Are gift cards right for your loyalty program?

]As the online marketplace expands with consumers, and with competing businesses, brands are trying to do more with less. That includes advertising more and spending less, which means many brands are trying to not only convert consumers, but to create loyal consumers. One way is through loyalty rewards that consumers actually want. Some research has found that smaller rewards – music or book downloads or other e-merchandise – is a good option compared to consumers saving points for years to get a free hotel or airline purchase.

But another trend is for brands to send gift cards as a reward.

“From a data/analytics/insight perspective, the generic branded, especially the reloadable cards are more important [for brands] and you glean more insight into the interests of the consumer,” said Mark Johnson, Loyalty360 CEO. ”

What can brands do to ensure that consumers actually use the cards? Simple: make them easy to use.

“Make sure the cards are tailored to the interest of the end user [the employee, the brand participant, etc] and that [the card] can drive sustainable behavioral change that is beneficial to the card holder and issuer,” said Johnson. “They also need to be measured for effectiveness, interest and responsiveness to see how effective they are at driving said behavior.”

All this points to brands paying attention to rewards customers to see what they are buying and where and then implementing a loyalty program, using gift cards or not, based on those behaviors.