Looking a Gift Certificate in the Mouth

by Coach Cary Bayer

When I was growing up, I often heard an expression from my family that goes: "Don't look a gift horse in the mouth." Today, I'm going to look a gift certificate in the mouth. The reason is that, contrary to the belief of most of the 300-plus alternative healers whom I've coached, I'm not a big fan of gift certificates. I know this is a controversial topic, because when I'm asked about them at my CE seminars at state conferences, my answer often ruffles so many feathers and rattles so many cages that one might conclude that healer is a bird.

As a marketing coach for alternative healers, I'm writing this now because of a recent email I received from a prominent healing arts marketer, whose identity I'll protect, which promises therapists $600 per hour. For a therapist who works hard for a tenth of that hefty fee, the idea of making $600 per hour is awfully appealing to say the least. The gist of the marketer's argument is clear enough: The gift certificates that most people receive are purchased for them by your clients. The good news, he says, is that often they don't bother to redeem them. The example he gave for the "$600 per hour" that he touted in his marketing communications was a redemption rate of only 10 percent. This means that if you sell 10 certificates for $60 apiece, which grosses you $600, and only one person redeems the gift, you'll have done one session and ended up with a whopping $600. On the surface that looks terrific. But often in life and in business, it's important to look deeper. Let's use that same model of his--you sell 10 different $60 gift certificates, with only 10 percent redeemed. To this, I'd like to add one more factor: Let's say that these 10 certificates were purchased by 10 different clients. So there you are, thrilled to your core for making $600 for one session. But here's the question that I'd like you to ponder: How thrilled are the nine clients of yours who spent $60 of their hard-earned cash on a gift that wasn't ever used?

The reason I ask you this question is because I heard last year of an alternative healer in New York State who wound up losing one of her best clients because he was annoyed that his gifts weren't used. It certainly wasn't the fault of the therapist that his gifts weren't taken advantage of. But in this client's case, he had purchased not one, but many gift certificates--I think it was six--and none of them were redeemed. He was annoyed at his friends, he was annoyed at himself, and he was annoyed at his therapist. Guess what he did? He stopped seeing that therapist. She wound up with about $360 in "free" income because she didn't have to do a single session, but she also ended up losing a client who had been seeing her every week. Do the math on that: $60 per week for 50 weeks a year is $3,000 a year. If that steady client was planning to see her for, say, five more years, that's a loss in income of some $15,000. So the net of this scenario is: $360 gained in "free: income, $15,000 lost from a lost client. You might argue that if he stopped seeing his therapist because his gifts weren't redeemed then he probably would've stopped seeing her anyway. Really? Is that why he spent $360 on gifts for others to use the services of a therapist he was going to stop seeing? I don't think so. Or you could argue that his firing the therapist was a completely irrational action to take--cutting off his nose to spite his face or, to be more precise, keeping the stress in his body to spite his face. But guess what? People sometimes do irrational things. If you're going to sell gift certificates, let the buyer know that if the gift that he buys isn't redeemed by the person whom he buys it for, you'll honor it for him instead. I know that in many states you're not allowed to put an expiration date on such a gift, but between the buyer and yourself there's nothing wrong with telling him that if, in six months it's not redeemed, he can use it for himself. That way, nobody loses.

You might also argue that this occurrence in New York was an isolated example. And yes, you're right, it is. But what if that isolated example were yours? I didn't write about gift certificates to scare you, but to get you thinking bigger than trying to get something for nothing. You're too generous to think that way. Passive income is great--and indeed the subject of a future writing from this marketing coach for healers--but there are much better ways of making passive income than ticking off your clients, the lifeblood of your business.

Since low redemption rates are often quite common--at least that's what the majority of therapists have told me in the many continuing education classes I've taught at their annual state conferences--why would you pursue them in the first place? Remember, the recipient of a gift certificate--even if he uses it--hasn't paid a penny for the session. So ask yourself another question: Of the low percentage of people who redeem their gift certificates, what percentage come back and become regular paying clients? The answer I've been able to compile from the therapists I've queried is infinitesimal--barely worth counting.

Why would you pursue a marketing strategy like gift certificates that yield such a microscopically low percentage of ongoing clients? You're a healer who's in business for the long haul, not for some one-shot gifts come Christmas time. Put your marketing efforts into generating long-time clients who are thrilled with your work, not these one-shot efforts that might line your pocket in the short run, but create little ongoing business in the long. Why risk annoying your long-time clients and losing them in the process?

For more information visit www.CaryBayer.com.