October 3rd, 2018
This week we’re talking gift certificates. We’re going in depth today so this one is going to be a bit longer than my usual videos, but it’ll be worth it.
We’re in the first week of October and that means the holidays are coming up fast. And while I’m one of those people who can’t stand to see Christmas stuff up in stores before Halloween, when you run a business, you cannot afford to wait until the last minute to think about the holidays. This is something to start planning now, and gift certificates are a huge part of that.
Now, let’s get one thing very clear here…gift certificates should be a year-round thing for your business. You should be promoting them regularly regardless of the season, but the holidays are prime time to get a large number sold in a relatively short amount of time.
First, let’s talk about some numbers that may give you a bit more insight into the world of gift certificates. According to the NRF Holiday 2017 Recap, “For the eleventh year in a row, gift cards remain the most popular items on wish lists, requested by 61 percent of those surveyed.” That means that well over half of the people in your area, or more specifically, more than half of your ideal clients, are asking for gift cards for the holidays. It’s up to you to make sure you’re the business where they’re getting those gift cards.
Here’s another one…men spend about 12% more on gift cards than women according to the NRF Gift Card Spending Survey. Many of us focus on a female majority clientele, but we can’t forget to speak to the guys too. Even if you don’t see male clients, you’ll need to tailor your marketing to speak to those men who are buying gift cards for the women in their lives. Also, a First Data study found that 75 percent of consumers who were redeeming a gift card, spent just over $27 more than the amount on the card. Meaning, that it’s not just the amount you’re selling that gift card for, but the extra the receiver might spend once they come in.
People are often more willing to purchase an add-on or upgrade to a better treatment or more time since they’re not having to pay for the initial service. Plus, 85 percent of gift cards are redeemed in the first 60 days after they’re received; meaning those first few months of the year, when things typically slow down for a lot of us as everybody is recovering from the ungodly amount of money they spent over the holidays, those gift cards can help to fill your books in January and February.
And last statistic I’ll throw at you; according to the National Gift Card Annual B2B Gift Card Report, “75 percent of the volume in gift card program redemptions is still in physical cards versus 25 percent for digital gift cards.” So we’re seeing an increase just about every year in the purchase and redemption of digital gift cards, but most people still prefer the physical cards or certificates. Now, here’s my take on it.
While it may seem like since more people prefer physical cards, so you think you might just stick with that and only sell those gift cards in office, you are probably missing out on a lot of sales if you don’t offer digital gift certificates. There are all kinds of people whose schedules don’t line up with your office hours and simply cannot drop in to buy a gift card. Then there are those who simply do all their holiday shopping online and the easier you can make the purchase, the better. And still yet, there are those last-minute shoppers who are making purchases in the middle of the night on Christmas Eve. Are you really going to sit in your office all that time and just wait for people to maybe drop in. No. But when you have those digital gift certificates available right on your website and social media pages, everything is taken care of automatically and all you have to do is keep track of the finances – which I’m going to talk a bit more about in just a minute. But first, I get asked a lot which online gift card program to use. There’s several out there, and honestly, I think it’s important that you do your research and find what is going to work best for you. It depends on the features you’re looking for, you know, how much customization of the look, how much in fees you’re willing to pay, what sort of delivery systems, tracking capabilities, etc. If you’re already using a booking software, many of those have digital gift certificate capabilities, so take a look and see if it will work for you. Plus, there are several independent digital gift certificate companies, like The Gift Card Café, where you can design them, put a button your website, and everything is done through their program. You get the notifications and payment into your account. Simple as that. Or, you can even just email your own designed PDFs out, but know that, like with any paper gift certificate, digital or not, you’ll need to track these a bit more carefully to ensure people aren’t copying them, or trying to redeem multiple times. As you can see, there’s a lot of options, so sit down and think about what you want out of any digital gift card process and start looking at your options.
Now, let’s look at designing those gift cards to fit your branding. I know many people think of these as just a piece of paper or a plastic card stuck in a little envelope; but you can make it much better, and much nicer than that. The card or certificate obviously needs to look really nice and fit your branding, but what about going beyond that. So instead of discounting your service price, like a lot of people think they need to do when promoting gift cards, why not offer more value, as I usually harp on. For example, with every $100 or $200 gift card purchase, or even a specific package on a gift card, they get the card in a pretty little box that’s in a nice basket that has several small samples of products you sell like scrubs, lotions, essential oils, things like that. And maybe some tea bags with a little mug that says “relax” and has your logo on it. The options really are endless. You could spend $10-$15 per basket like that, make up several and offer it as a limited time and limited quantity special thing for the holidays. For smaller amounts, you can still offer a nice box and maybe a single sample product as a special touch for the holidays so it’s not so plain as an envelope or just the card. You can Google ‘branded gift card boxes’ and you’ll get millions of results. Design it all to fit your brand colors and theme, and to speak to those ideal clients. And by the way, if you’re interested in having the cards instead of paper certificates, check with your credit card processing company. Many of them, like Square, offer customizable gift cards that are all tracked through your Square processing, and are run just like a credit card.
Next, let’s look at how you can sell those gift cards. A lot of people assume they need to discount in order to sell gift certificates, since that’s what a lot of companies do, right? You get a $50 gift card for $40 type of thing. And while that can give you a boost, I’m all about added value over discounting. Not that discounting is inherently bad, but it just needs to be done strategically. So if you choose to discount, remember that it’s an investment, just like in that basket idea I talked about. It’s an incentive; but do you want to incentivize people to purchase at a discount or purchase because of the high value you’re offering? Big difference.
Anyway, here’s a few ideas on how to sell those gift cards…
Make it obvious that they’re for sale. Put them on the front desk in a nice display reminding people of the upcoming holiday and reasons to buy; have a few flyers or sidewalk sandwich board signs, or whatever you need to get it in front of those who are coming into your office and those who happen to walk or drive by. Ask each and every client if they’d like to purchase a gift card. Every time you are checking out a client and you’ve booked their next appointment, simply ask if they’d like to get a gift card for anyone. Most of the time you’ll probably hear “no thanks” and that’s ok. No one is going to be offended by you asking a very quick, simple question they can easily say no to. But what you’ll notice, is those clients who say “Oh, yes! I totally forgot I need to get my mom something for Christmas!” or something like that. It’s just a gentle reminder that you have them available. And of course, since you’ll have a beautiful display of cards at your checkout counter, just point and ask. And again, let’s talk added value. So instead of offering a few dollars off, why not use that same money to add something as an incentive. So maybe when they purchase $200 in gift cards, they get a $25 gift card for themselves, or something along those lines. I mean people like to give, but they love to get too.
Alright, moving on…let’s talk expiration for a second. I know I covered this in another video about legal issues massage therapists tend to run into, but I want to go over it again here in case you haven’t watched that one. If you’re not aware, for US therapists, you cannot put whatever arbitrary expiration date you want on a gift certificate. There is a state minimum time that you are required to honor all gift cards, and you cannot put an expiration of less than that. That’s not a request, that’s the law. Every state has its own requirements, and I’ll put that link in the description for you, but just know that most of them require at least 2 years, some 5 years, and others do not allow any expiration at all. It’s up to you to know what your state requires. For example, I live in Tennessee, so all gift certificates sold in the state have to be honored for at least 2 years. Now just know, this applies to purchased gift certificates, not ones that you donate to charities and things like that. If you’re donating a gift card, you can put whatever expiration date you want on it, but if someone has given you any amount of money for a gift card, you must honor that state required minimum.
Now this brings me to my last thoughts on gift certificates. Let’s talk tracking and accounting for all these gift cards you’re going to be selling. Because a lot of people get this huge influx of money from their gift cards, spend it like it’s theirs to spend the second they have the money in their account, and then feel like they’re giving free massages when the gift cards get redeemed. But you’re not. You got paid for a service. It’s not the client’s fault that you didn’t keep on your accounting like you should have. So let’s look at that. How do you track both the gift cards and the money from them?
First, the gift cards themselves. This really depends on how you’re selling them. If you’re using something like those nice gift cards through your credit card processing company or an independent gift card company like The Gift Card Café I mentioned earlier, then they should have the tracking all set up. If not, you’ll need to keep your own records. You can make this really simple in an excel sheet or even make your own little table printout to write this all in. Just list out each of the following…purchaser, receiver, amount, gift card number, purchase date, redeemed date, fee location. That last one is going to help you keep track of the financing of this too. So, when someone purchases a gift card, simply put all that info into that excel sheet or on that printed table. Anytime a gift card is purchased, that money needs to go into a completely separate account that is only for gift card funds, because you do not put that money into an account to spend until it is redeemed! So, when you’re filling in that info, in that ‘fee location’ section, put “gift card account”. Later, when you go in to mark that card as redeemed and put in that ‘redeemed date’, you move that money over from your gift card account to your checking or savings or whatever, and mark it as such in that table. This ensures that you’re tracking the purchase and redemption of all your gift cards, AND keeping track of the money associated with each one; so you’re not spending money that technically shouldn’t be spent yet. Does this make sense? You could get far more detailed with this, but I like simplicity, and that always worked for me. The holidays are fast approaching, and while gift card sales should be a part of your year-round marketing strategy, the holidays can give you a huge boost. Remember, this is the time of year where people are looking all over for gift ideas; and while they’re bombarded with ads all day long geared toward the holidays, you also have to realize that it’s not just about making the sale right this second, even though that’s obviously the primary goal, but also gaining a ton of exposure for your business more readily this time of year.
Even those who don’t purchase from you this holiday season, are likely to remember your business and your brand far into the new year, for gifts again later and for themselves.
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