The Word of The Day is Respect for Two Business Building Tools: Bundling and the Gift Card

Just as Rodney Dangerfield used to say he "didn't get any respect", there are two tools that we all have that we know about, but somehow they just don't get the respect they deserve. First is the Gift Card or Gift Certificate. The numbers in the use of gift cards are just short of amazing. In the last 5 years, the use of gift cards has doubled. Doubled is a very big increase and especially for something that has been around forever.

The first question I would like to address is why. The answer is so obvious that it's scary. It is simply the delivery method of a gift card over a certificate. Many businesses prepared beautifully printed certificates but they don't come close to the effectiveness of the gift card. The reason is it looks and feels just like a credit card but one that you don't get a bill for. It's like FREE merchandise or service and from a marketer's point of view, FREE is still king.

Business after business, regardless of industry, is seeing the gift card as the number one selling item. There has been a shift in our gift giving psyche. We used to say "what would she or he like"? Now it's "what's their favorite store"? That's a major shift in thinking. This change has created a new industry of selling gift certificates. I was at a supermarket the other day and say a display of gift certificates from every major store in the area. Of course there are websites that have been doing that for a while.

So why would I say the gift card gets "no respect"? Because there are some stores that haven't spent the initial money to have a gift card. No excuses here. Worse than that, many stores don't even have a sign or a display telling their customers that they even sell gift cards. Think about it, the best selling item, with the biggest sale increases, but they don't even display or sign it. That's just dumb. Give it the respect it deserves.

The Second Tool: BUNDLING

I got a call the other day from a retailer who was making money but was concerned that she had been accumulating excess merchandise. She defined excess merchandise as merchandise that she had sold well but was left with a couple of pieces. For example, she had sold 22 pieces of one item but she just couldn't move the last two pieces. She could wait for her big annual sale but she explained that method was becoming less and less effective.

My recommendations to her were as follows:

1. Create a permanent markdown section. Name it, keep it fresh with new markdowns, and above all, don't use percentages. Price everything.
2. Sign the merchandise. Make the signs fun, like "OOPS WE GOOFED" or "BUY ME... I'M TIRED OF BEING HERE". Or just a sign that will explain either the great value or why they should buy it.
3. Bundle- Bundle- Bundle-- Put 2 or 3 items together to create a package. Just get similar price points together. No one minds discounting if someone is buying multiple items.

I was traveling through the Philadelphia Airport recently when I spilled some coffee on my shirt and didn't have anything to change into. Luckily I had time to walk some of the shops there hoping there might be one that sells shirts. Sure enough, there was a Brooks Brothers. I had never shopped in Brooks Brothers--maybe I just thought they were too expensive or conservative but I needed a shirt. I was shocked to see all of their price bundles. Three shirts for $139 or $149. It wasn't cheap but what the "3 for" did was make the store less intimidating. Then, once I put one of their shirts on my body and experienced the comfort and fit, I wanted a second one. Well, once I got a second one, it would have been silly not to buy the next one.

Bundling is such a powerful tool! So why don't we all do it? Why doesn't bundling get the respect it deserves? Bundling works in almost every industry. (Actually I am trying to think of an industry where it wouldn't work, but I can't!) Plan and sign your "2 or 3 fors".

Have a great week. It's tough out there but always remember that there is someone doing business. Make that business YOU!