SALES ORGANIZATIONS LOOKING FOR SERVICE DIFFERENTIATION can look no further than gift and loyalty
solutions to provide that needed edge. There is considerable talk about e-commerce and the use of web appliances to
conduct merchant processing, but do not overlook the enormous opportunity to add value by offering loyalty and gift
card services. By incorporating gift and loyalty solutions into your product mix you will realize the benefits
The key is selecting a program and platform that meets your needs as an organization. Are you
mostly interested in upfront new hardware sales? Are you concerned about merchant attrition because it will affect
your long-term residual income? There are programs and solutions that will meet most any need you have as a sales
organization. Look around, select a partner that has at least an 18 month development plan and make certain the
pricing structure fits your business model. Once you have that in place it is a race to market share.
In many cases the gift and/or loyalty solution is the "foot in the door" introduction to new
accounts where credit/debit then becomes the add-on sale. This is because gift/loyalty is a relatively new concept
for the small to medium sized retailer. Also a merchant does not have 8-10 people per month trying to sell gift
cards like they see with credit/debit. Although gift/loyalty creates the opportunity, the hardware sale or the
credit residual is still a key component to the revenue stream. Eventually, over time, this will change as loyalty
transactions are payment independent. A successful loyalty solution will generate far more transactions per day
than credit processing which is only a portion of the payment mix.
Maybe even more important than selling a gift card solution to a merchant to capture hardware
sales or generate residuals is the opportunity to position your company as a service provider prepared to enhance
the merchant's business. Merchants feel they need to take credit/debit as a payment mechanism but quite honestly
they can find that service simply by looking in the yellow pages.
On the other hand, merchants want to offer gift card and provide loyalty schemes to maintain
their customer base, modify purchase/behavioral habits and increase sales. These services can be resold to existing
accounts and also create opportunities in accounts not previously interested in moving their credit processing.
These sales are more consultative in nature because you can demonstrate how the solution will truly benefit their
Marketing gift and loyalty functionality is quite straightforward. Understand your business model
then select a vendor to secure a short and long-term strategy. Identify who will be responsible for each component
of the service upfront to avoid problems and headaches once you begin closing business. This includes card creation,
merchant setup, terminal downloads, help desk support, documentation and back-end processing. Also, understand the
system capabilities and limitations so that you do not oversell the service. Most vendors provide complete
end-to-end solutions or allow you to choose a-la-carte so you can provide many of the services direct to the
Although gift card processing is fairly straightforward, the competitive playing field is
constantly changing. New products and services including instant rewards, frequency incentives, behavioral purchase
modification and other non-financial transaction-based solutions are being incorporated into the payment platform
everyday. This shift is a genuine opportunity to generate additional revenue from a sale at little or no added
cost of sales and will create a true value-added relationship with your customer.
Gift card processing is just the primer in what is certain to be an explosion of non-financial
based transaction services. Providing gift and loyalty solutions as an integral part of the payment solution sale
is key to customer retention down the road. They are easy to sell, easy to maintain and will be profitable for a
long time to come.