The business model of pre-paying before customers actually utilizing the amount started to become popular in 2002, it began traditionally with physical cards and even stamp cards which served the same objective of keeping customers loyalty by visiting the store more frequently.
This however led to consumers having too many physical cards in hand and forgetting what they have in their wallet. Let's get into how does this model benefit merchant in their business.
Benefits of Stored-Value Card
There are many ways to address Stored-value card, therefore It is only proportional that it serves just as many benefits that could help businesses in many different ways.
1. Helps Businesses Get Revenue In-Advance
It works behind the idea of pre-paying merchants for their future services. This digitized version of stored-value cards enables just any businesses: from big to small to benefit from getting up-front revenue whenever their customers purchase the credit in advance.
2. It Increases The Frequency of Customer’s Visits
Being smart with the calculation of stored-value cards would enable customers to make purchases multiple times, this increases the frequency of their visits as they will likely return to your shop to utilize the credits that have already stored in their account. This gives you the opportunity to build up customer relationship and score some loyal customers.
3. It Serves As Gift Cards Too
Many companies have also utilized it as a gift card strategy to expand their customer base. Fun and true fact, customers usually spend more when they’re using gift cards. This has lead to high-volume transactions, especially during gifting seasons and festivities.
The Digitization of Stored-Value Card
Many big companies like Starbucks and Shell have been using this model as a strategy to retain their customers and even sell it as a gift card. However, with physical cards, consumers face the risk of misplacing and forgetting that they have it. So big companies started to digitize it and created mobile apps to cater for this purpose.
For SMEs, creating their own loyalty system and mobile app will definitely be costly and time-consuming. To easily implement this model, they should instead, opt for a platform that is readily available in the market.
Digital Stored-value Card Made Easy for SMEs (eCards)
While some SMEs may still be looking for a solution that can accommodate this model to their business, Fave’s merchants can easily access this feature by adding eCards to their service and let Fave takes care of the rest. While eCards has only been launched recently, its impact is felt by many merchants either in terms of sales, brand visibility and more.
Increased in Sales
Within a short period of time in which eCard was released, it has shown assuring evidence that it is impactful in helping businesses increase their sales.
Since its launch, eCards has helped merchants in Malaysia experience an approximately 17.36% increase in overall transactions while in Singapore, it has more significantly increased by 32.22%.
With eCards service added to their store, one of the leading merchants in Singapore experienced 2 times sales uplift and has generated a total of SGD 64,000 sales with approximately 662 eCards sold in a short period of time since its launch.
As eCards functions by paying merchants in advance for their services, many merchants have been able to generate up-front revenue for their business. This does not only helps them to maintain cash flow but also increases their ability to plan ahead and strategize.
“With eCards, I get them (customers) to spend more and they pay me instantly so that gives me a bit more time for me to market my products to them”
- Jaslyn Chan, Chief Growth Officer at IUIGA.
Increased Brand Visibility
Generally, eCards make for an excellent marketing tool, it is being displayed to thousands of active online customers browsing the eCards section throughout the day. In fact, best selling eCards are also being placed at prominent slots for even more impressions.
This has helped countless merchants in increasing their brand’s visibility. Merchants typically experience 45% sales uplift with eCards and this just goes to show that with minimal efforts eCards have the ability to bring in higher returns.
Converts Walk-Ins to Repeat Customers
Customers seem to love eCards too. We’ve done a survey with our customers about eCards, they typically feel more satisfied with their purchases as they get to save more and at the same time earn bonus Cashback that grants them more value.
In A Nutshell
Merchants experienced more repeat customers through eCards. In the F&B category in Singapore, the average frequency of spending one eCard is approximately 2.7 times while the average frequency of spending one eCard in Malaysia is 2.4 times. This shows that they tend to return to utilize the amount bought and continue to purchase products and services from the same merchant as they have acquired Cashback from that particular merchant.
With that being said, there is no knowing the full potential of eCards yet, as it continues to progress, merchants with eCards are going to continue reaping the benefits of their minimal investments.
The digital nature of the eCard, it allows customers to purchase them anytime online and choose the amount that they prefer without having to go through the hassle of purchasing it at the counter. These benefits encourage people to choose eCards over physical gifts and drive high-volume purchases, especially during gifting seasons and festivities.