How to create 40% more sales in the online store using cashback services
In 2013, the American cashback service Ebates generated $ 2.3 billion for online stores, which amounted to approximately 1% of the total turnover of online sales in the United States. In 2014, Ebates was bought for $ 1 billion. Japanese company Rakuten.
Many online stores solve the problem of increasing sales using additional channels. Today we will talk about the cashback channel, which allows you to increase the number of sales by 40%, as well as increase the average check in the basket.
In short, cashback is a refund from the purchase. The client makes purchases on the Internet and receives a percentage from this. Cashback services are actively developing in Russia and have been working in the West for decades. In this post, based on research affiliatewindow.com will help to understand some of the misconceptions that hover around cashback services, as well as to prove that cashback services are additional sales drivers that increase the average check in an online store basket.
To begin with, we will define what “additional sales” are and agree that these are the sales that would not have been if the advertising campaign related to the cashback service had not been launched. This is important to clearly understand, understanding the effectiveness of cashback services as sales drivers.
It is worth noting that cash back services, as a rule, are very easily integrated into business processes. To do this, you do not need to write your own functionality, or change the business chain of the online store. Most often, it’s enough to just agree to the terms in the affiliate network and start selling through the cashback channel.
Sources of Sales
Analyzing the channels of attracting customers to online stores, there is a misconception that a client goes through many sites on the way to a particular online store. For example, he first goes to Google, from there he gets to the Forum, from the Forum to the cashback website or coupon, from there to the online store itself. However, research by Western colleagues suggests that 90% of transactions are from the same source. That is, the user gets from the search engine directly to the online store, or from the forum to the online store, or from the cashback service to the online store. This figure varies from industry to industry, for example:
-Retail - 94.83% from a single source
-Sale of tickets - 96% from a single source
-Travels - 95% from a single source
That is, only one transaction, and the buyer is in your pocket. In addition to this, it can be noted that the remaining units of percent of transactions go through a maximum of 4-5 intermediate sites, not more. Interestingly, sites associated with loyalty, rewards and cashback usually have a minimal number of clicks.
The second misconception that one often encounters is the accusation of cashback services that they use the content of online stores, thereby taking traffic away from them. The logo, description of the store, description of goods, coupons, links to social networks of stores are used. However, the previous analysis suggests that most purchases in online stores are made through a single referral. In each case, it is different, but most often it is only one, without intermediate links. The risk of competition in a search engine with a store is removed by displaying “minus words” in advertisements that prohibit the use of specific brand names of online stores in order to exclude intersection with them. The place where the content is reused is located on the cashback service itself, where there is a link to the online store. But going there the client knows exactly where it is and knows how the cashback service works. And if he switched from there to an online store, he did it on purpose with clear intentions. Therefore, the reused content of the online store does not interfere, but helps to generate additional sales that would not exist if it had not been reused.
Increasing the average purchase receipt
As a rule, a purchase receipt in an online store is tied to the% of cashback that a customer receives. This leads to the fact that the average purchase check for a client who comes from the cashback channel often increases, often leaving other channels for attracting an audience behind. This is because the client is motivated to get more cashback, and as a result, spends more. Here is a graphic diagram showing the average check in different industries:
For the advertiser in the beauty industry, cashback sites have the largest average check (loyalty / reward) of all types of promotion. For gifts and tickets, they show impressive performance comparable to other types of traffic.
The diagram below also shows that cashback sites in the travel segment generate sufficient sales traffic that is second only to True Content.
Understanding which products are most profitable, cashback services can focus on those products, helping stores sell more. That is why a cashback channel can be a good alternative to regular online sales to generate higher checks in the basket.
An interested user usually becomes more loyal to the cashback concept than to the brand itself. To do this, he only needs to understand that cashback services are shared with the client by the advertising budget of companies without increasing prices for goods. Therefore, cashback services can take certain actions for repeated sales. For example, promotions may encourage you to buy more than once a month for interesting categories of products. For a repeat purchase, a higher percentage of cashback may be paid. This allows advertisers to increase sales and retain buyers who might buy elsewhere. Our last month report also indicates that around 40% of repeat purchases are occurring.
It is up to every business to decide whether to use cashback services or not, however, many years of Western experience and the growth dynamics of our service in the Russian market indicate that the Western model is taking root very well in Russia, which inevitably leads to an increase in the number of smart advertisers using cashback services to increase the average purchase receipt and the number of sales in general.