January 29, 2008

Gift Cards

Gift cards can add to your marketing program and to your bottom line too. In a way, gift cards are a form of Guerrilla Marketing—they are inexpensive, they build the brand and they, in fact, are also a form of negative cost marketing—people pay you for the gift cards to give to others to let them know that you exist and that they should buy from you!

Deloitte Touche in Business Week (February 4^th, 2008) says that 2% to 10% of the amount spent on gift cards are never claimed but in my experience it is often quite a bit higher, sometimes as much as 30%. The BW article mentions that Best Buy currently had $471 million on its Balance Sheet (as a liability, of course) of unspent balances from its gift card program of which they took in $135 million into their operating income.

Now in some States, they insist that unclaimed property be turned over to them after a certain period of time so you have to be careful about: a) where you incorporate in the US, b) where you do business in the US, c) whether you are permitted to put expiry dates on your cards and d) being fair to clients and customers. If a client shows up a few days after his or her card expires, you should probably honour it; otherwise, you are engaged in reverse marketing.

http://www.dramatispersonae.org/GuerrillaMarketingTechniques.html

http://www.dramatispersonae.org/GuerrillaMarketingAndFinance/GuerrillaMarketing.htm

http://www.dramatispersonae.org/GuerrillaMarketingAndFinance/BMGGuerrillaMarketingTest.htm

http://www.dramatispersonae.org/GuerrillaMarketingAndFinance/ReverseMarketingPizzaPizza.htm

http://www.dramatispersonae.org/EntrepreneurialistCultureFrontPage.htm

http://www.dramatispersonae.org/