by Alex Palmer | April 18, 2017
At last week's Flourish: The Growth of Branded Currency conference, attendees from many parts of the gift card and branded currency gathered for education sessions, networking, and more. Taking place in Omaha, NE at the Doubletree by Hilton Omaha Downtown, one of Flourish's panel discussion tackled the topic of "The Promotional Use of Branded Currency," with participants bringing in a variety of viewpoints about what works and what doesn't in using gift cards, points, and more in creating promotions. Here are a few highlights of that discussion.

Matias Marquez (founder and chief operating officer for Buyatab): What does a promotion mean to you, and what do you get with promotions that run on gift cards? 

Rob Grumbach (CEO and cofounder for ARM Marketing Inc.): When people think of promotions they think of something on the back of a cereal box or contests or sweepstakes. We're of the mindset that those things just don't work anymore. The generation now says, "If you want me to do something, there has to be something in it for me." Offering a contest where you enter to win $10,000 by switching to paperless banking, there's no real incentive. You're going to give away three prizes and I'm most likely not going to win it. But we're doing programs where we give away $5 gift cards to convert to paperless. Promotions used to be broad, it's about engaging on a one-to-one basis now. 

Mitch Brody (CEO of GTFD, gift card consultant for Atom Tickets who previously launched closed-loop gift cards for Fandango, MovieTickets.com, and more): I look at promotions in terms of customer segmentation. For new-customer acquisition, you might have to do a deeper discount than you would with a lapsed-customer reactivation or a loyal customer. 

Maddie Holeksa (senior program manager for Buyatab): For us, promotions mean whatever clients want them to mean. It's adding a coupon into a receipt, adding a bonus to a purchase, it really depends on the industry you are in. It's creating the experience that the client wants to.

Marquez: What kinds of promotions have you recently participated in that you think really worked or didn't?

Holeska: What I've noticed has worked with our clients in the last six months to a year is matching in-store with online -- making sure what they're offering to customer in a brick-and-mortar store is available to them with gift cards online. And always, BOGOs [Buy One Get One] are popular.

Brody: Targeted promotions based on data is something I've seen more of now than ever. At Atom Tickets, we have an app and the telemetry that captures data is very specific and we use that data to target certain types of movies, etc. based on that, and promotions follow that. In terms of what's "out": untargeted daily deals. People are looking for targeted promotions.

Grumbach: There's so much segmentation going on, that we're doing work with clients that are taking certain very niche segments and getting them to move the needle. In the automotive category, to get more customers to try test-drives, we just launched a promotion where there's an app built right into their website to track the customer's movement on the website. When someone starts to build a package for a specific vehicle, a digital offer pops up to take it on a test drive and get registered for a reward. It's smaller focus, but the results are much bigger.

Brody: Usually if it sounds too good to be true, it's too good to be true. Five dollars isn't too good to be true.

Marquez: What about the ROI of promotions: What does a successful promotion look like, and what are the key metrics? From our perspective, it really varies. For a promotion we did for Tim Horton's the measure was app downloads. So they preloaded digital gift cards into the apps so when you downloaded it, there was a gift card already there. 

Brody: For Fandango, we used to do different offers for different segments and for new-customer acquisition, the ROI was usually 2.6x. For lapsed, it was 6x to 9x, and for loyal customers, it was usually 9x to 12x. The ROI could be very substantial depending on the channel and depending on what the promotion is.

Grumbach: We do a lot of work where we are migrating people from paper billing to paperless. Our client, BC Hydro, were averaging about 5 percent penetration on an annualized basis. In our first program with them, we put out a call where users got a $5 gift card for going paperless. We saw a 20 percent penetration rate. Metrics vary by program, but when we see one-on-one engagement and a relevant offer and they have choice of reward, it goes through the roof. The ROI came inside three months.