Giving away gift certificates to use in your store is a simple and fun way to get new customers. Gift certificates are basically coupons on steroids. They're significantly more powerful than coupons for two specific reasons:
1. The quality of the gesture
2. People treat coupons like trash; they treat gift certificates like cash
Why Coupons Don't Always Work
People see coupons as a thinly veiled sales pitch. They judge the quality of the coupon based on the quality of the offer: "20% off? oh great... I have to spend money to get a discount off a purchase, who said I even wanted to spend in the first place?
People throw away coupons daily. They see no true value in a coupon. It doesn't always intrigue people to spend. If someone gave you a bunch of coupons for your birthday what would you think? How would you feel? I'm sure if someone gave you a gift card for your birthday you would be thrilled and anxious to spend!
Giving away gift certificates is a really smart way to acquire customers at a very low cost with little risk! It costs you almost nothing to give away them and may not even cost you anything if they aren't use. You only pay for the customers you actually acquire!
Here are some idea on the different ways you can distribute gift certificates:
You may be wondering, what's the right dollar amount for my gift certificates? A good rule of thumb is to make your gift certificates between 25% and 50% of your average sale. Test your market. Try giving away gift certificates for various amounts and compare the redemption rate. Don't assume that the bigger denomination is always better. I've had clients who've tested both $5 and $10 gift certificates, and most clients actually got a better response with the $5 ones.
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