Chiara Sheldon
Co-Founder and COO
Reworth
/
Startup Contributor

What Are Cashback Rewards and Why Are They Good for My Business?

By Chiara Sheldon | Thu, 11/25/2021 - 10:52

Businesses are busy working to offer the best products and services. Consumers are looking for the best prices, quality service, the best location, or a differential that adds value for them. But, nowadays, when deciding which product or service they are going to choose, buyers are considering different components, such as new experiences at the stores or rewards programs that many businesses offer.

What Is a Reward Program?

We can define a reward as that additional value proposition of your product or service to the buyer. The purpose is to go from a simple transaction to providing an entire experience at the time of purchase.

A reward program is a strategy that is part of the execution of relational marketing. It delivers unexpected rewards quickly, easily and authentically by generating gratitude for your product, service or brand. That’s why a reward program should contribute to your customer loyalty plan, enabling you to work, diversify and enrich the customer experience in order to engage customers and build a value chain.

There are many such initiatives in which clients earn points by making an acquisition, and afterward they can exchange them for a specific product or services.

As we can see, most of these programs demand that customers do something before being able to claim the reward. They can collect a certain number of points, which takes time and often the points have a limited validity. This means that not all interested customers manage to get the benefit, which causes frustration. Other programs, such as surveys, require personal data, thus stopping a large majority from not responding to surveys. Still others are more fun but require the company to invest in development, as in the case of gamification.

This doesn’t mean the above-mentioned programs are not viable or do not produce results, but in a difficult situation, for example the pandemic, coupled with the sense of immediacy that customers need, we call for effective reward strategies, at the lowest possible price for the company and in which clients can see the benefit reflected as soon as possible. Whoever succeeds in delivering such a project will have a clear competitive advantage.

New Ways of Shopping, New Incentives

As I mentioned before, reward programs should be designed to be centered on the potential of the companies and the needs of the customers. At the moment, there is an immediate and very attractive reward model: cashback. This model embraces the return of a percentage of the total purchase price in cash to the buyer.

Cashback is an innovative and useful mechanism for all players in the chain as brands reward their buyers with money for actual purchases of their products or services. This process changes the discount model to one that returns money. Customers, on the other hand, get a really useful benefit. They can use the money according to their needs. The business benefits from a sales-stimulating dynamic based on effective purchase-reward communication.

How To Promote a Cashback System

Helping companies promote their system is where REWORTH comes into the equation. Through our platform, your business' cashback rewards are listed in the financial institutions' rewards directory, which allows people to view the rewards via the mobile application of the financial institution. Everything is very simple. The business builds its cashback campaign, chooses the settings, sets the percentage of the cashback to be returned to the customer for the purchase and funds the campaign. The financial institution is in charge of listing it in its directory.

In addition to this, the business can advertise through different media, such as social networks and mailing, to create awareness of its rewards program and attract new and repeat customers.

The change in the way we sell and buy came about in an imminent and vertiginous manner, but many rewards programs have not developed simultaneously. They still use cards and are built on bonus points that have an expiration date. In the end, the customer does not understand how or for what products those points can be exchanged. This is why cashback is a great option to really reward your customers for acquiring your products or services. Who doesn't enjoy getting money back?

Photo by:   Chiara Sheldon