59 BUSINESS ADVICE Many businesses, particularly smaller or growing ones, have yet to fully tap into the potential of loyalty programmes. Now is an opportune moment to explore one of the most effective and accessible tools available: gift cards. Recent research from the Gift Card and Voucher Association (GCVA) sheds light on how companies can leverage gift cards to create or enhance their loyalty programmes. The study, based on responses from 1,000 UK adults and insights from 36 GCVA member organisations, offers valuable guidance for businesses looking to strengthen customer relationships and drive growth through loyalty initiatives. The impact of loyalty schemes Understanding customer motivations is crucial when developing an effective loyalty programme. The GCVA study reveals that 25% of consumers consider loyalty schemes a key factor in their purchasing decisions, with 11% citing it as a major influence. This underscores the significant role that well-designed loyalty programmes can play in shaping consumer behaviour. Gift cards: a powerful loyalty tool Gift cards are uniquely suited for loyalty strategies based on the “little and often” reward concept. They offer flexibility and immediate value, making them an ideal tool for driving engagement. The universal appeal of gift cards allows customers to choose products or services they truly desire, adding a personal touch to the reward experience. The power of modest, frequent rewards Contrary to popular belief, small, consistent incentives can have a more significant impact on fostering long-term loyalty than occasional large rewards. The GCVA research shows that 38% of consumers are more motivated by regular, moderate rewards compared to just 12% who prefer infrequent but larger incentives. This highlights the importance of reward frequency over size for the majority of customers. Customising rewards for different audiences A successful loyalty programme should offer a mix of incentives catering to diverse customer needs and preferences. While some customers may be motivated by smaller, frequent rewards, others might seek more exclusive benefits. For instance, in the fashion retail sector, many businesses have implemented tiered loyalty programmes that offer gift cards or small discounts to regular shoppers, while providing high-value customers with exclusive events or larger rewards. Measuring and adapting To ensure long-term success, businesses must continuously evaluate their loyalty schemes. Tracking key metrics such as customer retention rates, repeat purchase frequency, and customer satisfaction provides valuable insights into programme effectiveness. Regular surveys and feedback collection can offer qualitative data on customer perceptions, allowing businesses to refine their loyalty strategies and remain competitive. Gift cards play a vital role in today’s loyalty landscape. By implementing a loyalty strategy based on small, frequent incentives, businesses can create deeper connections with their customers. Customising rewards, ensuring consistency, and continuously adapting based on customer feedback are key to long-term success. Companies that embrace gift cards as part of their loyalty strategy will be well-positioned to enhance customer satisfaction, drive repeat business, and ensure sustained growth in an increasingly competitive marketplace Dr. Hannah Shimko is the Director General of the Gift Card and Voucher Association (GCVA), an organisation dedicated to promoting the gift card industry and supporting businesses in leveraging the power of gift cards for customer engagement and loyalty. HARNESSING GIFT CARDS Dr. Hannah Shimko, Director General, Gift Card and Voucher Association (GCVA), shares how, in today’s fiercely competitive market, customer loyalty is a precious commodity, and gift cards are an effective took
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