How vouchers build brands

With so much media attention focused on the internet and all things digital, it is easy to forget that vouchers are one of the fastest growing areas in marketing.

The voucher industry’s representative body, the VA, has reported double-digit growth in the industry almost every year for the past five years. And with more coupons issued for wine than for any other product, the marketing tool’s gentrification and growing popularity has encouraged other businesses, including upmarket retailers such as John Lewis, to enter the market.

The company’s recent tie-up with PruHealth, where customers who took out a policy were rewarded with John Lewis vouchers, was a first of its kind for the retailer.

John Bohan, account manager for John Lewis’ corporate gift vouchers, explains that the company used vouchers to lever the brand. “In terms of the customer profile there was a very good match and vouchers were an ideal way to reach our target audience. They encouraged more customers into the stores and acted as a strong visual reminder for the brand,” he says.

John Sylvester, managing director of specialist agency The Voucher Shop, agrees that vouchers can help to build brand perception by association. He says: “Vouchers are a means of giving away a recognised value. The customer will accept the face value and not look for a catch. Therefore, a brand can benefit by association with, for example, a bluechip retailer through that company’s vouchers,” says Sylvester.

The most popular vouchers, however, remain those linked to high street brands. Clare Rutherford, business incentives manager with the House of Fraser, says consumers want choice, and the flexibility offered by vouchers is a key to their popularity.

But when it comes to choosing a voucher partner it is equally important to ensure that brands share similar values. Rutherford says: “It is important to choose a voucher that reflects your company’s brand values, which doesn’t undermine them and which complements the brand image as this will help reinforce any brand strategy. It’s vital to get the ‘fit’ right – upmarket or luxury brands need to link with vouchers of a similar standing, as being given an aspirational voucher will help ensure the recipient feels positive about a brand or product,” she adds.

Social issues
But there are technological as well as social and commercial issues that have helped to boost the popularity of vouchers. The Voucher Shop’s Sylvester points out that vouchers and coupons are now available in a wider variety of formats than ever before and this in turn is encouraging a greater number of retailers to sell them.

He says, “Plastic gift cards have certainly played a key role in building the market.”

However, Yvonne West, manager at Sainsbury’s business direct, warns there are dangers in focusing too much on the technology rather than the customer experience. She believes paper vouchers can still play a valuable role in branding. “Consumers like paper because it feels like cash. They tend to carry paper vouchers with them, so it is always there, in their wallets – a constant visible reminder of ©the brand,” she says. But Katherine Roseveare, agency director at Intelligent Marketing, argues that the “ease of use” associated with paper vouchers comes simply from habit. She says, “The use of vouchers is becoming increasingly sophisticated, with brands getting quite clever about using integrated media.

“Costa Coffee already provides customers who sign up for its prepay loyalty card online a £2 preloaded credit. Additional top-ups can be used to increase attendance during lower traffic periods.”

Even the traditional, paper-based channels are seeing new applications. Roseveare adds: “Viral e-mails offering two-for-one deals and other voucher-based offers abound from every type of retailer. The simplicity and cost-effectiveness of getting customers to print their own vouchers, and the impact of strong offers, will make this an ever-increasing medium for vouchers.”

Customer retention
Mark Grice, managing director at Catalina Marketing, agrees that vouchers need to encourage customer retention and shopper frequency. He says: “Targeted coupon programmes are the next evolution in loyalty marketing as they offer brands and retailers the ability to reach their customers with differentiated offers and messages.”

However, vouchers have been traditionally seen as gifts or rewards. Whether the general public is ready to see them repositioned as brand-building tools will become apparent in the next few years.