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Electronic Gift and Pre-Paid Card Program Updates MSP Training April 29, 2009
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2 Gift is a Quickly Growing Industry Gift Card Sales – $50 billion in 2005 – $57 billion in 2006 – $61 billion in 2007 – $65 billion in 2008 (estimated) – $80 billion by 2011 Adult Consumers … – Received 4.83 gift cards on average in 2006 & 2007 – Spent $53 per card in 2007 up from previous years Gift Card Popularity – The #1 gift during the holiday season – 50% of gift cards received during the holiday season were redeemed by the end of January – Average breakage ranges from 4-15%
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3 Merchant Benefits Increased Sales – Attract new customers to the business – Retains full face value = no cash back – Switching from paper certificates to gift card can result in 2- 4 times the volume…by capitalizing on impulse purchases – 61% of recipients spend more than the card value – Most consumers spend 25% more than the face value of the card when redeeming a card received as a gift Reduced Costs – More efficient and cost effective than paper – Industry average is $1.22 to issue and $1.22 to redeem Increased Security & Reduced Fraud – Cards have no value until activated Easy to Use – Works seamlessly with same solutions used for credit cards – Electronic reporting and tracking
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4 Traditional Gift Target Markets Specialty Retail – Gift shops – Book/CD/Electronics stores – Wine/Liquor stores Restaurants – Fine dining – Quick service – Coffee shops Entertainment – Movie theaters – Amusement/recreation – Video/game rentals Personal Services – Auto detail – Beauty Salon/Spa
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5 What’s New….
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6 Basic Cards New Card Design Basic Card = 50 cards DBA name, complete street address and phone Envelopes & Carriers included – 30 “General Purpose”, 10 “Thank You”, and 10 “Happy Birthday” Recommended for single location merchants Reorders revert to Standard Card Package (100 card minimum) Cards delivered within 5 business days! MERCHANT NAME STREET ADDRESS CITY, STATE, ZIP PHONE NUMBER
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7 All new card single card designs 16 card styles – 3 gift focused – 7 focused on verticals Take out & delivery Restaurant Landscaping, florist, nurseries Sporting goods, sports teams, golf courses Coffee shops Spas, salons Auto repair, auto dealers, car wash – 6 Solid Color Styles Standard Card Options
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Standard Card DesignFont Colors One color logo OR 5 lines of text – 3 text-style options ( Times New Roman, Arial, Brush Script ) – 12 imprint color options – two new colors Orange and Pink Order the quantity needed – 100, 200, 500, 1000 Envelopes & Carriers included – Per 100 cards - 20 “Gift”, 20 “Happy Birthday”, 20 “Thank You” and 60 “General Purpose” Cards delivered within 10 business days from proof approval 8
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9 Custom Cards No changes Totally customized design – Full color front/black back – Design services available Minimum order quantity of 500 Carriers available for purchase (not included) Cards delivered within 21 business days from proof approval
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Card Carriers 10 General purpose. Can be used for Merchandise Returns, Promotions. Comes with Basic & Standard packages Happy Birthday. Comes with Basic & Standard packages Thank You. Comes with Basic & Standard packages Gift. Suitable for all occasions. Comes in Standard package ** Additional carriers can be ordered in packs of 100. A combo pack can also be ordered.
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New Display Rack and Backer Design 11 Each location will automatically receive one acrylic Display Rack with backer Deployment materials detail how to setup and display cards An actual card can be placed inside the display backer for further brand enhancement
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12 Updated Collateral and Sales Tools Solution Sheet Promotional Solution Sheet Card Sample Kit Standard Card Style Guide – Used by merchants to select card style/color Graphic Specifications – Helpful for cards with logos or for custom cards All are available on the MSP Infocenter Top three are also available in hardcopy
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13 It’s Much, Much More than a Gift Card Program Promotional Marketing Tools – Discount cards mailed to target prospects – Gift with purchase Corporate Incentives – Sell to companies to use as employee incentives – Use internally for rewards or spiffs Prepaid Vehicles for Recurring Services – Coffee shops, auto detail, movie theaters Merchandise/Service Credits – Cash back is not the only way Customer Appreciation – Turn service issues into a retention opportunity Fund Raisers – Sell cards at a discount to schools/non-profits Budgeting or Limiting Expenses/Spending – Gas allowance card, B2B runner purchases, relocation
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14 Let EGC Help You…and Your Sales Move Merchant Processing from the Competition – Leading with a card program can be the driver to gaining the merchant processing business Improves Merchant Close Rates – Adds value to the processing relationship – One stop shop for all payment processing needs High Percentage of Current Clients are Targets – 70-80 % of merchant processing merchants are in target markets
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15 Have your Merchant put a $ amount on a new customer…. Item Description - Car RepairValue Typical Sale To Customer325 Typical Repeat Customer Visit in One Year3 Typical Length of Relationship with Customer in Years7 Typical Lifetime Revenue for a Customer6825 % Merchant's Net Profit on Goods and Services0.65 Lifetime Net Profit Per Customer4436.25
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16 Calculation on Cost of One Gift Card – 100 Standard Cards Item Description - Car RepairValue Trans & Card Cost Typical Sale To Customer325 51.39 Value = $50. Cost of Card = 1.39 Typical Repeat Customer Visit in One Year 3 0.35 (Transaction Fee for one Card) Typical Length of Relationship with Customer in Years 7 1 Typical Lifetime Revenue for a Customer 6825 273.26 (51.74) Total Cost of Card + Trans Fee % Merchant's Net Profit on Goods and Services 0.65 Lifetime Net Profit Per Customer4436.25 177.619 (Total Net Profit - 1 Time Customer)
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Sales Process and Change Plans New card designs are available to sell immediately EGC set up requests with old card designs will be honored until May 31, 2009. Printed collateral including Card Sample Kits are available however must be ordered
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18 Questions and Thank You…
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