Using cashback sites to corner high income earners

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Cashback sites attract high income earners hungry for a good deal. Here’s how you can get a piece of the action.

A cashback, loyalty or reward site trades mainly on the loyalties it can command amongst its members. These sites have a vested interest in customers developing the habit of to returning to shop on their site when they make a purchase.

So what does a cashback customer look like? Rather than showing that cashback and reward customers are ‘deal scavengers’ who are income-poor and resist buying without an incentive, Quidco report almost half of their members earn over £50k per annum (almost double the average UK salary of £26k in 2011) and the majority are classed in NRS socio-economic grades A or B.

TopCashback recently surveyed a sample of 755 cashback users. According to Graham Jenner, Partnerships Manager at TopCashback,

“52% of users purchase from brands that they had never considered before. This figure highlights the influence that cashback can have on the final decision. The ‘we would have got the sale anyway’ argument could fall down as over half of the users have bought from people they would not have considered.”

Certain other sites that offer cashback through corporate intranets are also able to provide on-target demographic information for brands wishing to attract higher income earners. The nature of these corporate partnerships enables a reasonably clear link to be made between the employer and the income or even geographic location of the member.

Raising your game You can maximise the number of your cashback sales by supporting your cashback promotions with additional coverage from the affiliate.

One advertiser offering home furnishings ran a promotion with TopCashback doubling the cashback on a particular product, but keeping all other products at the original rate. This was supported by additional tenancy and newsletter placements including homepage coverage for a day (homepage banners receive 15m impressions/month) and newsletter coverage (distributed to over a million members).

The additional cost for this advertiser was £1,000, an amount which compares very favourably to offline print opportunities of the same scale. As a point of comparison, a major national newspaper offers coverage on the front page of its inserts for £10,500, reaching an audience of 950,000.

In return, this advertiser saw sales of the products on which the additional cashback was offered increase by 121%, with a 250% increase in revenue. Given that the advertiser sells home furnishing products the average order values (AOVs) are very high: the product on which the cashback was offered was a considered rather than an impulse purchase.

This example demonstrates that targeted, tactical cashback rates work even on products that are not fast-moving.

Raising the AOV without a cashback incentive But advertisers do not always need to offer an increased cashback rate in order to increase incremental sales. As we have seen, far from being ‘deal scavengers’ who will not shop without a reward, cashback customers generally-speaking tend to produce higher average order values when compared to the affiliate programme as a whole.

Working on this assumption one large electrical retailer ran a competition with Topcashback to win a TV; in return, members had the choice of either making a purchase with the retailer or leaving a comment suggesting a product they would like to buy. The campaign was promoted on TopCashback’s homepage and Newsletter.

In the two weeks that the promotion ran this produced a 32% increase in sales and a 58% increase in orders on the same two weeks the month before. In addition, the average order value (AOV) increased from £237 to £251.

As you can see the possibilities for increases in sales and AOV are huge for advertisers who add cashback sites to their marketing mix. In my next post I’ll be exploring another powerful type of affiliate: vouchercode sites.

View this article live on The Marketing Lounge


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