Why cashback offers are good for business?
With companies keen to keep consumers loyal, we will explain in detail the reasons why cashback offers are good for businesses. Cashback is popular in Australia with a lot of our participating merchants making great cashback offers, which you can find on our PokitPal app.
Popular brands like The Iconic, booking.com, ASOS, First Choice Liquor, and Agoda are offering cashback rewards to consumers to increase user engagement. It’s a good way for these businesses to attract more consumers.
What is a cashback offer?
We will explain cashback in general first. Cashback is a reward provided to a consumer for purchasing at a specific business.
A cashback reward is a percentage of the amount spent on each purchase. The amount of cashback offered by each brand varies at different offers and promo periods.
For example, by using PokitPal consumers can receive cashback incentives on each purchase. PokitPal promotes these offers across a number of marketing channels, increasing brand awareness and enticing consumers to purchase products again from the same brand that offered the cashback. Merchants can set specific times and days to offer extra cashback e.g. during a holiday period a brand may offer a higher percentage to receive more new consumers during those periods.
Each business has the flexibility to choose the cashback percentages offered to the consumers, and our cashback platform does the hard work, of promoting the offers and managing the rewards earned by the consumers.
What are the benefits of cashback offers to businesses?
Here are some of the benefits of offering cashback as an incentive to businesses.
1. Increase regular purchases and customer loyalty
The theory of reciprocity states that people will want to offer something back when they receive something. This is a good foundation for marketing.
Cashback is a way of rewarding consumers for being loyal and purchasing all over again. Whether they’re receiving cashback on each purchase or extra cashback when they visit their local brands at certain times,
When consumers know they’ll be rewarded for purchasing your brand, it attracts them to spend more on your brand. If consumers are searching to spend on big purchases, having a cashback offer as an incentive could help your business get new customers and increase your consumer acquisition.
2. Cashback is cheaper than offering rewards
There are several ways to offer rewards. Existing consumers are 31% more likely to spend more with brands that offer rewards so it’s necessary you make them feel valued.
With traditional customer loyalty programs, businesses are often giving out some free products or rewards in return for your consumers spending a specific amount. The reward to the consumers could be a free meal, free coffee, etc.
Offering rewards like giving free products can often result in businesses spending more than a cashback reward might.
3. Businesses don’t need to lower the price of their products
Most brands often discount products in order to get new consumers and make them purchase again. The market nowadays is very competitive. Brands often discount their products to the point where they’re not gaining profit anymore.
With cashback offers, merchants don’t need to discount their products at all. A cashback offer is a great incentive to the consumer. Instead of offering 50% off of your products, offer 10% cashback to the consumer instead.
Consumers will be more attracted by cashback because they are ‘receiving’ their money back, rather than just spending a little less.
When businesses offer cashback instead of a discount, businesses will receive the full amount in the bank in an instant upon purchase. Then on a monthly basis or specific time periods, the business sends the cashback to the consumers.
This can greatly improve a business’ cash flow because it allows the business to pay out the cashback once when all of the revenue is received, rather than just receiving less revenue through discounts.
How do businesses start offering cashback?
If you’d like more information about our cashback rewards platform, please feel free to contact PokitPal today. Email us now at email@example.com and we will explain all the benefits of cashback offers to your business.