So as I see it, mobile technology will minimize the friction at the POS, and social will further spread the offer making it even easier for a retailer to benefit from the basic principles found in traditional Gift & Loyalty solutions. You can’t get much more old school than gift cards, and the CUSTOMER CLONING principle of gift cards will surely be incorporated (and improved upon) with whatever mobile/social/gifting product emerges as the leader.
The close parallel of this Merriam-Webster’s definition to one of the major benefits of gift card programs is uncanny. Think about it, a retailer’s best customers are the ones that will purchase gift cards and then give them to their friends, family, and business associates. It just makes sense that these gift card recipients will have similar demographics, spending habits, and likes and dislikes. So at practically no cost to the merchant, they have walking in their doors a new customer cloned from their best and most profitable customer segment.
This new “cloned” customer will come in – heck they have free money burning a hole in their pocket – and when they do, the odds are that they will stick around. Retailers can then cultivate this new first-time cloned customer into a future best customer with loyalty program techniques that will yield a high customer lifetime value.
Studies show that the average cost of acquiring a new customer is 5-7 times higher than the cost of getting a current customer to buy again, so the benefits of gift card cloning are huge. For the cost of the plastic card a merchant is driving an extremely qualified new customer in their door. Considering the shotgun approach taken by most small business CEOs in spending significant dollars on expensive mass media advertising, incorporating gift cards into a business’ customer acquisition strategy is a no-brainer.
Gift cards allow a merchant’s best customers to give a gift of their business to folks just like them. That gift can also be thought of as a recommendation of, “I like this place and you will too.” So not only do gift cards clone customers but they also bring Word of Mouth (WOM) marketing down to a plastic card level. In today’s consumer environment the Internet has magnified WOM by making it easy to find recommendations and even have them pushed in your direction. Today’s merchant can take advantage of this time-tested marketing methodology that is making a comeback on the Internet and push a unique twist to it down to the face to face POS environment.
The cloning concept is a common sense principle that can easily be understood by the small business CEO, and cloning is just one of the many benefits that a solid gift and loyalty solution can bring to retail merchants. So as mobile and social media are molded into solutions that claim to help merchants acquire new customers and increase customer longevity … always evaluate how they improve upon the basics, like customer cloning.
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