Driving User Acquisition with Your Gift Card Program
By Ashley Girsch, VP of Operations
In today’s competitive digital marketplace, and with spaces like streaming entertainment and food delivery getting even more crowded, new user acquisition and retention are critical components to growing your business. Attracting new customers is crucial to maintaining a healthy customer lifecycle, as it helps offset the natural churn of customers over time. By constantly seeking out new customers and finding fresh ways to attract them, a company can ensure that it remains competitive and continues to thrive in the future.
Gift cards and codes can be a highly effective way for brands to bring new users into their platform’s economy. By offering gift cards, brands can attract incremental customers and expand their user base. In addition, gift cards are particularly useful for reaching some customers that can otherwise be difficult to reach. For example, those who are unbanked (approximately 5.9 million U.S. households¹), prefer not to store their financial information online (36% of U.S. shoppers²) or use gift cards as a means of budgeting. Additionally, as gift cards are often given as gifts, new users can be introduced to a brand’s service in a positive and organic way.
Gift cards are also a retention tool, as users often return to your platform if they already have gift card credits in their account. Findings corroborate that consumers are more willing to spend when their money is stored on plastic (or online) than in cash.³ Due to that psychological effect, gift card recipients will often overspend the value of their gift cards. According to a recent survey from Blackhawk Network, up to 90% of consumers are willing to spend more than their gift card, on average spending $52 more than the value of a $10 gift card.⁴
Launching a gift card program won’t solve a brand’s user acquisition strategy by itself, however. Once a brand has launched its gift card program, it’s crucial to track and analyze data about the channels and retailers bringing in the most new users through this payment method. This data can help the brand understand which marketing efforts are most effective at driving new users to its platform and can inform future marketing and business strategies. In addition, by analyzing data on the performance of different channels and retailers, the brand can make informed decisions about where to allocate its resources and focus its efforts.
This analysis is easier said than done and often requires dedicated time and energy, but that’s why TDS Gift Cards is here to help. TDS has recently enhanced its Redemption API to provide partners with a field to pass user classification data (new, existing, returning) during redemption, making it easy for TDS to ingest and display this data in our online sales analytics tool TDS Pulse. This makes it seamless for our TDS retail team to understand which countries and retailers effectively drive the most new users and recommend strategies to our partners based on this crucial information. Since this data is passed through and captured by TDS, our partners aren’t required to tap into their own data analytics resources to pull this information. Instead, TDS and our clients have access to this information 24/7 via our online reporting platform and can pull these stats with a click of a button.
By having visibility into this dataset, TDS can better understand which types of marketing spend or campaign timing has the greatest impact on driving new users, which countries are generating the most growth, and the retailers that are producing the most new users in your brand’s economy. Having this information is crucial to the success of your gift card program and the overall health of your user base.
Is your brand interested in finding new ways to drive user acquisition? A gift card program could be the perfect solution for you. If your brand is not currently offering a gift card payment method or is looking to increase its gift card presence, TDS can help. We provide a range of solutions to help brands bring new users into their economy through gift card programs. Contact us to learn how we can help your brand succeed.
Ashley Girsch, a TDS veteran of 15 years, leads engineering integration projects and oversees all day-to-day operational aspects including creative, client support, reporting and print production.
[1] FDIC – 2021 FDIC National Survey of Unbanked and Underbanked Households
[2] Bankrate – Survey: Despite safety concerns, 64% of U.S. cardholders save their information online
[3] Nerdwallet – Does Using a Credit Card Make You Spend More Money?
[4] Blackhawk Network – New Report from Blackhawk Network Examines Latest Consumer Gift Card Preferenes and Use Cases in the U.S.