Case Study 1—A Sweet Return on Investment
A large candy distributor/retailer offered a multi-channel Gift Card with Purchase program as part of their holiday and post-holiday marketing program. Depending on the dollar amount spent, customers would be immediately rewarded with one of the specially printed program gift cards for $10, $25, or $40.
This retailer followed IBF’s model to ensure maximum results. The retailer printed separate gift cards with expiration dates to ensure quick return visits. The program was clearly defined within the store and on the web site. The retailer also used multi-channel marketing to effectively reach its customer base. The retailer set the reward amount above its average sale to increase the average ticket at time of purchase. Also, the retailer collected important customer demographic information from each customer.
During the promotion period, the merchant issued a total of 211,873 GWP gift cards. By offering this program, the merchant produced over 7 million dollars in net sales. 43% of the cards were redeemed within the promotion period. The retailer enjoyed a ticket uplift of 46% from the redeemed cards. Almost half of the consumers that qualified during the promotion returned to spend more than the value of the gift card.
GWP ROI Calculator
| Number of Customers that Qualify | X | Average Ticket Increase | = | Amount of Ticket Uplift Revenue |
| 211,873 | X | $18 | = | $3,178,095 |
| Number of Redemption Sales | X | Average Ticket | = | Bounce Back Revenue |
| 91,105 | X | $25 | = | $2,277,625 |
| Ticket Increase Revenue | + | Bounce Back Revenue | = | Net Revenue of GWP Program |
| $3,178,095 | + | $2,277,625 | = | $5,455,72 |
The large candy retailer enjoyed $5.5 million (approx) in net revenue created by the program. Total costs of the program equalled $2.5 million (approx). Total revenue generated by Gift Card with Purchase program was $3 million, for a 45% return on investment.
Case Study 2—Increase Retention & Build Loyalty
An upscale clothing retailer decided to reward its customers by offering a gift card to customers that spent 30% above its average ticket. Once a customer reached the pre-set reward level, the GWP gift card was mailed out to the consumer, allowing for more personalization of the program.
In order to qualify for the $50 gift card, a customer had to spend $300. The consumer had 30 days to redeem the gift card once they received it through the mail. The retailer later used customer information collected about buying habits to execute an effective marketing campaign.
Over 3,000 of the 50,000 gift cards mailed were redeemed during the promotion period for a 6.5% return rate. Total net revenue generated by the program was $1.2 million (approx). Total costs of the program were $230,000 (approx). Total revenue generated by Gift Card with Purchase program is $1 million (approx).