A Sign of Commitment
Gift cards are the ultimate representation of customer loyalty. The customer is giving the retailer or issuer money to hold onto without an expectation of an immediate return. When the card is used as a gift, the buyer is asking a merchant to hold onto money for someone else: their mother, their child, their business partners. When considered that way, gift cards are quite a customer statement, which is why retailers often consider rewarding them within the scope of a loyalty program.
Gift cards are also the seeds of future sales. The cards serve as licenses to spend, that bring cardholders and gift card recipients into stores. It is a great customer acquisition tool, with a low Subscriber Acquisition Cost (SAC). By giving the consumer a reason to come, and an excuse to spend money, gift cards give a retailer the chance to gain a new client, create a repeat client, or increase the average number of visits from an existing client, all of which increase sales.
When paired with loyalty programs, instant or deferred discount and rebate offers, and frequent shopper promotions, the gift card becomes an efficient customer retention tool. Additionally, such a program is an effective tool for collecting customer data to target marketing messages, improve merchandising and inventory management, and build long-term relationships. Retailers have an opportunity to do so through gift cards, and can establish a uniquely rich understanding of cardholder behavior when implementing virtual cards and mobile wallets – assuming their gift card programs are structured to take advantage of the opportunities.
The Ogloba Way
A strategy to continually enrol new clients and acquire key information is essential. In a world where the credentials of customers are under threat, Ogloba believes that such information can be obtained gradually and stored securely, moving the customer into a trust sphere where the retailer does not use private data in an overwhelming way. The Ogloba loyalty programs start to collect the phone number of the new card holders at the checkouts and gradually complete it with other personal data when the card buyer loads the mobile app, or registers online. This enrolment process continues with the collection of the recipient’s data. Ogloba provides the most complete set of options for encouraging enrolment and capturing registration information.
Ogloba recommends that the retailer provides a reasonable return for reasonable spend. Generally, a perceived value of about 5-10% will trigger spending and encourage loyalty. By quickly engaging new members and keeping the hurdle to the first reward low, the customer’s excitement about the program is built. A registration reward may help new guests get to their first reward more quickly.
Ogloba solutions can either be interfaced with existing loyalty solutions operated by the the retailer, or offer an embedded set of loyalty features to transform a gift card recipient into a loyal customer. Ogloba offers a range of rewards schema, such as open redemption and point accumulation plans, and bonus value gift cards.
Bonus value gift cards are very popular and programmed to offer more value at redemption than actual purchase amount, giving a bonus when the consumer’s purchase meets some defined minimum amount. For example, when a customer purchases a $50 reload, they’ll actually receive a $60 reload. The bonus can be granted during preset Happy Days or Happy Hours, or at certain points during holiday and festival periods.
The Ogloba system also supports the basic capability for a consumer to accrue and redeem points. The program tracks each purchase the consumer makes, accumulates points at a rate per amount spent, and directly converts the points into money at a per dollar cash spendable reward (open redemption card). If a points accumulation program is in place, a threshold is defined. When the points total meets the threshold, the points are automatically converted into money. In both cases, the gift card has two debit / credit counters. Each purchase computes points in the loyalty counter until a predefined number of points is accrued.
Multiple Award level plans (several award levels) are also available: the cardholder has the option to redeem when an award level is reached, or continue accumulating points.
The system also tracks the frequency of visits, regardless of the amount spent and the number of times a consumer has purchased an item. When it exceeds a preset number of visits, the program will reward the consumer with stored value placed on the card. The feature includes Quick Service Restaurant (QSR) frequency programs on a defined item called SKU-loyalty (buy 10 coffees get 11th for free). Such cards come with a frame to consolidate points from several cards into one.