Have you heard of “cashback shopping”? If you have heard of Rakuten (formerly Ebates), then you have experienced the leading example of business to consumer (B2C) cashback shopping. In B2C cash back shopping, the cashback is paid directly to the shopper as an incentive to buy. Why? It is much less expensive to sell an item on-line than in a brick and mortar store. Online retailers take a portion of these savings and invest them in cashback advertising to bring more shoppers into their on-line stores and encourage on-line vs. in-store purchases.
This same cashback shopping concept can be also be applied in a business to business (B2B) environment. The biggest drawback of B2C cashback is that shoppers are reluctant to provide their personal contact information to someone they do not know, in this case, Rakuten. In the B2B environment, shoppers already have a relationship with the sponsoring organization. The sponsor might be their bank, church, favorite restaurant, or any number of other organizations. The key is for the sponsoring organization to have a trusted relationship with the shopper. In many cases, the sponsor may already have significant personal information on the shopper and be sending the shopper regular communications.
Most organizations with ten thousand plus (10,000+) patrons can benefit through adopting cashback shopping as a component of their on-going promotion program. The more potential shoppers, the greater the benefit. The cashback that flows to the organization can be utilized as a donation (for churches and charities), to pay for future purchases (retailers), and to pay a portion of the price of current purchases (grocery stores, insurance providers, and power companies). Most sponsors keep at least a portion of the cashback to pay expenses and as accretive to profit.
The benefit to the organization can be quite substantial. For example, a charitable organization that is keeping 100% of cashback as donations can expect to receive roughly $1 million per 10,000 shoppers. A commercial business will receive the same amount but will likely pass 80% or more on to the shopper in one form or another. Therefore, a commercial operation keeping 20% of cashback will be retaining roughly $200,000 per 10,000 shoppers.
To learn more about cashback shopping and its potential for your organization, contact Philip A. Davis at pdavishr@comcast.net or 678-977-5578.
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