In the late XX century American companies start offering original discount to their customers. Shops payed up to 5% of purchase cost, that could be used for 6 months on purchases in drug and grocery stores and gas stations. Still, this bonus programme increases customer loyalty to brand and allows to attract new clients even in case of young company.
Cashback in nutshell
To be upfront, cashback of any type is the benefit gained after purchase, and urges client to make repeat purchasing. Nobody is interested in giving money back just to let it remain on client's account and be cashed. Banks-users of cashback cannot obviously stimulate clients to order another paid service, therefore cashback card give right to buy goods with discount from bank's partners (list of these shops is usually published on bank web-site, maximal discount reaches 5%—30%). Cashback card is paid service. Cashback form shop is the giving money back in percentage terms. Client can spend cashback with another purchase and save money. Some shops and even networks use cross-marketing and general bonus system with cashback.
Why open 10 tabs of browser and buy goods from different web-sites? Cashback services popularity depends on such e-platform partners amount. Services are literally for all tastes and wallets. For example, cashback service Letyshops offers to clients good selection of money processing: PayPal, ordinary credit card, Qiwi, mobile phone. More than 1000 shops offer their goods on this web-site including notorious AliExpress. Each shop has one's own cashback level that depends on brand policy. The most popular cashback service is probably Cash4brands. It encompasses 1500 shops for various target audiences, while money can be transferred even via social nets.
How does business benefit from cashback?
Obviously, it demands e-commerce launched. It does not mean that just presence of on-line shop is enough. E-commerce is modern youth lifestyle, as well as lifestyle of people aged 40 and up. Your target audience "abides" in gadgets for already long time. People fall asleep and wake up with tablet in one's hand, smartphone is the necessary equipment for friends meeting, making videos for social nets etc. That is why your brand must be present not only in web-shop but at all places of your clients rest and work. Namely, in social nets, search portals, in Apple Store and Play Market. Some numbers: for the first 6 months of year 2017 the on-line trade sector increased on 22% and reached around 500 billion rubles. You can create your own cashback service but it would have to survive with this stiff competition. According to various sources, there are around 100 cashback platforms in the market nowadays. For example, with 250 partners cashback service Megabonus stimulates customers to purchase on sum around 17 million dollars yearly. How is it possible to attract so many customers? You need to not just rely on partner shops' fame and campaigns, but develop your own service as well: original loyalty programmes for regular buyer, variety of money processing channels, proper technical user support. How to earn money? Cashback services work on Cost Per Action (CPA) principle. Publisher (service with shops and cashback) earns the reward for each active partner client. It can be any action, usually they are the standard options:
- video view
- web-page (few or the target one) visit
Abroad the CPA (Cost Per Acquisition) term considers the fact of purchase only. Partners do not pay for video viewed or document downloaded. In Russia this kind of collaboration is called CPS — Cost Per Sale.
Who can join cashback programme?
- hotels, hostels, and other facilities up to lighthouses which offer place to stay
- car showroom, car service, equipment diagnostics center
- travel agency, insurance agency
- law firm, notary, auditor, consulting agency
- real estate agency, brockerage
- educational institutions etc.
How to benefit from cashback without shop and cashback-platform launch?
You can start career of web-master, still nothing is possible without Internet. If you have any traffic source (web-page, blog, social net account), you can earn on clients redirected to on-line shop. Web-master can have fixed payment per each client action or the purchase percent. But it is not that easy. Cashback services attract much more traffic than web-masters. Only 5% clicks on web-master links are accomplished with purchase; up to 60% — from cashback service.
Which step is the first one: loyalty programme or cashback?
You can skip loyalty programme and offer the cashback on cashback services. Many brands do it like this. But in this case you face the rick to become dependent on publisher — your only partner. For example, cashback service can increase the price of partnership programme while your brand's profit fades. Then you would have to agree on partner's new conditions, as you must keep the cashback service which your clients are so familiar with. Otherwise, you will lose the one tool of customer loyalty growth. The same problem is faced in case of technical failures on aggregate web-platform.
We recommend to duplicate the cashback via your own channels as well as via cashback platform. Best be safeguarded with your own loyalty programme launch service with cashback option. Then you do not depend on partners' twists and are capable to set cashback, promos, discounts and bonuses without intermediaries. We offer VDcards loyalty system that allows attracting new customers and keep the loyal ones. Order the individual commercial offer from our managers and launch cashback for your customers right now. You can create your own cashback service with our loyalty system — branded mobile app for users, with certain list of shops, where client can purchase with discount, cashback, or spend the bonuses. You make the choice yourself: the shops that join your private club, the sets of discounts and promos for each brand. Each shop would offer discount e-cards instead of the plastic ones. And the most important — brands can merge their client bases together and increase the profit. VDcards loyal system will benefit small enterprises as well as large federal networks. It is flexible tool of brand creation.