GiftCard Partners Blog

At GCP, we typically blog about how gift cards are being used to incent and motivate employees, customers, or partners, as well as trends around incentives. However, this article by Roy Saunderson of the
Recognition Management Institute  has motivated me to highlight the importance of not just recognizing and rewarding your employees, but… inspiring them. “How do we get them to commit their hearts and spirits to the mission of the company?” Roy asks…we love his answers and we hope they inspire you to truly influence the workplace in a meaningful way all year long. Click here to read:
Incentive Magazine’s, 10 Ways to Inspire Employees at Year End

The growing demand for receiving gift cards doesn’t stop at holiday wish lists and workplace incentives. The simplicity of gift self-selection and using gift cards to stock the household with needed items, are highly redeeming factors for giving or offering gift cards in today’s difficult economy. Loyalty rewards programs are looking at this demand seriously and we’re starting to see gift cards infusing points redemption programs for credit card rewards, airline miles and consumer loyalty programs. The reason for this is simple;
gift cards offer flexibility and help people pay for everyday items….why wouldn’t loyalty rewards programs offer them to engage customers? For the same reasons, cash back programs are on the most wanted list for rewards program participants. But people are also redeeming in droves for gift cards, above more traditional rewards like travel and merchandise. Each rewards points system offers varying redemption options, but offering gift cards should be considered a priority in a world where consumers demand choice and often thriftiness.
NerdWallet takes a look at  American Express’s rewards program and rates gift cards as the top popular choice, above travel rewards and all other options (listing many as “Bad Redemption Options”). Of course, this isn’t the only perspective for why you should offer gift cards as a redemption option in your program…but as the 22nd most valuable brand in the world, American Express’s rewards program is also one of the most successful rewards programs in the world. What’s in YOUR rewards program?

The second and third quarters of 2012 included GCP’s visits to several meetings, conferences and events, including The Incentive Marketing Association (IMA) Conference, The Motivation Show, and the Employer Healthcare & Benefits Congress. Each meting contributed to our holistic and evolved strategy for how to approach our clients’ gift card programs in order to attract and market to incentive customers. What were some key findings, insights and trends from these forums?
The IRF and the IGC commissioned Aspect Market Research Group to size the B2B gift card marketplace (U.S. incentive/loyalty). The study included 369 surveys, compiled from company executives who manage incentive and loyalty programs that include gift cards, and it sought to answer the question: “What do U.S. businesses spend on gift cards every year?” They quantified the market as $2.7 billion which does not include Scrip and Third Party. We will share the entire study with you once it becomes available. Here are are a few highlights:

The first quarter of 2012 included GCP’s visits to many meetings, conferences and events, including the PrePaid Expo, the InComm Partner Alliance, the South Florida Success Expo (SWFL), and the Loyalty Expo. Each meeting contributed to our holistic and evolved strategy for how to approach our clients’ gift card programs in order to attract and market to incentive customers. What are some key findings, insights and trends from these forums?
- Retailergift card revenue from in-store sales was 52% of total gift card sales
- Gift card revenue from websites was 3% - Gift card revenue from B2B Sales was 17%. - Gift card revenue from 3rd Party Malls was 23% - Gift card revenue from Web Aggregators and Distributors was 6%
2012 started out very strong for the B2B portion of the gift card market, despite changes that occurred in debit card reward programs. As a result of the Durbin Amendment, financial institutions no longer offer rewards points for use of their debit cards, resulting in a marked down-turn in B2B gift card purchases for the loyalty program channel of gift cards. How are companies like GCP dealing with this, while increasing sales for our retailer and merchant clients? GCP is expanding the end user market for gift cards by micro-targeting workplace incentive decision makers in manufacturing, energy and utilities, healthcare, call centers and insurance companies. GCP has compiled many studies and much research for an eBook that we will publish in the coming months, and we look forward to sending it to you. This eBook is one part of our multi-touch approach to grow the end-user gift card market by educating and proliferating incentive program concepts. As credit card rewards programs “lose some luster”
ⁱ amongst consumers, GCP feels that the end-customer/employer segment is crucial to growing retailer and merchant gift card programs. Simply put, the end user market diversifies the portfolio of potential customers for B2B gift cards, and it’s working! GCP is happy to announce that B2B gift card sales are up in Q1 of 2012 against Q1 of last year.

Companies that work hard to set themselves apart often attract and retain top talent by offering voluntary benefits such as health and wellness programs. Offering a voluntary health and wellness program can be very attractive to prospective employees as a self-improvement perk, as well as motivating to employees. Recent legislation, wellness program grants for small businesses, and potential healthcare insurance cost savings have facilitated a recent rise of health and wellness programs.

The results of such programs go well beyond motivation and lead to real cost savings and tangible positive results on employee performance, long term health, and subsequent company healthcare budget savings. Here are five compelling reasons why you should invest in your health and wellness program starting today:

1. Employers Can Shape a Healthier Workforce

Can employers really impact their employees’ state of health, as individuals and teams? The answer really is YES!

The Centers for Disease Control and Prevention states that 65% of adults do not exercise regularly, ½ of all adults have high cholesterol, one out of every four adults has high blood pressure, and 30% are obese. These all-too-common health conditions can impact one’s ability to be highly functional, active, and productive in the workplace, but they also contribute to other chronic illnesses, which account for 75% of all health care costs in the United Statesⁱ. Many of these conditions can be prevented, or managed by participating in a mix of education, incentives, coaching, and success tracking offered in a health and wellness program.

In 2011, GiftCard Partners ran a survey to determine what percentage of employers included gift cards as voluntary workplace program incentives in general, as well as for participating in their health and wellness programs. We discovered that 80% of our respondents include gift cards as incentives and of those, 30% are offering gift cards as health and wellness program incentives. This is an impressive number of employers offering health and wellness programs as part of their voluntary benefits contributions.

2. What to Expect from your Health & Wellness Program

Many companies begin their health and wellness programs with offering employees a health risk assessment or biometric screening as a baseline for potential health and wellness improvements. Common factors in these programs include: promoting wellness, adapting the work environment for healthier conditions, health coaching and education, online tools and resources, nutrition and physical activity programs, tobacco cessation, weight management, injury prevention and ergonomics, substance abuse programs, and condition management, like high cholesterol, hypertension, diabetes, and mental health wellness. All of these important healthcare factors can be inadvertently shifted to the background of our minds when commuting schedules and working dominates our waking hours.

Employee health can be improved and company health care costs are often lowered via less utilization of health care services. Individual and team performance often improves and employee satisfaction can be effected, therefore retaining those employees who wish to improve their situations. The benefits of such programs include positive outcomes for the individual employee, the teams they work in, as well as for the company as a whole. One of our survey respondents, a hospital in Pennsylvania stated, "Our organization provides gift cards to employees for successfully completing our wellness initiatives. By offering the gift cards we have increased our participation from 15% to 39% in the first year."ⁱⁱ 

Enrollment and increasing participation over time can be a big challenge, but most want to know what their return on investment will be. Many wellness program vendors tout high ROI as part of their sales and marketing practices, so we look to non-profit organizations and those who provide truly objective studies and research for clarity on this topic. The National Institute for Health Care Reform cautions that realistically; employers are most likely to break-even by the second or third year running their program, and should be ready to see “reasonable returns in the fourth and fifth years”, and ongoing from there.

On this type of tiered timetable, the Institute reports “an average of 3.27:1 return in the form of reduced medical costs over three years and 2.37:1 in reduced absenteeism costs over two years. Although reports on mature program ROIs vary, several experts suggested that the most effective programs—“the ones that do practically everything right”—might ultimately yield hard ROIs in a range between 1.25:1 and 4:1.”ⁱⁱⁱ According to the Centers for Disease Control, companies with wellness programs also tend to attract more talented employees, have better employee morale and experience, and less turnover.

3. How to Overcome Participation Obstacles

Financial incentives have been found as key to initial enrollment and continued participation in health and wellness programs, which help companies maximize their investment in the program. Starting off strong with hitting your participation goal is important but how will you continue to engage participants and increase your participant rate? Gift cards, cash incentives, vacation or personal days, insurance premium contribution reductions, and health savings account contributions are amongst the most common forms of participation incentives.

Gift cards such as merchant filtered cards, like the CVS Select^® actually filter out purchases like cigarettes, alcohol and items that don’t support a healthy lifestyle. Other healthy gift card incentive choices include weight loss and weight control options, like Nutrisystem or healthy quick service food options, like SUBWAY. Regardless of the incentives you choose, they work to increase participation and maintain engagement over time for optimal results.

Other successful strategies include setting up teams, so “friendly peer pressure”, teamwork and a sense of competition play a part in ongoing enrollment, wellness reminders posted around the office, email tips for a healthier workplace, paystub wellness reminders, and implement a fast track component that rewards for fast results.

Robert Pillar, President of WellnessIncentivesPlus.com reminds us of the 80/20 rule: “Not everyone will participate in your program….Concentrate the bulk of your time and effort on those that are willing to make changes in their health, fitness and well-being.  Don’t ignore or forget about the 20%– but spend the majority of your time continuing to motivate and inspire them to make a difference in their lifestyles.  The other 20% may come aboard over time.”

4. How to Measure Results

Employers themselves need motivation to continually prompt enrollment and engagement in your program. You will need to see and report on results to be able to show return on investment, not immediately, but over the course of a few years after getting started. In her Corporate Wellness Programs 101 presentation, Denise J. Holland, President of Inside Employee Wellness & Consulting directs employers to hone in on how to measure results by defining your company’s wellness philosophy. She asks: "what are your most important goals and improvement criteria? Medical costs only, absenteeism, preventative screenings, employee participation, lifestyle improvements…all of these?"

So what can real life health and wellness program results look like when matched to such focused criteria? Holland worked with a large manufacturing company with around 950 employees nationwide to develop their health and wellness program; they reported the following results from 2008 through 2010: