A few weeks ago, a friend of mine shared a story with me that opened my eyes up to an opportunity that I thought I would share with you in this newsletter. On the surface this story has nothing to do with real estate or selling homes. However, by the end of the newsletter, you’ll see how to use this idea in your business and I promise you’ll love it.
Apparently my friend had a $10 gift card to his favorite restaurant on the front seat of his car. Somehow this gift card slid down between the seats as he drove along. He proceeded to try and retrieve the gift card and in the process, he came very close to sideswiping a parked car. To be perfectly honest, this friend isn’t a very good driver to begin with, which is probably why the gift card slid off the seat in the first place.
After nearly missing the parked car, he decided to wait until he got home to fish the gift card from between the seats. As the story goes, he ended spending 35 minutes at home digging out this gift card. From what it sounded like, he needed every tool in his toolbox and two neighbors to get it.
I have thought a great deal about this story, because I realized the power gift cards have over us. My buddy risked wrecking his car to find a $10 gift card. When this didn’t work, he spent 35-minutes searching for this same gift card.
The gift card is simply a piece of plastic that probably cost around .35 cents. Gift cards are NOT money. However, they have the perception of being money. To illustrate the difference between perception and reality, consider these two questions…
1. Would you risk wrecking your car over .35 cents?
2. Would you spend 35-minutes of your time trying to find .35 cents?
My guess is you would answer “NO” to both questions. The reason why is because you see the gift card for what it really is – a piece of plastic. However, because the gift card has $10 printed on it, we perceive it to be worth $10.
PLASTIC GIFT CARD = MONEY
In my family, we sometimes use gift cards as presents, hence the word “gift.” We’ll buy a $50 gift card to Outback Steakhouse for my dad’s birthday. Or we’ll buy a $25 gift card to iTunes for one of my nephews at Christmas. We typically buy these gift cards at our local grocery store.
When we purchase the gift card, we typically pay the face value of the gift card. Once the gift card is activated at the register, it becomes a form of money. It has real value and is a form of currency.
Why couldn’t we have gift cards created for our real estate businesses? Once created, we could turn these gift cards into money in many different ways. You could create a gift card offering $500 off of your real estate services. Once you had your plastic gift cards in hand, you could…
1. Sell gift cards at a discount to create massive cashflow
Everyone loves a discount! You could sell these gift cards for $100, an 80% discount. If you sold 100 gift cards for $100, you would pocket $10,000. Remember these 100 gift cards only cost around $35 to print, leaving you with positive cashflow of $9,965. Obviously, you would have to honor the gift cards if they were presented to you. You would simply reduce your commission by $500 at the time of sale to credit your client for the value of the gift card. The cool part is that anytime you honor a gift card, you receive a commission check!
2. Use gift cards to help a charity & get new clients
You could offer to give your gift cards to local charities or schools to use as a fundraising tool. As an example, you could approach the Parent-Teacher Association of your local elementary, middle and high schools and offer to give them 25 gift cards each valued at $500 for free. They could sell these gift cards to the parents at whatever price they wanted and could keep every penny for the school. If they sold these 25 gift cards for $100 each, they would raise $2,500 for the school.
You’ll obviously have to honor these gift cards if presented to you, but you’ll be attracting new clients in the process. To redeem the $500 gift card, the family would have to use you as their agent. On a high level, the Parent-Teacher Association would be promoting your services to every parent at the school and you would be helping raise money for the school!
3. Use gift cards to recapture past clients & generate more referrals
When the next holiday rolls around, mail a holiday card to everyone in your database. As a special gift, include one of your $500 gift cards. Put a note in your card letting them know they can use this gift card themselves, or they could pass this card on to anyone else that might be thinking of making a move.
Remember how powerful the perception of value is from the story I shared at the beginning of this newsletter. This is a pretty cool strategy that will yield a ton of good will with your database. More importantly, you would definitely set yourself up for some great referrals in the process.
Or you could use your gift cards to get referrals from local businesses…
Imagine what might happen if you went to local businesses in your area and offered to give them free gift cards that they could give away to their best customers. As an example, let’s assume you gave a local coffee shop 25 of your gift cards valued at $500 and told them to pass these cards out to their best customers.
The owner of the coffee shop would now have a valuable $500 gift that they could give away to their best customers. This valuable gift wouldn’t cost them a penny. The people receiving these gift cards would have to hire you to receive the $500 gift card value and you would walk away with many new clients!
You could obviously repeat this process with many other businesses turning each one into a massive referral machine.
Use gift cards as a “daily deal” to generate cashflow and new clients at the same time
I’m sure you’ve heard of the daily deals websites like Groupon and Living Social. Maybe you could approach one of these sites and turn your gift card into a daily deal. As an example, you could offer a $500 gift card for just $50 as a 24-hour daily deal.
In Cleveland, Living Social has an email list of 200,000 people. An agent could approach Living Social and have their gift card promoted at a significant discount. Living Social would email the deal to their database and would keep 50% of the income from the sale of the gift cards.
If 100 gift cards were sold at $50 each, you would pocket $2,500 (50% split with Living Social) and you would set yourself up for 50 new clients at some point in the future.
If 500 gift cards were sold for $50 each, you would pocket $12,500 (50% split with Living Social) and set yourself up for hundreds of future home sales.
Living Social does not charge upfront to advertise on their site. They simply split any income generated with you 50/50. This simply means you have ZERO downside from applying this strategy. In fact, you can actually get paid to advertise your business.
Pretty cool, if you ask me!
Hopefully you’re starting to see the power of gift cards and how you might use them to advantage in your business. They really do give you the ability to create money out of thin air.
Here are two websites I found where you could create and order your own gift cards. It seems as if they offer better pricing on higher quantities:
Note these are NOT affiliate links! I am simply sharing them with you to help you save time!
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P.P.S. If you decide to use my gift card ideas in your business, you will probably have to add a disclosure in your purchase agreement detailing the gift card and the commission saved by the client. The gift card would probably be considered an inducement and would have to be disclosed! Please discuss this idea with your broker and/or real estate attorney before implementing!