How Gift Cards Provide Real Return on Investment
Due to the ability of a gift card promotions program to generate potential business and prevent customer defections, it is considered by many companies as a high ROI promotional strategy. Any investment strategy, whether in devising a new offering, selling the product, or promoting the brand to a new segment of the market, is considered a high ROI investment when the gains are bigger than investment costs.
Defining Return on Investment or ROI
Return on Investment or ROI is usually defined as profit or gain realized after a specific investment has been implemented. It is calculated by dividing the gains from the investment by the costs involved in the implementation. ROI is used as a measure of performance, whether as a way to assess how efficient a single investment is or to evaluate the effectiveness of a group of investments.
However, ROI is also measurable in the manner by which an organization is able to realize its immediate objectives. These objectives may include expanding the immediate market which it targets, promoting a new brand, or reducing customer defections, among others. In these cases, Return on Investment is measured more comprehensively by taking into account the success of these objectives, rather than focusing solely on profits or savings on cost.
How Wholesale Gift Cards Provide Favorable ROI
- Generate Brand Awareness
If one of your objectives is to generate more brand attention, among the most effective promotional tools are gift card promotions. Not only are gift cards great as incentives, they can also be used advertise your brand or specific offering.
- Attract New Customers
When you tie in an incentive along with a transaction — buying a specific product for example — this increases the chances of your company bringing in new customers. This results in an effective call-to-action that compels potential buyers to complete the sale with you, and not somewhere else.
- Skyrocket Sales
Since gift cards encourage people to spend more, the use of these cards for promotions will also improve the sales performance of your business as a consequence.
- Save a Sale
In cases where in a potential customer is still debating whether to complete the sale or not, a value-focused incentive, such as a gift card, can help turn things around favorably. According to marketing experts, this brings a high Return on Investment since the incentive is used to save a sale which, in the first place, would not have been completed.
While ROI is usually calculated by dividing benefits of the investment by investment cost, it is also measurable by the number of objectives achieved through a specific effort. Whether you’re giving rebate promotion or employing a promotional gift card strategy, the most effective way to compute ROI is not simply in terms of immediate profits. It is also best to consider which objectives have been met through the investment.
Interested in using bulk gift cards on your upcoming customer loyalty program? Consult with us at Mpell Promotions today to start using wholesale gift cards in providing customized and real-value incentives to your customers.