Many businesses already offer gift vouchers, but did you know that simple modifications to your vouchers can significantly impact your business outcomes?
This article dig into how you can boost sales and profits by optimizing your gift voucher strategy.
Guide to gift voucher creation
Gift voucher duration
Consider implementing different strategies for voucher duration.
Long voucher duration
For businesses with low customer lifetime value (LTV), you may want to consider extending the voucher validity period.
Customers tend to procrastinate on making purchase decisions. This can lead to vouchers expiring unused, as customers may forget about them or lose them.
Short voucher duration
For businesses with a focus on repeat customers, you may consider implementing shorter voucher validity period.
This can encourage customers to make a purchase sooner, and they may be more likely to become repeat customers in the long run.
Gift voucher amount
Consider setting gift voucher values slightly above your average order value.
For instance, if your average order value is $49, consider offering vouchers of $50, $55 or even $60.
This strategy can potentially lead to increased profits.
Customers may use the voucher for a single product, leaving an unused balance.
Or they may purchase additional items to utilize the full voucher value.
Let's delve into some mathematical calculations
Consider a scenario where a customer uses a $50 voucher to purchase a product for $49.
This results in an additional $1 of revenue.
This represents an approximately 2% increase in revenue.
This may seem like a small amount, but it can have a significant impact on your bottom line.
What happens when we consider the product's net price?
Suppose the product's net price is $30.
In this case, we purchase the product for $30 and sell it for $49, generating a gross profit of $19.
This additional $1 contributes to a 5% increase in gross profit.
And if you can successfully increase the unused voucher balance to $5, you'll enjoy a remarkable 26% boost in gross profit!
Best practices for gift voucher code
A voucher code, a short sequence of randomly generated letters and numbers.
However, there's plenty of room for optimization and enhanced functionality.
Do not use some characters and numbers
Avoid using certain characters and numbers in your voucher codes to prevent potential confusion and errors during redemption.
The letter "O" and the digit "0" are particularly prone to misinterpretations, especially in certain fonts.
To enhance clarity, it's recommended to exclude these characters from your voucher codes.
Additionally, consider omitting the lowercase letter "L" and the uppercase letter "i", as they can be visually similar to the digit "1" in specific fonts.
Eliminating these characters will enhance the legibility and clarity of your voucher code, facilitating smoother redemption and minimizing errors.
Include some business data in your code
Embedding business-related information into your voucher codes can offer valuable insights and enhance their functionality.
By incorporating specific data points at the beginning or end of the code, you can readily identify key aspects related to the voucher's origin, purpose, and target audience.
For instance, adding the prefix "LOYAL" when issuing vouchers to your most loyal customers facilitates seamless identification and categorization. Upon redemption, you can easily track the usage patterns of these loyal customers.
Some ideas what type of data to include:
- Customer type: clearly distinguish between loyal, new, or potential customers by adding labels like "LOYAL", "NEW", or "POTENTIAL" to the voucher code.
- Customer ID: Integrate the customer's unique identifier from your database to link voucher redemptions to specific customer profiles.
- Promotion activity: categorize vouchers based on the marketing channels they originated from, such as "FACEBOOK", "INSTAGRAM", or "REFERRAL." This helps evaluate the effectiveness of your marketing campaigns.
- Event type: differentiate voucher redemptions based on their association with specific events, such as "CHRISTMAS", "HALLOWEEN", or "BLACKFRIDAY", enabling you to measure the impact of promotional campaigns.
- Discount or voucher amount: include the percentage of discount or the voucher's monetary value to easily track the value of redeemed vouchers.
- Expiration date: clearly indicate the expiration date of the voucher to prevent misuse and encourage timely redemption.
Conclusion
In conclusion, we hope these recommendations will guide you towards achieving better results in your business.
You can also check an article on how you can create vouchers "6 Best Gift Voucher Generator Tools Online"