With technological advancement, the methods of shopping have changed drastically. Currently, most individuals prefer online shopping to buy products from groceries to a laptop as the Covid-19 pandemic has created restrictions in traveling. As the e-commerce business is booming like never before, a lot of competition is taking place between companies to stay in the market and generate revenue. To keep the customer base intact, many e-commerce firms use various techniques to boost business and gain customer loyalty. Cashback offers are one such method that will allow customers to enjoy some rewards for their purchases through the Shopping cashback app. Are cashback offers good for business, or does it dent the profit margin? Let’s discuss
What is a Cashback Offer?
A cashback is an offer given to a customer who purchased a product through a Shopping cashback app. The award is usually a percentage of the amount spent by the customer in making a purchase. The amount of cashback offered varies based on the product and the company that offers it. Some companies provide small cashback on every purchase, and some offer cashback on some selected products scan QR code. The cashback is like a thank you gift given by the businesses for purchasing their product and increasing their brand value. Some of the common types of cashbacks include,
- Flat rate cashback: It is cashback offered regardless of spend type
- Tiered rate cashback: It is offered on annual spending using a particular Shopping cashback app
- Different rate cashback: It is provided on different purchases like fuel, groceries, etc.
Benefits of Cashback Offers for Businesses
Some of the top benefits that businesses can get out of cashback offers are listed below.
1. Bring Regular Purchases and Loyalty Among Customers
Generally, human beings offer something in return when they receive something like a product or service. It has always been the foundation of marketing. Whenever a customer gets a cashback reward after making a purchase from the Shopping cashback app, it creates a thankful feeling of the company towards the customer. It will lay the foundation for a long-term relationship where the customer becomes loyal and prefers to buy products and services only from the company they have acquainted with. The cashback will create a possibility where the customer will browse through the products and services and buy different products from the same company, which will increase the brand value. Also, customers receiving cashback will share their experience with their friends and family, which creates a gateway for getting more customers onboard without rigorous marketing.
2. Will Cost Lesser than Other Types of Rewards
Sometimes businesses offer rewards like free coffee, movie tickets, free dinner coupons for regular purchases to gain customers’ loyalty. However, offering rewards of such kind can increase the expenses, which will affect the company adversely in the yearly revenue. Hence, cashback offers are a better alternative as they will give something in return for the customer, and they can use the same cashback to purchase new products from the same company.
3. There is No Need for Giving Discounts on Products
Offering discounts on products has always been a part of the business for centuries. It is offered to attract new customers and make existing customers return for more purchases. However, the competition is so fierce that some companies end up making no money on discounted products. On the other hand, the cashback works like a discount but will not adversely affect the profit. The business will get the product’s market price, and the firms can maintain the cashback on a monthly and annual basis. Therefore, it will help the companies to maintain sufficient cash flow.
Cashbacks have always been a boon business to maintain and add new customers without affecting the revenue. The above benefits clearly prove that cashback rewards received from purchasing products through the Shopping cashback app will bring customer loyalty and also enhance the brand value of the company.