B2B Gift Card Industry Trend Report: Q1 2012
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.
Start a Health and Wellness Program in 2012
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:
Top Retail TouchPoints Articles of 2011
Retail TouchPoints (RTP) is an excellent source for retail executives to stay apprised of insightful content around the latest in customer-facing technologies and the development of critical customer loyalty strategies to compete in today’s retail environment. In RTP’s
Top 20 Articles of 2011; they outline top 20 most viewed articles of last year and review the top trends across those most read stories. They noted that the majority of the most viewed articles were case studies with success stories from leading retailers, highlighting that “retail executives are looking to learn from their peers….two of the hot-button topics in 2011 were mobile technology and social commerce.” I hesitate to simply lead you to the list. First, I must note that the top article is
10 Innovative Solutions In The First Annual Next-Gen Retail Awards Report; an important composition of innovative solutions highlighted at the 2011 National Retail Federation (NRF) Annual Convention. The innovations profiled in the report included 10 categories like: social media; in-store marketing; inventory management; store intelligence; mobile technology; customer engagement; POS, and cross-channel. “In a challenging economy retailers are struggling to turn shoppers into brand advocates. With that in mind, customer loyalty was a hot topic in 2011.” Visit the full list of Top 20 Retail TouchPoints articles and you can also access the actual articles, insights, case studies and more to start your own innovative approaches.
Holding Employees Responsible in their own Quest for Wellness
As we enter the new year everyone is trying to maintain a healthier lifestyle, or shed those holiday pounds. Employees returning to work in the new year find their employer's health and wellness program to be beneficial, these programs work because they hold employees accountable for their behavior. Based on a new industry study 78% of employers offering wellness programs are using metrics, such as biometric testing or health risk assessments to make employees aware of their health status. This testing is meant as a tool to reward employees who improve their health, and penalize employees who consistently make bad health choices. Gift cards are a great way to reward employees for healthy choices. Retail outlets such as CVS/Pharmacy, which can help employees along their road to wellness, further encourage the desired behavior. These employee decisions affect the employers health care costs and so to ring in the new year employees are going to be increasingly held accountable for their health and wellness choices.
To read more about trends in employee responsibility in health and wellness programs check out the Columbus Dispatch story.
Preparing for Your Small Business' 2013 Health and Wellness Program
As we head into 2013 and employees commit to the New Year's Resolutions to quit smoking, lose weight, or generally live healthier lives it is the perfect time for your small business to implement a health and wellness program. Here are a few tips on starting the year off right for your business and your employees.
Lead the Way Lead by example. If employees observe you living a healthier life style they will take note, and be more motivated to follow suit. If you live a healthier life, and offer a health and wellness program it gathers integrity for the program because employees see the business owner participating.
Designate a Leader Appoint a leader to charge ahead with implementation of the program. Provide a framework, and a budget to work with, and really let someone in your organization make this program their own. This will also plant roots for the program within the organizational community. A peer leader is bound to give strength to a health and wellness program.
Make it Relevant Know your audience. Use motivators and carrot rewards, like gift cards, that will hold intrinsic value with your employees. Having a variety of rewards for goals achieved, whether it is a goal weight reached or another health goal, is important. Providing gift cards to a variety of healthy living retailers such as
CVS/Pharmacy,
NutriSystem, or
GNC is a great way to support employees on their way to healthier living.
Involve Your Insurance Company Many health insurance plans now offer a wellness program or reduced rate on wellness options such as massage, yoga classes, gym memberships and more. Inquiring with your insurance provider about what might be available to your employees could build in more incentive for employees to participate in a health and wellness program.
For more information on Health and Wellness program ideas for 2013 check out this article from SmallBizTrends.com.
