Over the holidays, I had time to look at my email inbox a little deeper than the “priority” section and came across a fascinating article from The HUSTLE about the economics of gift cards.
Gift cards are today’s solve-all option of gift-giving: versatile, convenient, and usually somewhat appeasing to the recipient. A gift card typically isn’t going to get you the title of best gift-giver and might be met with a “Meh…” (especially if it’s to your wife who you share a bank account with…), but it gets the job done. We’ve all been in a time pinch or had absolutely NO CLUE what to buy for someone and reached for the ol’ standby - loading up a card for a nice restaurant or box store. In reality, it’s just a teensy bit more personalized than handing someone a card with cash in it (which they’d likely prefer), but for some reason gift cards have become a holiday norm to the tune of more than $1 TRILLION worth sold at retail in the last decade. In fact, gift cards have become so popular that the National Retail Federation said they made up 55% of the average shopper’s total gift purchases.
But here’s the shocking part: less than 70% of gift cards are ever cashed in and redeemed for the full amount, translating to an estimated $43 BILLION going to waste over the last 10 years. So, you had the nice thought to give someone a gift card, but who really wins in this scenario? Well, it’s a win-win for the businesses… win if you use the card because you’re locked into business with them, but a much BIGGER win if you don’t, because it’s translated to straight profit.
All of this isn’t a guilt trip about your last-minute Starbucks card purchase. Instead, as I was reading this article my mind went to this being a wake-up call about our priorities in business – and this lesson applies directly to our industry too. As contractors, we don’t usually roll out gift cards for services, even though it might not be a bad idea to get a piece of that pie. But the more important, overarching question for us is, are we simply looking to cash in on our customers and shake the money out of their pockets? Bamboozle our homeowners and hope we LOOK like we’re trying to help while secretly hoping we never have to lift a finger? Would we be satisfied if we knew they’d purchased $1,000 of store credit yet never called to use it? It’s a win for our accounting books but not for our relationship with our customers who obviously haven’t thought about us in a while…
We expect to see advertisements continue from businesses, but would you be shocked by a business constantly reminding an old customer to use something they’ve already paid for so they get their full money’s worth? That’s much rarer. What businesses with the, “I’ve got your money, so I hope you do forget about me,” mentality don’t realize is that staying silent and being forgotten about is much more costly long term. Just because they didn’t redeem that gift card to the Cheesecake Factory does not mean they didn’t eat somewhere else for a whole year. It just means they never once thought about the Cheesecake Factory.
Think about your maintenance contracts. Yes, it would make you a ton of money if you signed a bunch of people up and they all immediately got amnesia, forgot about the subscription and never called for their agreed upon services. Money in with no hard costs means straight profit. But are we okay with that or are we genuinely striving to help our homeowners? It’s a rarer question in business than you might think. There’s a difference between simply trying to make money and truly wanting to be a service provider, and the difference is called: integrity.
Bringing the Thoughtfulness Back
Your work as contractors touches the heart of people’s lives—their homes. When someone hires you, they’re not just paying for a repair or upgrade; they’re entrusting you with their comfort, safety, and to protect the largest investment most of them will ever make. So, how do we build their trust in us? We must show in every way possible that we take joy in what we do that it’s not just their money we’re after, and that we truly have their best interest at heart.
Ask yourself a hard question: When you suggest an upgrade or attempt to add an additional service for a homeowner, do they trust that you’re honestly suggesting that move with THEIR best interest in mind? Or do they get skeptical and think you’re just trying to inflate their tab? The way that conversation goes is almost 100% decided by the relationship you’ve built with that homeowner and how much you’ve invested in them to build trust. People are expecting to be preyed on by the marketplace and sold a bill of goods that underdelivers. It’s on you to prove that you don’t operate that way.
In the end, our work should be about more than just making money. It should be about helping people live better, safer, and happier lives. This means showing up with the same thoughtfulness and care that you’d want if someone were working on your own home, but also showing you’re after their business long-term. The first call is the beginning of a relationship with you being their contractor from then on.
Yes, the idea of a gift card is appealing because it’s easy. But the reality is, buying meaningful gifts – and building meaningful relationships – takes more thought and effort on our part. And it’s the extra thought and effort that show others how much we care. By committing to quality, transparency, and emotional connection, you’ll not only build a more successful business, but one that will help you sleep better at night as well.
For more tips on how to build a stronger, more trusting relationship with your homeowners, Hudson Ink is here to help. Call 800-489-9099 or shoot me an email to [email protected] to line up a one-on-one marketing consultation with me or one of our trained marketing coaches. Let’s start 2025 strong!