In our latest blog we look at the opportunity around gift cards (and experiences) and how this underutilised sales channel can be leveraged all year round to drive revenue.
First though, why would you sell gift cards in the first place? There are 4 key reasons:
- Welcome new customers - Sure, friends and family will buy a gift card or experience knowing that the recipient already likes the brand, however, they will also buy because they love your brand and they want the recipient who’s never been, to experience it too. (There’s also the added bonus of customer data acquisition).
- Generate a new channel of revenue - It’s not hard, gift card sales are like having another EPOS terminal. Customers can buy online whether your outlets are open or not; with a bit of proactive marketing, you’ve just covered your print and promotion budget.
- Drive incremental revenue - I’m going to try and keep this as simple as possible and have based the calculation on a single location (bear with me). So, If your average spend per head is £25 and the UK average for table bookings is 3.3 covers; you sell on average 50 cards a month at an average value of £35 and 80% of people redeem (see next point) you’ll generate £1,750 of revenue with a further £1,900 in the uplifted revenue of the visit. What’s more, the visit will invariably push up SPH as the customer got ‘free’ cash and will premium up. (So that’s £43k a year without a lot of effort)
- Realise expired card revenue - Firstly, you are better off getting a visit than expiring a card (see point 3), However around 20% of gift cards are never redeemed, You’ll set an expiry on a card (typically 12 months) and your customer will be reminded to use their card. If they expire however, the value of the card will simply hit your bottom line.
So, on to the point of the blog… Like dogs, gift cards are not just for Christmas. They can make people feel warm and fuzzy all year round, and be used in a variety of ways to deliver revenue.
- But let's first address Christmas - I heard a stat a few years ago that Mitchell & Butler do £1m in revenue in the three days prior to Christmas by leveraging their database. A timely broadcast of SMS or email on Christmas Eve at 4pm will drive sales. Selling gift cards at Christmas needs a strategy, just like selling parties, tables, tickets etc. you don’t do it ad hoc, you plan and have a strategy..
- National events - Valentine’s (a gift voucher has to beat petrol station flowers), Father’s Day & Mother’s day. This content should be timely; gift cards can save relationships and reduce stress (fact).
- Birthdays and anniversaries - a good marketing tactic is to collect important personal dates from customers so that you can then push them gift ideas.
- National awareness days - British Pie Week, MacMillan Coffee Morning (obviously with a donation to the charity), National Curry Week, Cake Day etc. These all provide content hooks for your digital activity.
- POS and marketing - Having a stack of cards behind the bar just doesn’t wash. Tent cards, posters in the loos, receipt prompts, adverts within your menus and of course digital activity to your database and social channels will all increase sales.
- Your FOH team - Your best salespeople are the ones serving your customers, they are already engaged with them and potentially upselling your menu. At certain periods of the year (see point two) they could be incentivised for the sale of gift cards.
- And finally - if you’re a big enough brand with multiple locations then there's the b2b market which could give you a 40% further uplift.
And they have other uses...
- Incentives - Book a Christmas Party for 10 and get a £20 gift voucher - simple.
- Raffle prizes - You get a lot of requests for charity sponsorship, gift vouchers are a very simple raffle prize.
- Apologies - A customer has a bad experience. Give them a gift voucher there and then and encourage them to give you another go.
In conclusion, a good gifting platform can deliver you revenue. Airship count Living Ventures, Hickory's, Reds True BBQ, Ego Restaurants, and Brewhouse and Kitchen amongst our clients, if you’d like to know more, please get in touch today.
Rattled off by Dan Brookman, Commercial Director and Co-Founder at Airship.