Finding creative ways to build brand loyalty can be challenging for many companies and a balance between promotions and maintaining the value of your product is somewhat difficult.
Promo codes can certainly help generate more traffic and help sell old inventory, but can be inflexible and unusable. Gift card promotions, however, will help your customers spend on what they want and need.
Benefits of promotion or coupon codes
Promotion or coupon codes are the codes that tell spenders they can save a percentage off the product or total spendings. Who doesn’t like saving? Spenders are likely to become more attached to your brand if they can save more on your products or services. Further, if you can entice customers with a promo code for old inventory, you may be able to rotate inventory out. Upsell items with promo codes and sell that unwanted inventory.
Benefits of gift cards or codes
Naturally, consumers will become loyal to brands that send gift cards of a certain value. Not only do spenders typically spend 10% more than the gift card amount, they will likely become returning customers and promote your business for you. Gift cards maintain the value of your product and service, but encourages the spender to be less price sensitive.
Promo codes are great for limiting the time frame and product discount; you have control about what people are applying promo codes to and for how much. However, this gives less flexibility to your customers and may not be attractive. Coupon or promo codes can be devaluing for your product and service, since you are offering a discount on your product.
It’s hard to control what your customers can purchase with a gift card. Unless you a specifically creating codes for a product, you customer may not purchase that unwanted and old inventory. Also, gift cards are hard to set a limit for, product wise; you can only offer a gift card and hope they purchase the product you want to be rid of. On the other hand, it offers flexibility to your customers which may increase the return rate.
Photo by Julie Ewald
Gift Card Promotions
For local businesses, sending gift cards to newsletter subscribers can be ever increasingly positive for them. Not only does it promote the business, it also encourages a return visit increasing spending in your business. Approximately 77% of gift card recipients report spending more than the gift card amount, and 31% say they will buy a full price item rather than an item on sale.
Gift cards will help you maintain the value of your product and encourage overspending. Promo codes are only useful if the products are what the customer wants to buy.