November 21, 2017
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Gift giving is now catching on with brands as a way to connect with consumers. We live in a "relationship era," and one of the best ways to form or strengthen a relationship is through gift giving.
Retailers have known the secret of gift giving for years. As an example, Banana Republic periodically sends my wife $25 gift cards. There are no strings attached. She is free to spend whatever she wants. Best Buy sent me a gift card valued at $16.50 because of my participation in its frequent shopper program. Again, no strings attached. We feel good about these gifts and are highly motivated to visit the stores and spend our found money.
Why do these retailers give away free money? Because it works. At a recent gift card event, we learned about the following statistic: gift cards are 10 times more effective at driving customers in the door than any other promotional activity.
Gift giving - in the form of gift cards and gift incentives - is known to be a superior alternative to coupons and deals. Gifts and gift cards are highly engaging and somewhat irresistible. They are relationship-enhancing. Gift cards allow marketers to invite consumers to enjoy their brands with no strings attached. And they put consumers in the mindset to spend, not save. That might explain why my wife spends on average $150 every time she receives a $25 gift card from Banana Republic.
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