to implement since they only require a few tweaks in pricing and some additions to your website.

  1. Personalization

Every savvy eCommerce salesperson knows that personalization is what turns people into online businesses in the first place. Stores online can offer something that physical stores simply can’t, allowing customers to get special offers, recommended products, and deals as soon as they enter your store.

Having consistent language on your website is the best way to implement this. Pop-ups, scrolls showing limited edition items, and related products can genuinely boost your sales by keeping your customers on the site for longer and getting them to look at other products. Showcasing customer reviews is also a good strategy since it plays into the human bias that if other people liked it, they’ll probably like the product. 

  1. Segmented Loyalty Program

Customer loyalty programs are another fantastic way to grow your business by forming a base of loyal customers that keep coming back and that you can rely on when things get tricky. There are many different types of loyalty programs out there. Some of these include:

  • Point-based programs: these are implemented in physical stores as well, and they’re pretty simple. Every time a customer buys something at your store, they get a certain number of points, and they can later cash in those points for special offers, deals, and novelty products like t-shirts and tote bags! It’s simple, it’s easy to use, and it works. 
  • Spending-based programs: this one is very self-explanatory. If customers spend a certain amount of money at your store, they can get special deals like free shipping or a free gift!
  • Tier-based programs: these are a little harder to implement but just as fun to make! You have different tiers that customers can reach, and each tier comes with certain rewards. The higher they go up (meaning, the more they spend,) the better rewards they can get, which is a win-win for everyone.
  1. Recurring Subscriptions

Do you know why Netflix is so popular? Because it feels like you’re paying close to nothing for thousands of movies and TV shows. By charging your customers a small monthly fee in exchange for special deals and offers, you too are offering your customers the opportunity to spend very little, support your business and get the things they want! 

You can quickly implement this by adding a pop-up on your website that encourages people to subscribe for a small monthly fee in exchange for tons of exclusive deals and new products. 

  1. Customer service

Excellent customer service is the key to making your online business pop. By having an interactive chat available on the website that immediately puts people in contact with one of your sales reps, you can help them by answering any questions they may have (therefore ensuring that they buy from your website). 

This way, you can also offer them discounts and extraordinary deals! This is how you can also get five-star reviews pretty much anywhere. People value excellent customer service, and the better it is, the more they’ll want to tell their family and friends about it, giving you free promotion as well as more customers.

  1. Email Marketing

If you haven’t heard about this before, you need to catch up immediately because email marketing is the future of online sales and sales in general. The problem with eCommerce is that since there are so many online stores, it’s easy for customers to go into one, buy one item and then forget it exists. There are so many choices out there. Customers don’t feel tied to anything unless you give them the incentive to stay with you!

This is where email marketing comes in. By sending new customers emails every month reminding them of special deals, discounts, and offers, you can keep them on your website for quite a while.

By following all these strategies, you’ll be able to boost your eCommerce and become a reference out there!

text sign showing loyalty program conceptual photo marketing effort that provide incentives to repeat customers 174820251

How To Start an Ecommerce Customer Loyalty Program

eCommerce has been steadily rising for nearly two decades. For many, shopping on their laptop or smartphone is the preferred method of shopping. Over the last couple of years, there are numerous ways companies are exploring how to improve the customer experience. There is tremendous competition on price, and eCommerce merchants almost always bear shipping costs. The question remains, how does a merchant differentiate itself among a slew of others to establish and build on the client relationship.

One area that merchants can utilize is an eCommerce customer loyalty program. Such a program has proven to be pivotal in establishing customer loyalty to maintain market share. If consumers already have an affinity towards a brand, they are likely to develop a prime market share for any of its new product launches.

However, businesses have been slow to adopt loyalty programs, let alone a meaningful one. These programs aren’t cheap and require an investment of time to establish and analyze on an ongoing basis to evaluate results. However, it can be made effective with sufficient financial and strategic planning and discipline. Below we look for some ways to optimally start an eCommerce customer loyalty program.

What is an Ecommerce Customer Loyalty Program?

The main idea of a customer loyalty program is to show the customer that they are valued and are an essential part of the company. Although the practice is applied to the relatively new eCommerce field, it dates back to the 1800s, when consumers could earn copper tokens to be later used towards their purchases. A more refined strategy in the form loyalty program has taken shape ever since, quickly incorporated into business strategy in both traditional and eCommerce businesses alike.

Why does your eCommerce business need a Customer Loyalty Program?

There are numerous benefits of businesses adopting a customer loyalty program. These programs increase the profitability, but it also allows the company to build a treasure trove of data on their customers’ profiles and preferences.

Based on numerous research available, three-fourth of U.S. businesses see a positive return on investments from their customer loyalty program, despite an initial outlay to establish the program. The practice is so ingrained in business practices that 63% of businesses track customer retention, referrals, and new companies as a barometer of success and continuously targeted to improve on.

Furthermore, based on dual research by Harvard Business School and Bain & Company, customer loyalty programs improve retention by as much as 5% and profitability by as much as 95%.

Many companies view the costs associated with customer loyalty programs in contrast to customer acquisition costs. If the acquisition price of a new customer is $25 and a loyalty program costs $10 per customer, it is better to focus on retaining an existing customer. At least, the strategy should be maintaining relationships with new and existing customers in tandem. Another benefit is that loyal customers can serve as brand advocates and sources of new referrals. They effectively do the marketing for you, for free!

Types of Customer Loyalty Programs

So, what are some ways your business can implement an eCommerce customer loyalty program?

Points system

A points-based loyalty system is one of the most common loyalty programs in practice. Customers earn rewards points based on their purchases. Those points are then used to discount new purchases, give away freebies, or qualify customers for promotional offers.

Spending program

In this program, the rewards or benefits are more targeted. Customers maintain a certain level of spending within a specific time and are either given store gift cards or store credit.

Tiered Loyalty Program

One of the most preferred loyalty programs by eCommerce customers is the tiered loyalty program. As the name suggests, it is a system through which customers move up in a hierarchy based on their spending history. Each tier of the system earns customers additional benefits. The higher the tier a consumer achieves, the more exclusive and VIP the tier becomes, the better the rewards available.

Customers prefer this loyalty program because the status signaling a higher tier of the program brings a form of bragging rights. Customers are also likely to spend more simply to maintain their position within the loyalty program, especially if it is a level that requires a certain level of spending and time to reach.

A Hybrid Model

Another customer loyalty program incorporates elements of all other programs mentioned above. It is more data-driven to offer a certain number of discounts to a particular segment of customers or offer exclusive promotional offers to an upper tier of loyal customers.

An eCommerce customer loyalty program is a great way to build and maintain customer relationships and extend customer lifecycle value. A customer loyalty program has been very effective in establishing customer retention and market share. Customer loyalty programs have also been effective in launching new products as there may be a readily available addressable market based on your existing loyal customer base.

Businesses have been quick to act on loyalty programs. Many are clear on the benefits of such programs, as their companies’ long-term profitability and viability depend on a first-class customer loyalty program. As a result, such program’s KPIs are carefully tracked and have been very effective in engaging with customers to establish a feedback loop.

Improve Your E-Commerce Site

Eight Impactful Strategies to Improve Your E-Commerce Site

Every business today must be online. It’s crucial to survive given the landscape of the pandemic. Many businesses either weren’t online or had a small online presence that wasn’t enough to compete in today’s competitive marketplace.

To meet or beat the competition, your e-commerce site must have the following.

Customer Loyalty Program

What incentives do you have to bring customers back? Sure, one-time customers are great, but if you want your marketing efforts to do double-duty, start a customer loyalty program. Whether it’s a points system or you offer specials for each purchase – give shoppers a reason to try you again.

Cross-Sell

Don’t stop your marketing efforts on the product or service that a customer buys. Use the opportunity you have while you’re in front of them to cross-sell or even upsell. Offer more options before they check out – it’s like the candy and gum at the register, sometimes buyers can’t resist.

Make your Site Look Trustworthy

Your site must look legit and the only way to do that is to use words like secure and HTTPS. Test your site on all browsers and with all antivirus programs to make sure it gets through even the toughest security. If customers think their information is even remotely at risk, they’ll bail.

Make Searching Simple

A complex website is like making your store hard to navigate. No one will shop there. Make your home page and product selection are easy to sort through. If shoppers can’t find what they’re looking for fast (within seconds), they’ll go elsewhere. Make your website user-friendly.

Add Live Customer Service

Customers want instant gratification and that includes when they need help with your products or services. An instant chat feature, even if it’s a bot, will help keep their mind at ease. If customer service is hard to find or get to, customers will go elsewhere.

Make Contact Information Easy to Find

Don’t make customers hunt for your contact information. If you don’t have a chat option, make your phone number and email address easy to find. Put them on every page so customers see it and can contact you with questions.

Use Technology to your Advantage

Show off your products in ways you couldn’t in store. Create videos or share your products on social media. Get the word out and let people share. There’s something about videos that makes them go viral versus just pictures and words, so take advantage.

Add Customer Reviews

Nothing sells a product more than others talking about it. Let customers leave reviews on your website or copy and paste them from your social media feeds. Showing that others are using and loving your products is like free marketing.

Improve your E-Commerce Site for the Best Results

Business is competitive today. You have to stand out to get new customers and keep your loyal customers. Existing online seems overwhelming, but once you see the potential it offers, you’ll enjoy finding ways to keep your customer happy too.

NFC loyalty down by contact for Google [2023 Update]

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Google Wallet dropped NFC Loyalty Points and Gift Cards

Google recently announced fundamental changes to its Google Wallet service. On August 21, Google Wallet stopped supporting NFC redemption for gift cards and merchant loyalty points. In these competitive times, more and more businesses have come to rely on loyalty programs to spur consumer activity. By simplifying the point-of-sale experience, NFC payments are supposed to optimize loyalty programs for mobile shoppers. The new changes to Google Wallet may make some companies rethink joining Google’s bold experiment in merchant services.

Though Google says it is looking for new ways to process loyalty and gift cards, no details are available as of yet. Nor has Google revealed a specific reason for scaling back its mobile wallet service. Furthermore, this newest change caps a string of high-profile personnel shuffles and policy changes for Google Wallet. In the wake of embarrassing security issues, Google discontinued its virtual prepaid debit cards last year. Since prepaid cards are gaining popularity very quickly, Google’s move inspired curiosity and controversy alike. In May, many observers were startled by the sudden departure of Osama Bedier, the vice president and public face of Google Wallet.

The story of Google Wallet demonstrates the complex pitfalls of pushing technological innovation in merchant services. For years, Google has boosted NFC technology as a game-changer for the mobile wallet industry. Though the company remains officially committed to NFC-enabled point-of-sale transactions, the changing dynamics of Google Wallet could herald future troubles for the payment system. In 2013, the public is increasingly worried about privacy and security issues. As details emerge about corporate involvement in NSA snooping and surveillance, many are wondering if Google is fully committed to safeguarding customer data. For many, these concerns may overshadow and obscure the security advantages of Google’s NFC-powered transactions.

Deeply invested in NFC technology, Google’s course is innovative yet arguably too experimental for many companies. Even forward-thinking carriers and vendors have limits to their adaptability. If Google Wallet’s limited market share is any indication, many smaller merchants are still unsure about the practicality of adopting NFC payments.

Are Credit Card Rewards Points Programs Harmful?

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Over the course of the past ten years, credit card providers have ramped up their efforts to woo consumers with point-based loyalty programs.

Custom gift cards and loyalty cards are a great way to encourage repeat business and so many merchants have embraced the concept that the credit card providers have pushed. These redeemable Transaction Cards let customers make flexible decisions when purchasing goods or services from a merchant.

Early in the history of credit cards, most financial institutions were too dignified to offer game-like rewards systems involving point accumulation. As time went by, it became increasingly clear that nearly all types of credit card users were energized and excited by point systems. In the early part of the last decade, easy credit led to a dizzying proliferation of rewards programs. Although credit limits and eligibility requirements have tightened in recent years, credit card issuers maintain loyalty programs as integral parts of their marketing initiatives.

On an individual, case-by-case basis, rewards programs create very attractive incentives for customers. The public record abounds with stories of individuals who use reward points to gain earn free flights, hotel stays and other financial advantages. Collectively, some loyalty programs inspire widespread exploitation and abuse.

Since point-based reward programs are textbook examples of gamification, it is little surprise that many program members are gaming these systems irresponsibly. These individuals have perfected cunning “ghost transactions” that earn points without adding real value to the economy.

One popular technique is to purchase numerous gift cards with credit, only to use the gift balances to pay off credit card balances in a circular fashion. Though most of these schemes are technically legal, they consume manpower and resources in an exploitative manner. Point churning is a zero-sum game that leads to more expensive payments processing for retailers. Ultimately, many of these increased costs are passed on to the general public.

Point system abusers only account for a small percentage of loyalty program members. Even for ordinary users, rewards programs aren’t always as beneficial as they first appear. Individuals who use loyalty programs need to read and understand the fine print of program rules and regulations. In many cases, gains from cashing in points are fully offset by the costs of using additional credit. At their best, loyalty programs are engaging systems that spur responsible spending. However, economists argue that aggressive rewards programs can distort incentives and upset natural credit use patterns.

Here at Host Merchant Services, we are sensitive to how responsible credit card use contributes to the health of the broader economy. We provide our customers with tools to better understand and fulfill the needs of the public. Flexible, responsive payment processing encourages consumers to use credit with caution and care.

Loyalty Card Processing

Loyalty Card Processing [2023 Update]

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Loyalty cards are an important part of modern business when it comes to payment processing. As e-business becomes more prolific and consumers have more options available, it becomes vital to retain repeat customers. Attracting new customers is just as important. Perks go a long way to doing both. Loyalty card processing can provide coupons, gift cards, discounts, and other features. Things that make customers want to come back for more business.

Attracting and retaining customers can be difficult without simply cutting prices – not always an option in an increasingly hostile economy. Loyalty cards and gift cards drive customers to return to your place of business without cutting into your bottom line. Consumers are more likely to return with a loyalty card in hand than they are without one. Why? They help build relationships with your target demographic. People feel appreciated when their business is rewarded, which in turn drives sales. Strengthening customer loyalty is the key to keeping them coming in your door instead of going to your competition.

Loyalty cards also allow you to step into the arena of targeted marketing. Every sale your customers make with your loyalty card enables the collection of data – what sorts of people buy what sorts of products, for instance. This knowledge can be invaluable. Even a little insight into your customers’ habits can enable you fill their needs better.

In addition to the obvious benefit of repeat business, loyalty cards also encourage increased spending. Most loyalty programs are dependent on a percentage of sales; e.g., after a certain dollar-value of money is spent, a reward is given. Even in the case of direct discounts (such as a card that saves cardholders 5% each visit), greater savings are observed as more money is spent. It’s a great way to encourage your customers to spend more with you.

Gift cards are another great device for boosting sales. Panicked gift-buyers know one thing – they want to leave your business with a gift, even if they aren’t sure what they want. Gift cards are a great answer to the problem and they safeguard that an unsure customer won’t walk away from your business empty-handed. Gift cards also provide immediate cash flow up front. Each card purchased is money in your pocket, and peace of mind for your customers.

Even after purchase, gift cards can help drive sales. Since they are usually given – as the name implies – as gifts, they bring new customers to your business (and another chance to sell your loyalty card). Most consumers who use gift cards spend more than the value of the card. This translates into more profit for your business.

We live in a digital age. Loyalty card processing and gift card processing are facts of life for modern businesses. Enhancing your point-of-sale transactions with profit-boosting electronic features is important to stay competitive. Attracting consumers with gift cards and keeping them with loyalty programs are cheap, effective ways of boosting your business.

Merchant Tips to Keep Business Booming [2023 Update]

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As a merchant, things should be off and running for you right now. Black Friday has come and gone. Small Business Saturday has burned brightly. And Cyber Monday has counted its clicks. Holiday Shopping Season 2011 is officially underway no matter what metric you use to note the start.

The Official Merchant Services Blog is here to help you maximize on the rest of the shopping season. Just because Cyber Monday has come and gone, doesn’t mean your e-commerce solution is on cruise control. This is the time of year that payment processing bulks up as consumers still rush to find those perfect gifts for loved ones and friends.

It remains important to help continue to drive traffic to your website or through your front door, and keep the holiday shopping flowing. We’re going to offer you some tips on how to maximize that business and ride the wave of the holiday blitz.

Hire More Help

Whether you are running your business completely online, through a brick and mortar storefront or  both, the holiday shopping season will add a lot more sales for you to process. And that adds more strain and stress to your daily operation. Don’t be afraid to hire more staff, even temporary staff, to help see you through the season. The long-term benefits of a smoother, customer service friendly, holiday shopping season will offset the cost of the new help. And as numbers keep rolling in from Black Friday and its subsequent shopping focused events, it looks like 2011 is going to be brisk and bustling with business.

Give Your Customers Incentives

Just because the big “deal” hunting days are over, doesn’t mean the incentives stop for you. Continue to come up with new incentives to give your customers. Find new deals and new programs you can tie into the holiday shopping season. Seasonal coupons? Gift Certificates? Gift cards and loyalty programs? Bonuses for specific payment, such as Host Merchant Service’s Add Discover on Discover Program? All of these are ideas that can help you continue to attract more business through the holiday shopping season.

Continue to Push Marketing Campaigns

Small Business Saturday offered a lot of free and useful marketing materials. Black Friday practically markets itself. But the rest of the Holiday Shopping Season is wide open for marketing campaigns –– long and short term. Now’s the time to consider something quick and flashy like a coupon ad through Groupon or Living Social. Be creative and keep pushing the marketing. It will continue to drive your business through the holidays.

Pay Attention to Pricing

Black Friday and Cyber Monday sales figures show that shopping is very healthy right now as consumers have hit the ground running with their holiday shopping lists. But many consumers themselves keep reporting to the media that they’re being much more savvy this year. They’re looking for the best deals and comparison shopping. The boost in online and mobile shopping –– which makes comparing prices as easy as opening a new tab and clicking a button –– has consumers looking at the price tag. So roll up your sleeves and do your homework. Now is the time where you find out what pricing adjustments you need to make (raising or lowering them) to stay competitive against the deals being offered. Just as it’s become easier for your customers to comparison shop, it’s also easy for you to stay on top of prices.

Keep Your Eyes Open

The internet is being used by your customers. And you can use it too –– for a lot more than just staying on top of what your competitors are pricing goods and services at. Learn what strategies and campaigns they are doing. Or what strategies and campaigns other businesses that aren’t competitors are doing. Be open to finding any extra information that can give you an edge. You can do this web surfing or participating in social media like Facebook or Twitter or even just talking to your customers face to face when they walk into your store.

These are just a few quick tips that barely scratch the surface of what you can be doing to keep this holiday sales boost going. What other ideas have you heard of? What ideas have you seen, or used, that haven’t been working? Do you think the brisk sales will continue or will the holiday shopping season start to fade quicker? Feel free to share any comments you might have on the topic.

Merchant Services: Why Should You Offer Gift Cards?

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Today The Official Merchant Services Blog continues its ongoing series to get you ready for the Holiday Shopping Season. A previous blog entry looked at the next big thing, virtual gift cards. But we figured we’d take a moment to focus on the old school mainstay, and offer insight into why merchants should offer their customers regular old plastic gift cards.

The Numbers Are Telling

Getting the obvious out of the way first: Gift Cards, Gift Certificates and Loyalty Programs are big business. According to one report, businesses sold $23 billion in gift cards in the U.S. in 2010.  The consumer perspective is pretty straight forward: they are convenient for both the shopper and the recipient of the card. This blog article here goes into detail about why they are convenient and popular with shoppers.

But what about your business? Why would gift cards and loyalty programs be good for your business?

Here’s a rundown on some of the most prominent reasons to start running a loyalty program and offering gift cards:

Increase in Sales

You’re about to see a lot of new foot traffic (or click traffic if you’re reading this from an e-commerce perspective). And a gift card program will heighten the sales potential you have this Holiday Shopping Season. From impulse buys to people who just aren’t quite sure if the person they’re shopping for has a particular item, the gift card steps in and provides more chances for consumers to purchase something from your store.

Getting Sales Referrals

Gift Cards take two to tango. The person buying the card, and the person receiving the card, are both potential long-term customers for your business. It could be that the person buying the card knows the recipient likes your store but doesn’t know what specifically to buy from you for them. Or it could be the other way around, and the gift giver likes your business and wants to introduce the recipient to your goods or services. The real power in gift cards is that they inherently refer your business beyond just one customer shopping one time.

Free Marketing Tool

A Loyalty Program and the Gift Cards you run through it are powerful forces for the marketing of your business. Building off of the previous point of the ability of the cards to refer new business, Gift Cards put your brand and your business out there for new customers and for repeat customers. A good loyalty program spreads the word about your business with each individual gift card.

Customer Retention and Business Events

You can also use Gift Cards as rewards in events or campaigns your business engages in. Or just simply use them as rewards to loyal customers. The goal of long-term customer retention is made that much easier when you have the power to give back to your customer in such a way that it keeps them coming back. The customer gets the gift card in appreciation of their business. And then comes back to you to use it for more purchases.

The Opposite of ‘Breakage’

Breakage is described in this blog about gift cards as people purchasing a gift card, and then the card not being used. It often gets touted to merchants as a way to make money on gift cards as that is money being spent on future purchases in your store that never get made. So just using straight mathematics, you make more money from breakage. You get to virtually sell items more than once. But as that blog points out, the benefits of good loyalty programs and gift cards are really focused on lowering the amount of breakage.

You want the card to get used. Why? Because people tend to spend more than the gift card is worth. It’s been reported that consumers who do use gift cards tend to spend an average of 35% more than the value of the card. Which makes a lot of sense from a consumer stand point. Gift Cards let them make purchases on expensive items they may not have initially thought were in their price range. Simply put, you have a $50 gift card to a store you like, that $100 item you had your eye on seems a lot more within reach.

You want this business. You sell more than you initially sold the card for. And you cultivate long-term relationship potential. Breakage looks good in black and white numbers, but the goal is get happy customers that keep coming back to your business.

Get Going with Gift Cards Now

Those are some of the very basic reasons why Gift Cards and Loyalty Programs can help give your business a quick boost right as we enter the Holiday Shopping frenzy. Host Merchant Services offers a robust set of services to help you process gift cards quickly and easily. The company takes the hassle out of the process with complete turn-key solutions that are focused on increasing customer loyalty for you. And we offer tiered branding customization options for the card program you select. For more information on what Host Merchant Services offers, you can click here.