Word-of-Mouth and Referral Marketing Blog

Gift Cards: 3 Easy Steps to Take Advantage of the Referral Channel you’re Neglecting

Think “referral program” and what pops into your mind? Likely, not Gift Cards.

Instead, you think of a program built with the express intention of getting customers to convince their friends to become customers too.

That’s true! But there’s another mode of customer referral that is almost certainly going under the radar: Gift Cards.

Gift Cards are excellent at serving as promotions and rewards, but the concept of Gift Cards as a referral channel often goes unnoticed. Since Gift Cards can bring new customers to the table, we’re here to show you how to explore and maximize this referral source.

How Gift Cards Can Create New Returning Customers

Some of your customers are buying your products for themselves. But if you’re like most eCommerce businesses, you also have customers buying your products or Gift Cards as presents for their family and friends. And that’s an opportunity to create repeat customers.

When Customer Joe sends his favorite cousin Danielle one of your products as a gift, he is referring your business to Danielle. If the relationship ends there, that’s nice, but it doesn’t necessarily turn Danielle into a returning customer.

But if you make yourself an integral part of the gifting process, the whole picture changes. Danielle not only knows about you; you know about Danielle.

  • You know her email (because you sent her the gift announcement)
  • You know her address (because you shipped her the gift)
  • You know her taste and style (or at least what Joe thinks is her style; Gift Cards work better for this because you can see what she bought herself with the Gift Card)
  • You might know her birthday, or anniversary, or whatever occasion the gift was sent for (because Joe will probably have written it into the text of the gift announcement)

Do you realize the referral power that this initial gift or Gift Card purchase provides for you?

Incredible, exploisve power! via GIPHY.

Now, let’s talk about how to make this power a reality in your store – here are the steps to take:

1. Make Gift Cards Easy for Customers to Find and Buy

There is no doubt about it: your customers are looking for Gift Cards. In 2017, the global Gift Card market was $320 million – and growing. During the 2018 holiday season alone, 54% of consumers planned on purchasing Gift Cards, and odds are that your client base is among them.

Gift Cards are an incredible tool when you’re looking to build loyalty programs since they can be recharged and set to automatically deliver rewards and store credit, and while they’re attractive to your customer base, they’re invaluable for you as a referral source.

In order to begin utilizing this new referral channel, you have to ensure that your customer base knows that you offer Gift Cards. If your customers can’t find them on your site, they can’t buy them, and you lose the channel.

Make sure your Gift Cards stand out on your website. Feature them in your top navigation bar and on the homepage. When a holiday rolls around, post a special banner promoting your cards as the perfect gifts. The more customers can see them, the more likely they are to sell. Here is how it looks at the Miami Heat Store and at RawThreads.

miami heat puts e-gift cards as a main menu item on their store - gift cards as referral channel

2. Design Your Gift Cards for Every Gift-Giving Occasion

You’re looking to get your dad a Gift Card for his big upcoming retirement day. You’ve narrowed it down to two brands you know he likes a hardware store and a fishing gear shop. When you look at the images of the Gift Cards the two vendors offer, the hardware store offers plain blue cards featuring its logo, while the fishing gear shop card has the words “Enjoy Your Retirement!” superimposed on a cartoon of a man in a fur parka fishing through a hole in the ice.

Which card will you pick? No contest; the card that stands out and grabs his attention because he can relate.

Take a look at the Gift Cards below and think creatively. Ensure that your Gift Cards, both those you sell at point of service and those you market online, are attractive and carry exciting branding and occasion-specific messages.

a display of various gift card designs including apple, subway and dunkin donuts - gift cards as referral channel referralcandy blog

  1. (Photo credit: www.pochiwinebarde.com/)

Keep in mind that with digital Gift Cards, you don’t have to invest resources in printing hundreds of holiday-themed Gift Cards that may or may not get used. One graphic image of your Gift Card – and you’re good to go!

By using free photo sites like Shopify’s or the mountain of other options available, you can save on graphic design costs. A search for “Fathers day” or “Christmas” will turn up stunning images, and most are available to use for commercial purposes without charge or attribution. (A word to the wise: double-check that the photo site you’re using allows that or you may find yourself in big trouble.) Be careful with personalization, though; don’t give too many image options for any one occasion or choice overload may make your gift giver freeze and flee the site without choosing a single one.

Remember, your Gift Card goal is to turn the gift receiver into a returning customer. When the recipient feels that the gift is both attractive and highly personalized, that person is much more likely to create a bond with your brand and return for future purchases, making him or her a valuable referral.

Screenshot

3. Build the Relationship

The gift or Gift Card has been purchased. The referral process has begun. But the direction it will take is up to you. Some of the following steps are critical, and some are just helpful. The more you can implement, the better your referral program will work.

a. Be the Middleman

The first thing you need in order to be in touch is contact information!

Stay away from Gift Card systems that don’t have the ability for the giver to send the gift announcement directly to the recipient’s email. If your gifter needs to take the purchased card and pass it along to her recipient on her own, you’re out of the loop, and there goes your referral. It might even be wasted money, too: up to $1 billion in gift cards go unused every year.

In addition, seamless Gift Card giving and receiving is the experience your customers are looking for! (Amazon does it this way – why wouldn’t you?) Nobody wants to download, pick up, print or deliver. An instant, digital process is what your customers are demanding. Give it to them.

gift card example dunkin-donuts-loyalty

Dunkin’ Donuts’ loyalty app not only gives you free coffee but also a year-in-review

And here’s the kicker: when your Gift Card purchase and delivery process is seamless and digital, you get to track the recipient’s email, the occasion for the gift, and what the recipient eventually purchased with her Gift Card, and even send reminders before expiry. This information is a goldmine – you’ll need it to most effectively reach out to that same recipient for future marketing campaigns.

b. Give a Great First-Touch Experience

Identify visitors coming from the link on the gift announcement. Give them a tailored, personalized experience on their landing page. If you know the names of the giver and recipient, and the occasion for the gift, you can do something like this:

gift card sample welcome email - art created by Rise for referralcandy

If you were Danielle, you’d feel loved, right?

c. Actively Market Gift Cards to Past Referrals

With the data you now have, including the gift she received or the items she selected with her Gift Card, you can send her targeted promotions.

Did Danielle buy an espresso machine? How about sending an email featuring some must-have add-ons for that model? Did Mike buy a toy meant for two-year-olds? Well, that child will be three next year and four the year after. A well-timed email promotion featuring your top-selling toys for those age brackets might be welcome.

If this new customer or almost-customer doesn’t buy again for a while, sending a complimentary $5 or $10 gift card as a “Hey – we were thinking about you” gesture can work wonders to get them back to your store.

Low-value Gift Cards work significantly better than coupons for this because the irrational human brain sees a $10 discount as a deal you get when you’re spending your own money, whereas it sees a $10 Gift Card as FREE MONEY!

With “free money” in hand, your customers are much more likely to visit your store and see what they can buy with their free money. Many will buy, and a large number will spend significantly more than the value of the Gift Card.

d. Expand the Referral Power

Use the recipient email data to create custom and lookalike audiences on Facebook. This is an audience that your Gift Card buyers are pointing out as an ideal audience for you, and you may not be marketing directly to them yet.

You can also retarget the gift giver when next year rolls around (if the occasion was a birthday, anniversary or an alternative annual occasion). Remind her of her decision to purchase a Gift Card last year and offer her a discount for this year.

There’s No Time Like the Present

You’ve joined the ranks of smart online merchants who know that gift and Gift Card purchases are not only revenue but a built-in referral program that can lead you to some of your best new customers.

Now it’s time to put that knowledge into action.

Go!


This post was contributed by Nadav Berger, VP of Marketing at Rise.ai. Rise.ai is the first proactive branded currency solution for Shopify stores, providing gift cards, rewards and store credit programs, as well as incentives that automate re-engagement. With Rise.ai, merchants can distribute real, stored value credit in real time, based on automated or manual rules and triggers, maximizing engagement and building customer loyalty.

Raúl Galera

Raúl Galera

Raúl is ReferralCandy's partner manager.