Gift cards are a multi-billion dollar industry that keeps growing, but the spa industry is not getting a big enough piece of this pie. The most popular gift cards are restaurants, department stores, home improvement, apparel, specialty stores and then beauty.
Beauty’s low positioning on the totem pole is likely because spas focus on gift card sales during seasonal peaks (Valentine’s Day, Christmas, Mother’s Day, etc.). But, here are a few stats on why gift cards can be profitable year-round.
– Top occasions for gift cards are Christmas, birthdays and thank-yous.
– Nearly 85% of 25-34 year olds say they are giving a gift card, while only 40% of customers aged 65 and over are planning to give a gift card in the next couple of
– Nearly three-quarters (72%) of customers will spend more than the value of their card.
– On average, the recipient will spend 20% more than his/her gift card value.
– Many of those (72%) who come in to buy a gift card also do some shopping for themselves.
– Customers are 2.5 times more likely to buy something for full price if they pay with a gift card.
– Gift cards have such a high- perceived value that nearly half of consumers would prefer a $25 gift card to a present worth $50.
– 81% of consumers shopping for a birthday gift purchase a gift card.
– 44% of consumers purchase $25 cards, 24% purchase $50 cards, 6% purchase $100 cards and the remainder are scattered over various other values.
– Approximately $25.9 billion is spent on Christmas gift cards, $5.2 billion on Mother’s Day gift cards, $4.9 billion on Father’s Day gift cards and $1.67 billion on Valentine’s Day gift cards.
What do all of these stats mean to the spa owner?
You should put a lot more emphasis and planning on gift card sales year round and should be tracking gift card sales from year to year to maximize growth.
With that said, here are 12 tips to keep gift card sale high all year.
Tip 1: Increase Visibility
Increase the visibility of gift card availability everywhere in your location. Don’t hide them and whisper about them—get them out and shout. Make sure your gift cards are displayed at checkout, put signage in the changing rooms, and don’t forget signage in the windows, bathrooms and styling stations. Put small cards around your retail area stating gift cards are available. Do an online search for gift card displays to find holders and racks to prominently display the cards. Prices will range from $15-$75, and it will be well worth it.
Tip 2: Get Social
Market gift cards on every social media platform you use, such as Facebook and Twitter. Don’t forget to include other lines of communication, such as e-blasts and your website.
Tip 3: Make Purchasing Easy
If you don’t have capabilities to sell cards online, speak to your web designer today. Make sure that a customer can find where to buy them and be able to purchase quickly with no obstacles to overcome.
Tip 4: Design by Occasion
Create special gift cards for certain occasions with unique packaging. Again, do an online search to find sources that sell designer gift card boxes, bags or envelopes to make them stand out or become special for certain events, such as Valentine’s Day, Mother’s Day, birthdays or thank you’s.
Tip 5: Be Proactive
Don’t wait until a client asks to purchase a gift card. Coach staff to upsell gift cards at every opportunity, explaining that they only will bring in new clients for everyone. The front desk staff should always ask, “Are there any special occasions coming up that you might need a gift card for Mrs. Jones?” That statement makes the customer think about events about to take place where a gift card would be perfect rather than saying, “Do you need gift cards?”
Tip 6: Incentivize Staff
Experiment with what might drive more gift cards sales with your staff. Have a contest, and the person with the highest dollar volume in gift cards gets a special prize. The person with the most individual gift cards sales also gets another special prize. To take it a step further, you might want to put a tracking chart in the breakroom during holiday peak periods so everyone can see how they are doing with a contest.
Tip 7: Change Signage
If your gift card signage has been up more than six to eight weeks and it looks the same, it is time to change the signage to attract clients who have viewed it in the past. If it keeps looking the same, the client won’t even notice it.
Tip 8: Market to Other Businesses
If a company is looking for a unique gift to reward their staff or gifts for multiple staff members around certain holidays, make sure they are aware of your gift card packages. Imagine how surprised and happy you would be to get a call from a VP of a local company asking about gift card specials and then ordering 20, 30 or 50 to give to staff.
Tip 9: Cross Promote
Partner with a florist to include a $10 spa card with a Valentine’s Day bouquet or partner with a local candy maker with the purchase of a box of deluxe chocolates. Explain that your card will help them upsell to larger gift amounts for larger profits. Ask the vendor to report back how many gift cards were actually given out.
Tip 10: Analyze
Analyze your gift card sales by holiday, volume and denominations to set goals for increasing sales. For example, know your general gift card sales total and the total gift cards sold for Mother’s Day, Father’s Day, Valentine’s Day and Christmas. Also, determine how many were sold for birthdays, thank-yous, weddings, showers, etc., which is easier if you have gift cards for these occasions. Next, you might want to see what denominations are sold for every category to determine which dollar amount is most popular. Now you can take all of that information and move forward to build bigger gift card sales in the future.
Tip 11: Determine Value
To build bigger gift cards sales, determine the top three values usually sold in each category. For example, if you find that you sell $50 cards the most for Valentine’s Day, followed by $25 and $75 cards, structure next year’s promotion to build greater volume. If you offer those three packages, clients generally will pick the middle number. You can do several things to increase the sales. You can offer $50, $75 and $100 gift card packages to move clients up to a higher level, and you can “weight” certain levels to drive greater sales.
To weight a certain level, when your vendor offers any gift with purchase (GWP) or “value added” purchase, get as many of those as is possible. For example, if your skin care vendor has a general promotion kit that sells for $15 but has a perceived value to the consumer of $50 or higher, that is a perfect tool to drive gift card sales. You could beautifully wrap those for the specific holiday creating an eye catching display with signage stating, “Purchase a $100 gift card and receive a wrapped skin care gift worth $50 to give to your special valentine”.
Tip 12: Make Appealing Packages
Make your packages really appealing to encourage upsell of a gift card. For example, a $250 Gold Gift Card Package could come with a day of services, specially wrapped gift worth “perceived value” $100 and gourmet lunch. This encourages new clients to experience multiple services that they might return for and to spend more time in the salon and spa to purchase retail product.
Make Gift Card Sales Soar
With some additional focus and repeated marketing efforts, your gift card sales can soar to new heights bringing a greatly increased revenue stream to your spa and new clients for a growing future.
A Friend’s Story
Recently, my wife dropped the hint (for which I was grateful) that she would like a spa gift card for her birthday. Thinking that would be an easy gift, I looked online at the spa’s web site but wasn’t able to find any.
Determined to give her the gift she really wanted, I went to the spa. When I asked to purchase a gift card, I got the strangest look from the receptionist. I was asked to wait while she grabbed a manager. While I waited, I thought about how much easier it would have been to go to the ATM to give my wife cash with a note to enjoy the spa.
Finally, a manager approached me to confirm that I was the one asking for the gift card. After she located one in a drawer, she asked me how much I wanted to spend. She then asked if I needed to put the card into something. I actually never thought about that, but I told her it was a birthday gift for my wife. She said they normally sell cards around the holidays but went into the office to find an envelope. A few minutes later, with envelope and gift card in hand, I left the spa with somewhat of an unfulfilled feeling. I just gave $200 to people who didn’t seem to want it.
Afterward, I went to my favorite electronics store for a graduation gift for my son. There was a whole array of gift cards for different occasions—all were branded with the store name. I grabbed a graduation one, handed it to the clerk, told him how much to put on it and was out the door in a minute. Before I walked away, the clerk reached under the counter and got a box for the card shaped like a smartphone and handed it to me. What a pleasant and speedy experience.
This article was originally published in SkinInc.com.