by Julie Smith -- December 02, 2017

The holidays are right around the corner. Shoppers are flocking to websites and stores to buy gifts for their loved ones. This year, however, holiday shopping is not limited to the purchase of iPhone Xs, Hatchimals, and all things Star Wars. Gift cards top the list of the most desirable and purchased items. In fact it is projected that gift card sales will reach $150 billion in 2017 according to M-Connect Media.

Great.  Gift cards are easy to sell and people want them.  How do retailers make the most of this platform as an entry point for new customers? How do you make sure the recipients of your company’s gift card do not become one of the 6-10% of gift card recipients annually who never redeem their card? When these customers do come in, how can you ensure they are not “one-and-done”?

Key to establishing a successful trial-to-customer-conversion strategy for gift cards is to develop a stronger understanding of your customer. Customer profiling and journey mapping can serve as meaningful tools to help you visualize where and how customers interact with gift cards and how customers move from sampling to shopping. The gift card equation is more complicated than most other customer interactions, as it features two customers to engage, delight, and retain.

Understanding the customer in front of you

To engage the gift card recipient, it helps to be clear about what originally motivated the buyer to purchase the gift card.  Are buyers responding to requests from the recipient or are they encouraging their friends and family to sample a company they like? Is the buyer a brand loyalist? Can they help you provide suggestions for purchase items to the recipient? Can they share why your company is meaningful to them? Is this a parent purchasing a gift card for their child, where they might also be providing funding for additional purchases? By understanding more about this buyer, you can improve their experience with your company, engage them to buy more from you, and distinguish your gift card program from your competition.

While some customers may not purchase gift cards directly from you (choosing, for instance, to buy through other channels or distributors like Blackhawk), they are nevertheless typically shopping for a recipient who is your existing loyal customer.

Developing a new relationship

Even if you know who is buying the card, when the recipient is not a brand loyalist, how do you begin to develop a relationship? Relationship building requires you do more than simply ask for an email address. Consumers, especially millennials, care about the value they receive in a relationship with retailers. Providing additional soft and hard benefits for registering a gift card can spark a conversation between your organization (including front line associates) and your new customer. Benefits offered should support your specific value proposition, but can also include reloadable cards, further spot discounts, free shipping on gift card purchases, free lessons or equipment setup, etc. The goal is to create another connection point for these shoppers and motivate them to provide a reason for future follow up and meaningful personalization.

Too many retailers think about gift cards as just another SKU, like a sweater, fragrance, or gadget. Gift cards have the power to start a relationship and provide the platform for conversation and connection to drive future purchases. Rather than squander this opportunity, successful retailers will embrace this media as a means to gather more information, enhance the customer experience, and ultimately convert trial shoppers to become repeat (and loyal) customers.

Top four ways to engage gift card users

  1. Give them a reason to register their card – at a minimum to protect against loss or theft, but providing more value is critical as well – and to opt in to marketing communications.
  2. Enlist your sales force to be ambassadors of the future – encourage them to share upcoming events, sales, information with shoppers as they present gift cards.
  3. Provide benefits for reloading (e.g. reload $50 and get an extra $5).
  4. Fulfill your value proposition – ensure customers have a great experience with your organization and are able to purchase the products and services they need. The right level of service and selection are always the most important benefit you can offer your customers every day of the year.