5 Reasons Why Now Is the Time to Invest in a Cashback Strategy

Consumers nowadays are smarter, more informed, and savvier than ever before. They have more choices for shopping and a wide range of tactics to save money through discounts, coupons, and cashback. The savviest consumers find the best deals, join various rewards programs, and buy products during sales to get them at a highly competitive price.

Creating a sound cashback strategy is one of the most effective ways to attract new customers and retain existing ones. Let’s face it: for consumers, there is no better feeling than spending and saving money at the same time.

If you want to get an edge over your competitors, you must start offering lucrative cashback rewards to your customers. And if you are not sure where to start, this blog is for you. We will not only explore the benefits of cashback but also help you set up your first Bitcoin cashback campaign.

1. Cashback is more effective than discounts

Shoppers have started prioritizing discounts more than ever. According to a report from 2visions, 62% of buyers hold their clothing purchases until they get them at a discount. The same report suggests that consumers are twice as likely to purchase a product at a 20% discount over its average cost. The numbers drastically increase to 99% if the discount offered is 50% instead of 20%.

While discounts are a great way to attract new customers and increase conversions, they can turn out to be expensive for merchants. Cashback, on the other hand, can be cost-effective and highly impactful. Over 36% of brands have seen an increase in revenues via rewards, while only 28% saw a boost with discounts. Regular sales and discounts may adversely affect your perceived brand value and lower profit margins. Eventually, your customers will start expecting lower prices, which will prevent them from buying at full price.

2. Cashback is consumers’ favorite money-saving tactic

The COVID-19 pandemic and rising inflation have changed consumers’ shopping habits. A survey conducted by Wildfire, a rewards and cashback platform, revealed that 74% of consumers are more interested than ever in earning cashback rewards for shopping due to inflation & the uncertain economy.

The rising prices have made consumers more conscious about their purchasing habits. They are carefully evaluating their choices and spending their money frugally. Amid this inflation and recession, offering cashback is a great way to get an edge over your competitors and increase your sales. Offering lucrative cashback is a great way to incentivize consumers who are considering switching brands. This way, you will not only gain new customers but also maximize customer loyalty and brand awareness.

3. Attract new and younger audiences

Gen Zers (people born between 1990 and 2000) have amassed over $360 billion in disposable income. According to a report from McKinsey, over 61% of Gen Z intend to splurge in 2023. In fact, it is the only generation that’s spending more than they were the previous year in any given month.

Offering cashback is one of the best and most effective means of attracting this young audience. By leveraging customer information, you can create highly personalized cashback offers and lucrative rewards programs that will maximize conversions and help you retain Gen Z customers.

4. Power up your customer insights

Cashback rewards can not only help you boost sales but also bring you valuable customer insights. You already have their basic information, such as order details, email address, etc. By adding a few additional questions during the cashback redemption process, you can gain a lot of insights that will help you reshape your customer’s shopping experience.

Conducting surveys is not easy. However, customers are likely to participate if the surveys are incentivized with cashback rewards. With the data, you can fine-tune your marketing campaigns and identify crucial trends that can enhance your value proposition — all while selling more.

5. Boost brand visibility with bigger, bolder offers

Unlike instant discounts and coupons, which have a 100% redemption at checkout, cashback rewards have a lower redemption rate of 30-40%. This allows brands to offer lucrative rewards and get more creative with their incentives. Businesses can create bigger and bolder offers that will attract more users and maximize conversions.

When it comes to cashback rewards, customers tend to forget to claim them or miss the deadline. Either way, you not only gained a new customer but also made a sale through the promotional campaign.

While building ambitious cashback campaigns is a great way to attract new users, you should ensure you have enough budget insuring your promotion.