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Hey everybody Mike Linville here from Black Dog Education with this week's
installment of Office Hours where we answer your questions about web design, development,
and online marketing so this week's question came in from our Facebook page and the question
was to gift certificates and gift cards really work? So you know the first thing I did when
I read that was I went to google right cause that's what everybody does and I'm starting
to look up thing like redemption rates and differences between how much you sell and
how much you give out. And then I decided to take a step back and go let's just answer
the question and the question was do they work so without getting too complicated in
terms of all the numbers. For me I think gift cards and gift certificates are genius and
there's three reasons why I really like them and why I like to share those with my clients
the first reason is to give you the opportunity to generate an influx of capital write an
influx of money so give you an example. I had a client right now who sells this monthly
service it's like a monthly class kind of a deal and what we wanted to is beef that
class up so that it feels more professional so that people feel like the the value is
getting up high. So in order to do that we're going to create nice little branded binders
create nice canvas totes so people can carry their binders to and from class but in order
to do it's going to cost about 500 bucks. So we can either write checks out of our own
pockets to offset, to pay for the $500 fee for the tote company and the binder company
and other stuff or what we can do which is what we're going to do is launch a campaign
that is selling gift cards for the holiday season. Target it out to our existing customer
base, that's going to give us an influx of revenue so maybe sell a couple thousand dollars
worth of gift cards you take $500 of the top and you pay for the marketing and the money
goes right back into your business so now you know the people are going to the class
are going to feel better about it, they may buy some more products and services that are
going through so it's kind of a circle of life sort of a thing it really works out great.
The second reason I like gift cards is because the redemption rate to be quite honest with
you I mean redemption rates on gift cards and gift certificate is never 100% it varies
depending upon who you're marketing to, who's buying the cards what type of industry you
are in they can range anywhere from 40 to 50% all the way up to 90% or more so what
that means as a business owner let's say they have a 75% redemption rate. If you sell 100
dollars worth of gift cards you have a 75% redemption rate that means you only have to
give $75 for the services right but you made $100 so you know there's a win right that
gap is what you put in your pocket. It's not dishonest it's just you sold these gift cards,
and it's just a matter of fact that they all don't get turned in, it's good for the business
owner. And the third reason why I like them, and this is probably the most important reason
is it gives you the opportunity to introduce to yourself to new customers. Now if you watched
the last video we put together you'll know that new customer acquisition basically finding
new customers is probably the most expensive marketing activities that you can do. So what
this does is it gives you a warm lead so when somebody comes and buys a gift certificate
let's say for example you have a restaurant and I like your restaurant and that's a great
stockings stuffer or that's a good thing you know with all of holiday parties going on
it's a good thing to kind of bring to people so I buy a couple of them and I hand them
to my friends and I like this restaurant I think that you're going to like it as well
so to the person that's getting a gift cards it's not just dinner out with friends, it's
not just a night where they don't have to cook it's an introduction to a new place.
\ And it's an introduction to a new place that
has my testimonial that they trust, know, and like me so when these people come in there
is a warm lead either already expecting to have a good experience because their friend
who they like and trust, loves you as well okay but here's the key when you're introducing
yourself to new customers especially using gift cards what you want to do is make sure
you have some sort of process on the backend to take these people's relationship one step
further. If they're going to come in with some sort of a gift card what I would do is
I would train my waiters and waitresses to maybe put in a special coupon says something
like come like us on Facebook for chance to win dinner for eight or join our opt in list
for a free appetizer or something like that remember in order to entice people to engage
with with you a little more you don't have to giveaway a brand-new BMW right it could
be something as simple as like hot wings or you know a night out for somebody and their
wife or someone like that. It doesn't have to be huge but what it is, is that gesture
okay so that's all there is three reasons why I really like your certificates and I
would hope that you take a look at them for your businesses well I appreciate you stopping
by this is Mike Linville over at Black Dog Education and remember if you have any questions
that you want to get answered this kind of format and make sure that you go by our Facebook
page, it's just Facebook.com/blackdogeducation I know creative right and then go ahead and
post those questions will get them answered okay so if you like this video make sure to
like it make sure to share it with all your friends do what you do we really appreciate
it again this is Mike Linville of Black Dog Education saying thank you. }