Ecommerce: Using Electronic Gift Certificates As A Marketing Tool

[mandy]

Electronic gift certificates can be a great way to acquire new customers. When an existing customer buys one for a friend, the friend becomes a free and automatic customer acquisition, unless they were already shopping with you. When a new customer buys a gift certificate for a friend, you acquire two customers at once. Given that the customer acquisition cost is zero for the new customer and that there is normally a real cost associated with acquiring a new customer for your business (very roughly, total monthly marketing expenses divided by total new customers per month), you can afford to build incentives into your offering.

For example, you could launch this promotion: "If you buy a gift certificate, and it is redeemed by a new customer, we will give you another gift certificate for free." ...

full article: http://www.practicalecommerce.com/articl...Customers/