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from a lifetime of personal experience founding and operating small businesses.
Gift certificates are a good way to promote your business. They can extend your reach into the community you serve.
Think of gift certificates as up-scale coupons.
Gift certificates take many forms. I've used gift certificates printed on post cards and mailed to existing customers. I've worked with business owners who had an artist create elaborate gift certificates to be handed out at shows and special events. Stock gift certificates--blank and ready to be filled in--are available at office supply stores and online, but they might not have the "feel" of specially created ones.
Example: I know a lady who runs a wellness center. She started out as a specialist in several types of massage. To expand the wellness center she created, she brought in other specialists--yoga, Reiki, hypnosis, nutrition, and others. She has used gift certificates for the massages she gives. This promotes the center and the other specialties. The certificates come pre-printed in $25, $50 and $100 denominations. Her clients buy these for themselves and to use as gifts to friends. It helps to bring in referrals.
Gift certificates can be for any amount and still be very effective. Depending on the circumstances, a $10 gift certificate can bring you a new customer as quickly as one in the amount of $100.
Example: An artist I know makes costume jewelry. She specializes in using unusual and inexpensive materials--no gold or silver here. What she is selling is her unique and creative ability to bring together everyday things in new ways. She regularly attends local shows and events, and she hands out $5 gift certificates to everyone who stops at her table. Her pins and earrings, bracelets and necklaces sell for prices beginning at $25. She gets a response much better than she would if she posted a 20% markdown. Some people use the gift certificate for themselves right away; others seek her out later or pass them on to friends. Again, the gift certificates bring in referrals.
My experience in my own operations as well as working with others has convinced me that the dollar amount is much superior to the percentage amount. Gift certificates with dollar amounts printed on them get much better attention--and better retention--than those printed with percentage amounts. Anything that's printed with "$10" has the feel of real money.
Example: Small businesses can show appreciation toward employees by giving them gift certificates. One 30-employee company I know hands out $10 gift certificates to employees at holiday time and a $50 certificate on the employee's birthday. The employee can choose from three different types of certificates--a local coffee shop, a craft beer house, or a supermarket.
In this case the gift certificate is a "thank you" to employees. But it is also a very important promotional tool for the three businesses where the gift certificates are used.
After a lifetime founding, operating and expanding small businesses of my own, I spend my time these days coaching and writing about small business. You get free answers from my experience to your questions about anything to do with small business. Email me at AlWarr16@gmail.com and put BLOG in the subject line so I don't delete. Your privacy is always respected.