This document discusses loyalty, reward, and gift card programs for merchants. It notes that such programs help merchants compete with big box retailers by increasing revenue and retention rates through cost-effective programs. Statistics show that loyalty programs can increase same-store sales by 4.5% and average purchases by 24%. Gift card programs typically see 75% of card values ultimately spent, with an 18% "breakage" rate. The document then outlines various types of programs and features that merchants should consider to grow their business by keeping and attracting more customers.

1. Selling Loyalty, Gift Card & Reward Programs

2. What Are We Talking About Today?Gift CardsLoyalty / Rewards ProgramsMarketing Programs (Couponing & Mobile Marketing)

3. WHY WOULD A MERCHANT WANT A LOYALTY, REWARD OR GIFT CARD PROGRAM?

4. Compete With Big Box Retailers

5. Competitive Pressures

6. Keep Up With The CompetitionKohl’s Cash Expiring future cash rewards based on current purchase amountDunkin DonutsBuy 9 cups of coffee, get one freeBest Buy RewardZone Earn points based on purchases toward gift certificatesFamous Footwear Birthday coupons

7. How Does This Benefit The MerchantIncreases RevenueIncreases Retention RateEasy To UseCost Effective

8. Loyalty StatisticsIncrease same store sale – 4.5%Increase retention – 14%Increase average purchase and visits – 24%

9. Gift Card StatisticsAverage gift card load - $28.5475% of gift card shoppers spend 60% more than the value of the gift cardBreakage – 18%

10. Five most popular programs

11. Club ProgramsA lemonade stand offers 5 glasses of lemonade for a pre-purchase price of $2 versus individual glasses for 50 cents each (Savings of 50 cents)

12. Discount ProgramA promotion states if you spend $500 you get $150 off, $250 you get $75 off, and $100 get $25 off

13. Punch CardWhen you buy 10 ice cream cones at an ice cream parlor your 11th is free

14. Cash BackWhen you spend $75 you get $10 loaded back on your loyalty card

15. Custom ProgramsWhen you spend $100 on merchandise you receive a free karate lesson

16. Additional Features

17. Mobile Marketing and CommunicationText and Email – coupons or special reminders (customized)

18. Send broadcast message or single message at the point of sale

19. Send messages based on program parametersSocial MediaMerchants can connect cardholders to their social media siteAward points for tweets and posts

20. Merchant Portal and ReportsCollect a cardholder databaseTransaction reportsLiability reportsStore basic demographic information and custom fields specific to that merchantWeb Terminalwww.mywebterminal.com

21. Cardholder Portalwww.getyourbalance.com

22. Custom ArtworkBeforeAfter

23. Small BusinessSole proprietor

24. What’s On A Merchant’s MindGrowth!Keep current customers coming backAcquire new customersPersuade them to come backPersuade them to spend morePersuade them to be an advocate Costs!Limited timeLimited expertiseLimited money

25. MarketingEmail Marketing (Constant Contact) $ 15/month Text Messaging (Street Savings) $ 40/monthCoupon Circulars (¼ page ad) $300/monthValPak (10,000 homes) $350/mailingPostcard Mailing (1,000 pieces) $500/mailingLocal Newspaper (¼ page ad) $200/week

26. Present Your Case – LoyaltyIncrease same store sale – 4.5%; If your business has an average annual revenue of $360,000, you should be able to increase sales by $16,200Customers that carry a loyalty card will spend 24% more per visit i.e. if your average purchase per visit is $50 today, You should be able to increase this to $62Most merchants use ValPak as a marketing vehicle - $350/mailing for 10,000 homes. With a 2% response rate = $1.75 per responding household; Using text message you should have a 95% read rate and >35% response rate = $0.29 per responding household

27. Present Your Case – Gift CardAverage gift card load - $28.5475% of gift card shoppers spend 60% more than the value of the gift card; Cardholders will spend 60% ($17.13) greater than the value on their gift cardBreakage – 18%; Cardholders will not spend 18% ($5.14) of the value on their gift card

28. Increase Marketing EffectivenessSave time and money by consolidating email, text messaging and gift card programs Capture customer information at the point of sale to build a databaseReward customers at point-of-sale rather than at another time, avoiding fulfillment costsInstantly trigger messages/offers to individuals based on activityTarget selected customers rather than everyone