Imagine being rewarded for shopping? This is the cycle promoted by the benefit called cashback, which is nothing more than the company's action of returning part of the amount spent on a purchase to the customer to be used in a new opportunity in the store. This strategy, according to a study by IZIO&Co, which analyzed the purchasing behavior of over 5 million consumers across 24 retail chains, guarantees a 4.8 times higher retention in the six months following the purchase. Furthermore, the average spending of those who use cashback is 85% higher than that of consumers who do not have access to the benefit. In an increasingly competitive market, this technique has proven to be an effective strategy for customer loyalty.
According to Hygor Roque, Director of Brands and Partnerships at Uappi, a company specializing in e-commerce, “Cashback is a powerful strategy because it creates the perfect repurchase cycle. When the customer receives part of the purchase amount back, they start to see the store as a place that values relationships and offers real advantages.”
The importance of cashback in the omnichannel strategy
However, no one wants to have the surprise of accumulating cashback on a virtual purchase and upon arriving to use it in-store, being surprised by the phrase: "this cashback is only valid on the website." And vice versa. That's why the true differentiator happens when cashback is integrated into an omnichannel strategy. "Imagine the customer shopping online, 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 cross-selling and upselling opportunities, sales techniques used to raise the average ticket of customers by offering a more complete, up-to-date, or larger option of a product or service that the consumer was already going to buy.
Cashback Challenges and Customization
Despite the benefits, implementing an effective cashback program requires planning. Omnichannel integration is one of the main challenges, as the consumer expects a seamless experience across different purchasing channels. For this, the company needs to invest in a system that ensures synchronization between online and offline sales systems, with real-time updates.
Personalization is also essential to meet different customer profiles. Cashback programs can be adjusted based on purchasing 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 database and create more relevant and personalized experiences," he adds.
Metrics to evaluate cashback success
Some metrics can help measure the effectiveness of the cashback program:
- Repurchase Rate: Indicates whether the cashback is effectively bringing the customer back.
- Increase in Average Ticket: Measures whether 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: Tracks loyalty over time.
- Lifetime Value (LTV): Analyzes the impact of cashback on generating continuous value for the brand.
"Monitoring these indicators helps to understand if the program is delivering a positive return on investment and what adjustments can be made to further improve the customer experience," completes Hygor.