There is no greater sensation for a customer than earning and spending money simultaneously. And receiving a tiny sum back after each transaction is the very basis of a cashback reward scheme. But in the new world of the consumer, is this kind of programme actually sufficient to keep customers coming back? How does it differ from a rewards scheme? The most crucial question is how to carry out a cashback reward campaign. This tutorial will provide the answers to all of these queries.
A Cashback Reward Program: What Is It?
A straightforward yet compelling concept defines cashback incentive programmes: customers receive a little cash rebate for each transaction they make. Because they offer rapid gratification, cashback incentives are well-liked because they encourage customers to shop. A cashback reward program’s emphasis on immediate enjoyment and monetary incentives, however, comes at the expense of long-term appreciation, which is one of its key drawbacks.
Although the idea of cashback is not new, it has been continually updated as technology has advanced. Among the most recent innovations are:
Based on the customer’s location and past purchases, cashback offers are tailored.
For optimal convenience, the cashback reward programme is available as an app.
Thanks to card-linked technology, cashback points are instantly applied when using a certain card.
Which Business Types Can Profit from a Cashback Reward Program?
Not all businesses gain from giving customers cashback. Luxury fashion companies can run the risk of cheapening the experience for their clients, who normally anticipate particular benefits and privileges. In general, cashback programmes given by banks or credit card firms are successful in the financial sector. As they deal with numerous companies from various industries, malls, airports, and other major retail centres may also use cashback reward programmes more effectively.
Last but not least, these programmes are perfect for wholesale companies who sell their goods to shops but still want to forge closer ties with their clients. Wholesalers can gain vital data that they would have otherwise missed when selling through retailers by persuading clients to buy straight from them instead of the middleman by offering a rebate programme.
Should Loyalty Program Rewards Include Cashback?
Companies frequently wonder if they should include a full-fledged loyalty programme in their cashback incentive programme or if the cashback itself is sufficient to keep customers. A few years ago, one could have made a convincing case for the latter, pointing to earlier research that demonstrated the popularity of financial rewards like coupons and rebates as incentives.
However, since 2019, circumstances have altered. Customers today anticipate personalisation, experiential benefits, and non-transactional involvement more than ever thanks to the recent digital transition. One of a cashback reward program’s main flaws is that it only emphasises transactional benefits, and adding worthwhile components to the system (such badges, challenges, or gamification) costs a lot of time, money, and effort.
Developing Your Cashback Reward Program
To help you better understand how to implement a cashback reward programme, this article was written. Although payback is a thrilling and much-welcomed incentive, it won’t encourage buyers to become brand loyal. In order to establish a loyalty programme that goes beyond cash rewards and fosters meaningful interactions through emotional commitment, it pays to think long term.
Are you prepared to talk about the specifics of a cashback reward programme? Or do you have suggestions for a bigger-scale initiative using a loyalty programme? We’d be pleased to talk about it with our specialists. Schedule a demo to start the dialogue, or submit your RFP here if you have one.
Download our Global Customer Loyalty Report 2022 for a detailed analysis of how features and benefits of loyalty programmes, such as ROI and customization, are seen around the world in the meantime.