Imagine being rewarded for shopping? That’s the cycle promoted by the benefit called cashback, which is the action of the company returning to the customer part of the amount spent on the purchase to be used on a new opportunity in the store. According to a survey by IZIO&Co, analyzing the buying behavior of over 5 million consumers from 24 retail networks, this strategy ensures a 4.8 times higher retention in the six months following the purchase. Additionally, the average spending of those who use cashback is 85% higher than consumers who do not have access to the benefit. In an increasingly competitive market, this technique has proven to be an effective strategy for loyalty.
According to Hygor Roque, Director of Brands and Partnerships at Uappi, an e-commerce expert company, “Cashback is a powerful strategy because it creates the perfect repurchase cycle. When the customer receives part of the purchase value back, they start to see the store as a place that values the relationship and offers real advantages”.
The importance of cashback in the omnichannel strategy
However, no one wants to be surprised by accumulating cashback on a virtual purchase, only to arrive and be told in the store that “this cashback is only valid on the website”. And vice versa. That’s why the real differentiator happens when cashback is integrated into an omnichannel strategy. “Imagine the customer buying on e-commerce, using cashback in a physical store, and then being encouraged to return to the online environment with a new offer? This fluidity creates a continuous consumption ecosystem, keeping the customer engaged and loyal to the brand across all channels”, explains Roque.
Cashback goes beyond simple money return; it creates an emotional incentive that strengthens the consumer’s bond with the brand. When well implemented, cashback increases opportunities for cross-selling and upselling techniques used to increase the average customer spend by offering a more complete, current, or higher option of a product or service the consumer was already planning to buy.
Challenges and Cashback Customization
Despite the benefits, implementing an effective cashback program requires planning. Omnichannel integration is one of the main challenges, as consumers expect a seamless experience between different purchasing channels. To achieve this, the company needs to invest in a system that ensures synchronization between online and offline sales systems, with real-time updates.
Customization is also essential to meet different customer profiles. Cashback programs can be adjusted based on buying behavior, offering greater benefits in favorite categories or creating incentives on special dates, such as birthdays. “CRM tools and data analysis are essential here, as they help segment the base and create more relevant and personalized experiences,” adds.
Metric for Evaluating Cashback Success
Several metrics can help measure the effectiveness of the cashback program:
- Repurchase Rate: Indicates if cashback is effectively bringing the customer back.
- Increased Average Order Value: Measures if the customer is spending more to enjoy the benefit.
- Omnichannel Engagement: Evaluates how many customers are using cashback on more than one channel.
- Retention Rate: Monitors loyalty over time.
- Lifetime Value (LTV): Analyzes the impact of cashback on generating continuous value for the brand.
“Monitoring these indicators helps understand if the program is delivering a positive return on investment and what adjustments can be made to further improve the customer experience,” Hygor adds.
