Incorporating vouchers / gift certificates into your website
Fri, Dec 16 2005
The final lead-up to Christmas is a crazy time and everyone seems to be scrambling to stay on top of things, but it can also be a really interesting time to watch what various companies are doing and learn new tricks for your own business.
This is particularly important in relation to eBusiness. It used to be that all a website could do was display information about your products and services, and maybe do online sales. That's a great start but there's so much more you can do now that you shouldn't limit yourself to just a basic ecommerce site. Website content management systems have become extremely sophisticated and allow you to do many things you might not even realise are possible online.
For example, Payless Shoes has recently been making use of "vouchers" through their website at www.paylessshoes.com.au. The website is set up so that it can automatically generate a one-use voucher as a PDF file and email it out to the user. On the voucher is a "voucher code" which can be used to gain a discount when purchasing products.
The most obvious use for something like this is to sell gift certificates online: for example, you could put a $20 gift certificate in your online store as a virtual "product". Then when someone buys it, they are automatically sent a PDF file by email which they can give to a friend. The gift certificate can be redeemed in a couple of different ways: they can either print it out and take into a physical shop to get a $20 discount on a purchase, or they could go to an online store and enter the voucher code into the shopping cart to get a discount. The system can track the voucher codes so each voucher can only be used once, and the retailer can view a report to see how many vouchers have been issued, how many have been redeemed, what the outstanding liability is, etc.
Overall it's a very neat way of extending the "gift voucher" concept to an online store.
But even that isn't thinking broadly enough. Once you have a system to generate and manage virtual gift certificates there are many other things you can do with it.
For example, the Payless Shoes website has a "Membership Registration" area where visitors can submit their email address to receive information about discounts and promotions. Obviously any retailer would *love* to build up a database of potential customers so they could regularly send marketing material to them, but of course the hard part is convincing people to voluntarily opt-in to the database.
The Payless Shoes solution is simple and effective: pay them to sign up! When visitors sign up on the Membership Registration page they are automatically sent a voucher by email which they can use to receive a $5 discount on future purchases. Site visitors are happy to opt-in to the list to receive the $5 voucher, and Payless Shoes know that gaining a new customer is worth far more than the $5 face-value of the voucher. They also know that the actual redemption rate of vouchers and gift certificates is very low, with many never being used. So while visitors who sign up feel as if they've just personally been given $5, the actual cost to the retailer when averaged across all customers is far less than that. Not only that, but it's not even a real $5: it's a "promise" of a discount some time in the future. There's no immediate out of pocket cost to the retailer.
No wonder retailers love vouchers and gift certificates so much!
As you can see, gift certificates and vouchers are a very powerful marketing and customer retention tool that can be applied to a wide variety of situations. I'm sure if you stop to think about it you can think of many other ways you could use them: perhaps give a voucher to any existing customer who refers a new customer to you. Or have your customer database track purchase patterns, and send a voucher to past customers who haven't made a purchase for some time to encourage them to come back. Or use your customer database to automatically send a gift certificate to customers on their birthday. Or just run a "Merry Christmas" special where you send a voucher to all your customers and set an expiry date on the voucher to encourage quick purchases.
If you come up with any other ideas I'd love to hear them!
Finally, I'd like to wish you and your family a Merry Christmas and Happy New Year. This will probably be the last eBusiness News until 2006, so I'll be back in January with more ideas about how you can make money with eBusiness. In the meantime I hope you have a relaxing holiday period and good times with friends and family.