How can I make money without doing anything? Author Michael Phillips says that “Money will come when you are doing the right thing.” The right thing could mean following the Golden Rule. As restaurateurs we can give our guests what they want and make a healthy profit at the same time with gift cards. “From a purely mercenary perspective, gift card redemption is never 100 percent. Industry estimates suggest that approximately 10 percent of gift cards are never redeemed, meaning that the more gift cards the pizza shop sells, the more they gain from unredeemed cards,” says John Heaney of SparkBase, a leading gift cards program provider. I like the sound of that.
Gwen Lahrs, senior marketing manager of Pizza Ranch, a 159-unit chain in the Midwest, asserts that “gift cards make an excellent, affordable and flexible gift choice. They are available in any dollar amount, from $5 to $500, and they are re-loadable.” Making them even more appealing to the consumer is that while you may not know precise selection of the intended recipient, a gift card is still personalized, as it is redeemed for their meal of choice.
An interesting phenomenon in gift cards is that they are not just for gift giving. Jeff Lipp, executive director of Heartland Payment Systems’ Gift and Loyalty program, says: “Many consumers are buying them for themselves instead of just for others. If one of my local pizza places offers to give me $10 on the house if I put $40 on a card, I am stretching my money and earning a reward for consolidating my pizza purchases to a single location.” The message? We can offer guests easy shopping and rewards for doing good.
How do operators benefit? Lahrs states that gift cards help build relationships with new guests and strengthen relationships with existing loyal guests as they increase the frequency of their visits. Personally, I have built many meaningful relationships through script programs and found that the typical gift card holder will spend more than the actual amount of the card and usually brings others to dine with them.
Lipp encourages operators to strategize when offering gift cards. “Gilliano’s Pizza & Ice Cream Parlor in Woodland, Washington, rewards customers for loading a minimum of $30 onto their cards by adding an additional 25 percent onto the card,” he says. “When you set the minimum amount to receive a reward higher than the average ticket, you will see customers load more just to receive that reward amount. In the last year, over 40 percent of Gilliano’s gift card purchasers loaded an amount on the card high enough to receive the reward. Sixty-five percent became repeat visitors.”
How do we market this win-win offer? Pizza Ranch dedicates an entire page of its Web site to gift cards and promotional deals. To further guarantee guests are aware of gift card offerings, Pizza Ranch staff is fully trained on how to field any questions guests may ask. Visibility and awareness are crucial. Heaney advises that operators should “Have cards visible with tabletop and countertop promotions,” he says. “Customers need frequent reminders that gift cards are available.”
Also, have your staff equipped with a list of suggestions for when gift cards can be given — they aren’t just for the holidays anymore.
Gift cards increase frequency, average ticket and attract new customers. They are not a lazy gift … they are the right things to give. Let’s help our customers figure that out.
Scott Anthony is a Fox’s Pizza Den franchisee in Punxsutawney, Pennsylvania. He is a monthly contributor to Pizza Today and a frequent guest speaker at Pizza Expo.