Selling Loyalty, Gift Card & Reward Programs

What Are We Talking About Today?

• Gift Cards• Loyalty / Rewards Programs• Marketing Programs

(Couponing & Mobile Marketing)

WHY WOULD A MERCHANT WANT A LOYALTY, REWARD OR GIFT CARD PROGRAM?

Compete With Big Box Retailers

Competitive Pressures

Keep Up With The Competition

– Kohl’s Cash • Expiring future cash rewards based on current

purchase amount

– Dunkin Donuts• Buy 9 cups of coffee, get one free

– Best Buy RewardZone • Earn points based on purchases toward gift certificates

– Famous Footwear • Birthday coupons

How Does This Benefit The Merchant

• Increases Revenue

• Increases Retention Rate

• Easy To Use

• Cost Effective

Loyalty Statistics

• Increase same store sale – 4.5%

• Increase retention – 14%

• Increase average purchase and visits – 24%

Gift Card Statistics

• Average gift card load - $28.54

• 75% of gift card shoppers spend 60% more than the value of the gift card

• Breakage – 18%

FIVE MOST POPULAR PROGRAMS

Club Programs

• A lemonade stand offers 5 glasses of lemonade for a pre-purchase price of $2 versus individual glasses for 50 cents each (Savings of 50 cents)

Discount Program

• A promotion states if you spend $500 you get $150 off, $250 you get $75 off, and $100 get $25 off

Punch Card

• When you buy 10 ice cream cones at an ice cream parlor your 11th is free

Cash Back

• When you spend $75 you get $10 loaded back on your loyalty card

Custom Programs

• When you spend $100 on merchandise you receive a free karate lesson

ADDITIONAL FEATURES

Mobile Marketing and Communication

• Text and Email – coupons or special reminders (customized)

• Send broadcast message or single message at the point of sale

• Send messages based on program parameters

Social Media

• Merchants can connect cardholders to their social media site

• Award points for tweets and posts

Merchant Portal and Reports

• Collect a cardholder database• Transaction reports• Liability reports

• Store basic demographic information and custom fields specific to that merchant

Web Terminal

• www.mywebterminal.com

Cardholder Portal• www.getyourbalance.com

Custom Artwork

Before After

Sole proprietor

Small Business

What’s On A Merchant’s Mind

• Growth!– Keep current customers

coming back

– Acquire new customers• Persuade them to come back

– Persuade them to spend more

– Persuade them to be an advocate

• Costs!– Limited time

– Limited expertise

– Limited money

Marketing

• Email Marketing (Constant Contact) $ 15/month • Text Messaging (Street Savings) $ 40/month• Coupon Circulars (¼ page ad) $300/month• ValPak (10,000 homes) $350/mailing• Postcard Mailing (1,000 pieces) $500/mailing• Local Newspaper (¼ page ad) $200/week

Present Your Case – Loyalty

• Increase same store sale – 4.5%; If your business has an average annual revenue of $360,000, you should be able to increase sales by $16,200

• Customers that carry a loyalty card will spend 24% more per visit i.e. if your average purchase per visit is $50 today, You should be able to increase this to $62

• Most merchants use ValPak as a marketing vehicle - $350/mailing for 10,000 homes. With a 2% response rate = $1.75 per responding household; Using text message you should have a 95% read rate and >35% response rate = $0.29 per responding household

Present Your Case – Gift Card

• Average gift card load - $28.54• 75% of gift card shoppers spend 60% more

than the value of the gift card; Cardholders will spend 60% ($17.13) greater than the value on their gift card

• Breakage – 18%; Cardholders will not spend 18% ($5.14) of the value on their gift card

Increase Marketing Effectiveness

• Save time and money by consolidating email, text messaging and gift card programs

• Capture customer information at the point of sale to build a database

• Reward customers at point-of-sale rather than at another time, avoiding fulfillment costs

• Instantly trigger messages/offers to individuals based on activity

• Target selected customers rather than everyone