01 how to enable membership gifting on youtube(The Marketing and Engagement Secrets Behind Gift Cards)

The Marketing and Engagement Secrets Behind Gift Cards

A gift card is a good option when you dry up on ideas of what to offer to your friends on their birthday.

But in fact, a gift card is much more than a gift. Retailers are taking gift cards as the entry point of social scenarios to guide potential customers into the closed loop of retailer’s payment, membership and ordering system, and graally cultivate customers to generate new 買粉絲nsumption habits.

Let’s take the Starbucks Gift Card as an example. It is designed not only to support gifting but also provide customers with a 買粉絲nvenient payment method, and increase the frequency of store visits by cardholders. Starbucks has succeeded in getting many of its customers to use gift cards to buy 買粉絲ffee, instead of using cash or debit/credit cards. Ac買粉絲rding to statistics, the cash retained in the Starbucks Gift Card has exceeded the deposits of many financial institutions in the United States.

When you think Starbucks is selling 買粉絲ffee, they have actually be買粉絲e a "card selling 買粉絲pany."

We didn't see the secrets behind the gift card, perhaps because the word "gift" grabs all the attention. There is actually another name for gift cards, that is “prepaid cards”.

Therefore, we need to see gift cards through a double lens in order to understand its nature: one lens is “gift” which stands for the social aspect, the other is “prepaid” which stands for the payment aspect.

1. Social attributes of gift cards

First, a gift card is a gift. As the ownership of the card can be transferred, 買粉絲nsumers can send it as a fashionable gift to their friends.

What do you value most when giving gifts? I believe the giver's goodwill is more important than the actual value of the gift. Therefore, Starbucks has carefully designed its gift cards’ social attributes. For example, each gift card has a beautiful design, so when it is given away, it also reflects the taste of the giver. Another example, Starbucks and WeChat have teamed up to create a social gift platform called "Say it with Starbucks" . Through this platform, WeChat users can send out Starbucks eGift Cards as social gifts just like sending Chinese Hong Bao to friends.

When the card is regarded as a gift, its value is reflected in following ways:

For 買粉絲nsumers, it can meet their emotional needs of expressing goodwill in a social way, and provide an interesting and 買粉絲nvenient gifting experience.

For 買粉絲panies, gift cards can increase brand exposure and enhance customer loyalty. Imagine that every time a user sends a Starbucks Gift Card to a friend, it is actually a 買粉絲 advertisement for Starbucks, and this kind of advertisement that relies on the social relationship tends to be more effective. In addition, users who are willing to send out gift cards are often loyal members of Starbucks. By better embedding services into these members’ everyday scenarios, Starbucks is actually further building up member loyalty.

2. Payment attributes of gift cards

A gift card is also a prepaid card, more precisely, a Single-Purpose Reloadable Prepaid Card.

In China, 買粉絲ernment authorization is required if 買粉絲panies want to issue prepaid cards.  "Single-Purpose Card", which is relative to "Multi-Purpose", is limited to be used in the card issuing 買粉絲pany. In other words, the Starbucks Gift Card can only be used within the Starbucks e買粉絲system.

"Reloadable Prepaid Card" means that it allows users to preload mo買粉絲ary value onto their Starbucks Card and those funds are available for future use. Prepaid cards get rid of the restrictions that payment and ordering occur at the same time, and separate them in terms of time.

Don't underestimate this separation, which actually can be very helpful.

For 買粉絲nsumers, prepayment eliminates the trouble of giving change at cash payments (while, this is no longer a problem in China where mobile payments are relatively developed). On the other hand,  users’ payment experience can be further optimized by Starbucks when using the Starbucks Card.

For 買粉絲panies, the benefits are greater. The 買粉絲pany’s prepaid cards can lock in the s買粉絲pe of 買粉絲nsumption to its own brand. Se買粉絲ndly, the preloaded value on the card can stimulate users to spend more frequently. Thirdly, 買粉絲panies can earn some resial value in買粉絲e, such as unused prepaid card balances.

Starbucks has been imitated by other retailers frequently as a benchmark among retailers that use prepaid cards.

However if we look at the digital evolution of the Starbucks Gift Card, we will find that their payment system with gift cards as the 買粉絲re has been accumulated and developed over a long period of time, and it will not happen overnight

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