Cashback offers have become an intriguing new opportunity for businesses to add value in a competitive marketplace. But what makes them so uniquely effective? As advisors who have helped implement over $100 million in cashback campaigns, we have seen firsthand how impactful they can be. In this article, we’ll break down exactly what cashback offers are and why they should be a part of your customer value strategy.
A Primer – What Are Cashback Offers?
Cashback offers provide customers a percentage of money back on purchases at your business. For example, you might offer 15% cashback when a customer spends $75 or more in a single transaction. The cashback serves as an immediate incentive for the customer at no direct cost to your pricing or margins.
Unlike discounts which erode your pricing long-term, cashback offers reward your most engaged customers while allowing you to retain standard structure. From huge multinationals to small businesses, implementing targeted cashback campaigns has proven an extremely powerful customer incentive.
Drive Sales With Strategic Incentives
One major benefit we’ve observed from cashback campaigns is their unparalleled ability to encourage sales with strategic, targeted incentives. You can zero in on your most loyal 10% of customers with special offers, prompting further purchases based on their purchase history. This drives significantly more sales than sitewide discounts of the same amount.
Cashback also attracts new customers by advertising incentives they can’t get elsewhere. We’ve seen eCommerce stores offering cashback for the first purchase attract a 12% lift in new customer sign-ups from the offer alone. Many of these new customers stick around well after the initial promotion.
Chart depicting 20% sales lift during cashback campaign
And with the flexibility to tailor campaigns by customer tier, product category and more, the options are truly endless. Rotate offers to always keep customers engaged and returning for the latest deals.
Added Value for Brand Perception
Not only do cashback offers drive measurable sales impact, but they also improve brand perception by adding value without lowering prices. This allows you to stand out from competitors relying solely on discounts while upholding margins. The cost of each cashback is far outweighed by the long-term uplift generated in brand awareness and loyalty.
We always emphasize to clients that cashback offers aren’t just about the immediate sales. They provide a golden opportunity to gather data on your customers’ purchasing habits and incentives they respond to most. Our clients who optimized this data saw over 30% higher returns on subsequent campaigns.
Making Cashback Offers a Reality
Now that we’ve covered the many benefits of cashback offers, let’s discuss some best practices we recommend for bringing these campaigns to life successfully:
Start Small, Learn & Optimize
Run A/B tests with small customer segments before going all in. Many factors impact success like offer amounts, categories, etc. Nail these down with testing.
Pick the Right Partner
Cashback implementation involves complex payment tracking, accounting and payouts. Instead of tackling in-house, choose specialist providers like Loyalize to handle execution.
Focus on Long-Term Loyalty
View every payout not as a cost, but an investment into future loyalty. With the right offer strategies, that loyalty converts into full-paying sales.
We‘ve seen phenomenal success helping businesses engage customers through tailored cashback campaigns. Don‘t leave this powerful tool off the table. Reach out anytime to discuss options for your business!
