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The old adage you've got to spend money to make money is no
where more true than with gift cards. Look around all I've seen
advertised on television and in the newspapers this holiday
season has been for the purchase of gift cards. It's as if
Walmart, BestBuy and Target don't have any merchandise to sell.
Advertising today is very expensive. People in marketing know
that to advertise for 1 specific product nationally or locally
can cost thousands if not millions of dollars. Is it worth it to
sell 1 product. For those interested in that product they might
venture into the store and while there, they may purchase other
items, but what about those not interested in that product? All
that money spent and no direct result seems like a waste. What
the marketing departments in these companies have decided to do
is push gift cards. In todays fast paced life style, window
shopping or browsing is a luxury that most people don't have or
don't want to do, with their limited free time. Gift cards are
the drive-throughs for these retailers. Quickly pick up a card,
plunk down some cash and be on your way. Gift cards have become
trendy and very convenient for the consumers.
This sounds good for the consumer but why is the retailer
pushing the cards. Do they genuinely want their customers to be
happy? Perhaps, but being a synic I can suggest other reasons.
Firstly, gift cards are great for cash flow. The cash sits in
the retailers account and waits for the purchase at a later
time. Secondly some gift cards never get utilised, they might be
lost or forgotten. Thirdly, the average consumer when making a
purchase using their gift cards, spend more than the gift card
amount. Fourthly with gift cards you cut down on returns to the
stores. The cashiers spend less time, merchandise isn't
destroyed or abused and inventory amounts reflect real sales
which helps in planning replenishments. Fifthly, these cards can
be refilled or exact amounts can be depleted. With gift
certificates any unused portion was generally give back as cash
to the consumer, thus a sale might not really be a full sale.
Having a company, Solutions Ink, in the promotional products
industry I've personally seen the dramatic change to gift cards.
The next big shift will come in loyalty cards, as these same
retailers discover the benefits of consumer buying patterns. The
old adage you have to spend money to make money is true but with
todays competitive markets you must spend that money wisely. You
don't mind spending the money if there is a worthwhile return.
We see with Gift Cards that the returns are great, more than
offsetting the cents you spend per card. With Loyalty Cards the
knowledge gained on consumers buying habits will lead to
personalized marketing campaigns to each and every consumer with
phenomenal response rates. If you know what your customer is
looking for and offer them that product, chances are they will
buy it from you, and appreciate your help in saving them time.
Being first to market in your business category will give you a
decided advantage for years to come.
Steven Schneidman runs a successful printing and promotional
product company servicing customers in both Canada and the
United States. He has an MBA, has taught finance at a leading
Canadian University and has worked at the head office of a
leading Canadian Bank.
Look for companies like Solutions Ink that also specialize in
variable data. Today with the use of digital presses and
customer data we have seen an explosion of successful marketing
campaigns that generate more sales with reduced marketing
budgets.
Remember spend your dollars wisely.
Steven Schneidman http://www.solutionsink4u.com
steve@solutionsink4u.com
About the author:
Steven Schneidman runs a successful printing and promotional
product company servicing customers in both Canada and the
United States. He has an MBA, has taught finance at a leading
Canadian University and has worked at the head office of a
leading Canadian Bank.
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