Reward new members the moment they join your membership by presenting them with a complimentary gift card upon signup. Gift cards are exceptionally well-suited to paid membership programs, as the free credit simplifies the process for customers to understand and justify the value they're getting in exchange for the cost.
Although this credit typically represents a 10-20% discount on the AOV (more on this below), offering it in the form of a gift card carries important implications.
Why offer a free gift card at signup?
Give customers a clear reason to buy
By presenting the gift card as an immediate benefit, you make the decision to join more attractive and easier for members to justify.
Deliver immediate value
A gift card delivers instant value to the new member, distinguishing your membership program from others that may offer long-term, but less tangible benefits.
Turn a discount into a gift
Transforming a standard discount into a gift card reframes the value proposition of the offer. It feels more like a gift rather than just monetary savings, enhancing the perceived value and appeal.
What business objectives does a gift card offer achieve?
Improved conversion rates
By presenting a cash equivalent reward upfront, your making the decision process easier for potential customers and enhancing the appeal of the offer, leading to higher conversion rates.
Higher member retention
The initial goodwill created by offering a gift card sets a positive tone, encouraging members to continue their association with your brand. For first time customers, gift cards can motivate members to make that initial purchase, increasing the likelihood of repeat business and long-term engagement.
Higher customer satisfaction
Members receiving a gift card perceive a higher value in their membership, which enhances overall satisfaction. The experience of receiving a gift card creates a positive association with your brand, which can lead to higher satisfaction rates and word-of-mouth referrals.
What amount should I offer members?
It can vary from $5 to $100+ dollars. The cash value of the gift card will depend on a variety of factors including your average order value (AOV), customer life time value (CLTV) and your profit margins.
When it comes to setting the value of the gift card offered at membership sign-up, it's crucial to strike a balance between making the offer attractive to potential members and ensuring it's financially sustainable for your business. By carefully considering these factors, you can price your gift card in a way that maximizes its appeal to new members while maintaining the financial health of your membership program.