Measuring The Impact Of Gift Cards

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We encourage our clients to use Mx3 Metrics for all their channels, not just digital or social. An important channel that some of our clients rely on is gift card sales. Gift cards are explicitly measurable and proven to generate a high Return on Marketing Investment (ROMI). Gift cards can help with new customer acquisition, as they act as a defacto recommendation from the gift giver to the recipient, while also being popular among returning customers as well.

Gift cards are a multi-billion dollar business in Canada and the U.S., and their popularity is still on the rise. Gift cards are not only popular with consumers — businesses are adding them to their marketing mix, and for good reasons:

For consumers:

  • Gift cards make gift giving a lot easier. Just about every retailer — from clothing to coffee to high-end restaurants to books and electronics — offers gift cards. That means the person you’re buying the gift card for can purchase something you know they’ll like.
  • Gift cards are convenient. You can purchase gift cards pretty much anywhere — directly from your store or restaurant of choice or at gift card “malls” or “kiosks” at convenience stores and major retailers.
  • Gift cards make it easier to stick to a budget, especially during the holidays.
  • Most provinces have legislation in place to prohibit expiry dates on gift cards, which means your money won’t go to waste.

For retailers:

  • Gift cards provide an additional revenue stream for retailers, generating revenue in advance of sales.
  • Shoppers using gift cards are 2.5 times more likely to pay full price for the products they buy.
  • Many gift cards are not redeemed for their full value so that encourages repeat visits.
  • About 6% of gift cards end up unused.
  • Many people spend more than the value of the gift card. (72% of consumers will spend about 20% more than the value of the gift card)

From these statistics, it’s clear that for some businesses, gift cards can make a great addition to your marketing efforts.

Case In Point:
One of our restaurant clients, Japanese Village Edmonton, offers a discounted gift card through Costco stores in Edmonton. We were tasked with figuring out how to track the performance of these gift cards with our Mx3 system. Our client, Tenkai, sells these gift cards for his restaurant through Costco Edmonton's gift card “kiosks.”

The gift cards sell for $40 each: Tenkai keeps $35 and Costco gets $5.

Tenkai’s customers get $50 worth of food at his restaurant for $40.

We decided to treat these gift cards purchased through Costco as a separate funnel so we could get a good read on the revenue generated from them and Tenkai’s return on investment.

Costs:
Real costs include how much it costs Tenkai to produce the gift cards to sell in Costco. The average cost of design and printing plastic gift cards is $0.50 each.

It costs Tenkai $5 for every gift card purchased through Costco. The total cost is $5.50 per gift card.

Impressions:
An impression is created every time a customer walks by the gift card “kiosk” in Costco.

We did a rough calculation based on the fact that there are 3 million visitors to Costco every day. Divide that by 727 stores in North America and that means about 4000 customers visit each story every day.

Multiply that by 30 days and you have about 120,000 visitors a month. Not every one will walk by the gift card “kiosk” so let’s say that 10% do. That means about 12,000 impressions a month.

These impressions may lead to an explicit benefit: the immediate or future sale. This is the outcome Tenkai is striving for, but impressions also carry implicit benefits such as branding. Exposure to the brand will increase consumers’ brand awareness while the prestige of being sold in a Fortune 500 company like Costco will build brand equity.

Revenue:
Through Costco, Tenkai Sells around 300 cards a month, around 2.5% of our monthly impressions. This number fluctuates greatly, especially around the holidays, so we smoothed it out to a round monthly average.

At $35 a card, Tenkai’s revenue stream from Costco sales is approximately $10500 any given month.

Return On Marketing Investment:
To figure out our ROMI for each individual unit, we divide our profit per unit by our unit cost. $30.50 A Card / $5.50 Cost Per Unit equates to an ROMI of $5.55. This figure demonstrates a very healthy return on Tenkai’s investment.

At $8,850, Tenkai’s monthly profit from the gift card program provides him with consistent clientele and an opportunity to generate business from first time customers. This figure is also lower than the actual impact, since customers generally spend about 20% more than the value of the card. Congratulations Tenkai!

As the example above proves, gift cards are a tool that can tell us a lot about our clientele. We can track and measure their impact on our bottom line, but they can also generate information about our audience. For instance, we can spread them across various stores around town, telling us a lot about who our customers are and where they are coming from. This information can inform marketing strategy going forward. This data, in tandem with Mx3 Metrics, may encourage us to invest in under-developed markets and grow essential elements of our business.

Sophisticated SEO and Beyond

Recently, a client of ours, Domaine Furnishings, asked about how they could get their product pages to bring in more visitors from Organic Search.

Domaine Furnishings has been a client of ours for a few years. We love working with them. They offer interior design services and a variety of wonderful furniture and accessories - indoor and outdoor.

The short answer to their question is, SEO. The longer answer is that there are a variety of ways to do search engine optimization (SEO) and some of the more sophisticated techniques take time and energy. Luckily, the have us to help and Michelle to really make things work on a daily basis.

Let me share with you the ways that I suggested, from Easy to Harder.

Option A: Simple

Just add products: heading, description, and image, as you normally would. You can always start here and add other Options later.

Option B: Description

Adding longer descriptions is important. Much longer.  This gives more content for Google to find and index. Break the description into paragraphs and bullets. Also add bullet points related to features and "benefits".

Option C: Sophisticated

This technique is advanced and it won't always work but when you have time, try it.

  1. Pick your products carefully before proceeding.
  2. Add keyword phrases in the heading and description that are related to very specific keywords that people are searching for. Be careful when you "optimize" headings. Adding in a bunch of keywords can look awkward. But don't forget the product description; you can always add keyword phrases there.
  3. Use Google Keyword Planner to do more keyword research. The tool is hard to fine. Here's a tip: After you log into your AdWords account, click on Tools and select Keyword Planner.
  4. Now think about this product from the prospective buyer's point of view.
  • Why would they buy it?
  • What are they looking for?
  • What is the product made from? What wood? What material?
  • And finally, what search terms would they use to find this product on your website?

5. Also look at the product from your point of view as an interior designer.

  • Why have you selected this product and added it to your inventory?
  • What colors does it go with?
  • What other furniture does it go with?
  • Why should a person buy it?

As suggested by the word, "sophisticated", this is not easy. It takes thought and research. It takes creativity. 

Option D: Internal Linking from Blog

Now let's get super sophisticated. This is not for the faint of heart but it works. And by "works" I mean generates more traffic to your website from Organic Search.

Let's assume that you have done Options A, B and C. You have a great heading and a well written (and long) description but you want this page to rank in the search engines.

The next step is to add all your thoughts and your ideas about this product to a blog post. Then, in the blog post, you added a link back to this product page. You made sure that you added relevant keywords in the visible portion of the link.

You have done "internal linking" - linking from one area of your website (the blog) to another. Google picks this up and says, "Ah, the page about this product is interesting. Let's rank that a bit higher." Google is a bit more technical than this but this is the end result.

Option E: External Linking

Now let's take this one more level. Let's say that you bring into the store an item that is Wow - a spectacular find. You want to sell it. And the world needs to know that you have this item in your stores and the item is for sale.

SEO and AdWords, will help but only if people are searching. Social Media will also help but only with the community that knows you (and a few more). What you really need is a PR campaign to increase the profile of Domaine and this product.  Ultimately, what you want is to get the attention of mainstream media and/or bloggers.

The objective is to have professionals write an article about your company, your products and your story. And, of course, we want them to link back to your website. If you can make that happen you will have an "external link".

Summary

We are now really "working the system".

  • You've a unique page about the product.
  • You've done your keyword research.
  • You've optimized the page for search engines.
  • You've written a blog post and talked about why you love the product.
  • You've done a PR campaign to generate some buzz about Domaine and the product.
  • We can now "prime the pump" with ads on Google Search or Google Display networks. 
  • We can also use posts and ads on social media platforms like Facebook, Instagram and Pinterest to increase awareness with your target audiences.

These techniques work - very well - but choose your products carefully.

Only spend time on the ones that you really want to promote.

Contact us if you need any help.

Client Profile: Dr Brent MacDonald, Dentist

There are few dentists as passionate about their work as Dr. Brent MacDonald. Over the past 25 years, he has built a strong family-based practice in NE Calgary by taking the time to listen to his patients’ concerns and ensuring they are heard. Anyone coming to see Dr. Brent as a patient or for a new consultation is met by a friendly and personable dentist who loves his work. He takes the time to educate his patients about their oral health, so they can make informed decisions.

Although he provides general dental services along with cosmetic dentistry, veneers, whitening and mouthguards, one area of his practice where he sees many patients is for Dental Implants. These are artificial tooth roots that are placed in areas of missing teeth; the results are a natural looking option for a better smile and improved function. Dr. Brent has undergone extensive training in placing dental implants and continues to hone his skills through regular ongoing continuing education.

I first met Dr. Brent at the Calgary Executives Association where we are both members. I’ve become a patient and was so impressed, my entire family now goes to see him. And I learned something new from him--flossing should be done twice a day! Who knew??

Dr. Brent is happy to accept new patients. His office is located at #570, 433 Marlborough Way NE with lots of parking, and the phone number is (403) 273-6959.

If you want to know more about him, visit his Facebook page: www.facebook.com/DrBrentMacDonald

Dealing with Negative Reviews - 9 Ways

Let me start with a blog post that I wrote a few years ago: www.anduro.com/blog/managing-online-reviews

Some of the language has changed - the review section on Google is now called Google My Business and Urbanspoon is now Zomato - but the principles are the same. Sadly, Marco Abdi has died since I wrote this blog post but LaBrezza Ristorante is still going strong. 

POINT #1: BURY THE NEGATIVE REVIEW

We had one negative review a few years ago from a client who is still a client. It came out of the blue - we weren't expecting it. See: Monica Hirai's review. We sent out emails and phoned other customers to ask them to write a review for us. And I think we even gave an incentive like a Starbucks gift card.

POINT #2: CONTACT THE REVIEWER AND ASK FOR AN UPDATE

Monica did an update. This was after I contacted her and asked for her explanation about the review.

POINT #3: LEARN FROM THE REVIEW AND ADDRESS THE ISSUE

If you read the details of the review you will see that she has a valid point: too many people from our company were contacting her. Point taken. We addressed the issue. And then she posted an update

POINT #4: MAKE A PUBLIC REPLY TO THE REVIEWER

Have a look at this review on DealRater. This is how one of our client, PrecisionHyundai.com, replies to ALL reviews. This is not always possible on all platforms but for most the owner of the page can reply to the review.

 

 

POINT #5: MAKE A PRIVATE REPLY TO THE REVIEWER

Here is another example on Facebook by another customer of ours StoreNSave.com. See review by Matt Sullivan on March 6th. He complained. SnS read the review and replied asking for contact details in a PM (that is private message in Facebook Speak).

 

POINT #6: CALL THE PERSON OUT IF THEY ARE WRONG

Doug Lacombe told this story when he spoke at Calgary Executives Association in February. See the review on the Google My Business page for his company Communicatto.com. There is only one review from "cassidy crawford" which is in lower case - first sign of fishiness. She complains that he blocked her car. At first glance this appears to be a legitimate complaint - no one likes having their car blocked. However, the truth is that she parked in his spot which he pays for.

Ah, not such a legitimate complaint any more. Read his response. Such a comedian. I would have slashed her tires. Well maybe not but the image of me doing it would have played a few times in my mind.

POINT #7: DO SOMETHING

Sometimes it is best just to ignore the negative review. However, be careful. This can backfire on you. Have a look at the reviews for this pizza company. Lots of negative reviews and no replies. I don't think I would eat here. This review by Jen J. - hilarious. is the best - read it carefully.

 

POINT #8: DISPUTE IT AND TRY TO GET IT REMOVED

Most review sites don't give you the ability to delete a review. However, you can flag it or dispute it. See Google's approach: support.google.com/business/answer/4596773. Competitors can be nasty, so all the review platforms have some way for companies to defend themselves and remove reviews that are just WRONG.

POINT #9: RESEARCH IDEAS

Here are some good articles:

I love this. Note the H.E.A.R.D acronym. https://www.groovehq.com/support/deal-with-bad-online-reviews

Excellent points: https://www.americanexpress.com/us/small-business/openforum/articles/6-ways-to-handle-negative-online-reviews/ 

Long but some great points: www.buzzmaven.com/2010/08/15-tips-for-responding-to-google-place-page-reviews.html

Do's and Don'ts: www.fundera.com/blog/dealing-with-negative-online-reviews

Let me know if this is helpful.

Client Profile: Claritech Solutions

Claritech Solutions is a full-service information technology management company. The company works with small and medium-sized organizations to help them cost-effectively and productively operate their IT infrastructure.

Claritech was originally founded in 2000 by Dan Frederick, P.Eng. He has almost 30 years experience working in the technology industry from programming and systems management to IT consulting. Dan also has an MBA from the Haskayne School of Business at the University of Calgary.

I met Dan originally on LinkedIn, and then again through the Calgary Executive Association about a year ago -- we are both members. Since then we have become good friends; he’s a great guy and very funny!

What sets Claritech apart is its focus on not overly complicating things for its clients. The goal is to keep things simple; the team always looks for solutions that are going to work best for the long-term and ways to save money. Any recommendations are always based on looking at the situation from the user perspective. Dan also suggests to clients that they pay attention to the tools that are available that can help make their jobs easier.

Claritech has recently introduced an entry level monthly support package, which provides remote monitoring and remote support 24/7 for one low monthly fee.

To find out more about Claritech, please visit their website Claritech Solutions or give Dan a call at (403) 809-2247. His twitter handle is @ClaritechDan.