How to Build Retention with Gift Card Customers
Black Friday and Cyber Monday have come and gone, but the holiday shopping momentum has just begun. In the midst of this busy season, there’s one gift that stands out with unique opportunities: the gift card. Gift cards offer both immediate revenue and post-holiday buying momentum at online retailers and brick-and-mortar locations. And with the right strategy, you can turn gift card recipients into long-term customers, boosting your first quarter of 2024 and beyond.
Keep the Holiday Momentum Going
Gift cards provide immediate revenue before the holidays, but they don’t have to stop there. Here are three opportunities gift cards provide to keep the holiday momentum going:
Opportunity #1:
Immediate Revenue Post-Holidays
Last year, over 40% of consumers gave gift cards as a gift. And for those who received a gift card, 82% planned to spend that gift card within the first half of the year, with over 40% expecting to spend $50 or more beyond the card’s value.
Opportunity #2:
New Customers
Gift cards act as gateways, introducing a fresh wave of new customers. This influx is a chance to showcase your brand and create a positive first impression.
Opportunity #3:
Long-Term Customers
With a well-crafted strategy, you can transform some of these newcomers into longtime returning customers. Nurture these connections to make the most of this opportunity to broaden your customer base even further and lay the foundation for long-term loyalty. (More on this in our next section!)
Improving Your Gift Card Retention Rate
Although gift card spenders can be challenging to convert into paying loyalists, there are so many things you can do to improve your gift card customer retention rate. Much of this comes down to making great first impressions and strategic follow-ups. Here are our top tips:
Tip #1:
A Perfect Presentation
Consider this: the moment a recipient opens their gift card may be their first time seeing your brand. Don’t make this an average interaction. Whether digital or physical, presentation matters. Showcase your brand in a fun and unique way. Upon registration, incorporate brand education into gift card emails or unboxing experiences to set the stage for a positive shopping journey.
Tip #2:
A Smooth Redemption Process
To maximize the potential of a customer’s spending beyond their gift card, make their gift card redemption process simple and exciting. Create a guided flow for gift card recipients, offering step-by-step assistance, brand education, and product recommendations along the way. Continue to make amazing first impressions, encouraging them to return in the future.
Tip #3:
A Warm Welcome
Treat gift card recipients like leads, welcoming them with a tailored onboarding sequence that emphasizes your brand’s value proposition. Consider notifying the recipient and the giver after the gift is claimed to initiate a conversation between the gifter and the giftee.
Tip #3:
A Strategic Follow Up
Utilize a gift card recipient’s first shipment for additional welcome materials and retention offers. In the past, we have worked with clients to build a promo code strategy, offering a promo code in the first shipment and implementing targeted retention efforts through various digital channels.
Building Your Post-Holiday Strategy
Many businesses consider the post-holiday season the slowest time of year and focus all of their energy on gathering as many sales as possible during the holiday season. However, the post-holiday period holds immense potential for businesses willing to capitalize on gift card opportunities.
Are you ready to make the most of the post-holiday gift card spending season? Keep the holiday momentum going and reach out to our consultants at Ragnarok.
