The concept of cashback is a growing trend amongst Australian consumers, with over a million Australians utilising cashback services. Find out what cashback is and how it could work for online businesses.
Because of its rewarding nature, incentivised cashback affiliates have grown tremendously in the past few years. The impact of cost-of-living pressures has increased the popularity of cashback incentives, and it shows no signs of slowing down.
According to latest Ipsos iris data, over 11.2 million Australians used a retail loyalty website or app in May 2023, which is the highest recorded number of the year. Additionally, 58.7% of internet users worldwide stated that earning rewards or loyalty points was one of the most valued aspects of their retail shopping experience. This indicates that shoppers are becoming increasingly deal-sensitive.
Cashback sites are among the top-earning affiliate types within the affiliate and partnership industry. Companies who have participated in rewards such as cashback grew their revenue up to two and a half times faster than competitors who do not use them while generating 100-400% higher returns to their shareholders.
Here are answers to the most common questions asked by advertisers when evaluating cashback partnerships:
- What is cashback?
- How Does Cash Back Work?
- How can retailers work with cashback affiliates?
- What are some of the misconceptions about cashback?
- What are the benefits of cashback affiliates?
- What Are Some Cashback Strategies Retailers Can Explore?
- Can you work offline with cashback affiliates?
- How Can I Control How Much Commission and Cashback is Passed Back?
- How Do I Know the Sales Are Incremental to My Existing Pipeline?
What is Cashback?
How Does Cashback Work?
How Can Retailers Work with Cashback Affiliates?
Cashback sites are also increasing their customer reach. Recently, Cashrewards has introduced its partnership with ANZ which exclusively targets ANZ customers - allowing advertisers to reach a specific pool of consumers. ShopBack has also recently partnered with Westpac which allows Westpac customers to link their debit or credit card and gain exclusive access to offers across many brands and higher Cashback opportunities.
What Are the Benefits of Cashback Affiliates?
Higher Average Order Value (AOV)
Improved Conversion Rate
New Audience Reach
Return on Ad Spend (ROAS) Targets
Cashback websites work on a CPA model,
What Are Some Cashback Strategies Retailers Can Explore?
When it comes to working closely and building a stronger relationship with cashback sites, the list below outlines the primary ways that an advertiser can optimise via cashback:
Increased Brand Exposure
Tactical CPA increases can create a buzz around a brand resulting in increased exposure across sites, including homepage or category pages, social media or EDM exposure.
Optimal Paid Placement
Cashback sites may offer some paid placement options to businesses, which are optional to participate in. These are premium placements that can include home page banners, dedicated email and more.
Placements are common during vital retail periods, and they are worth investing in because of the premium exposure guaranteed in return.
Flash sales give consumers an extra jolt to act quickly and purchase when the cashback rate is at its highest, leading to a spike in sales. It refers to the advertiser assigning a higher commission rate to the cashback site for a shorter than usual time frame (typically 1-2 hours).
It can be a great way to control the budget as the exposure will run for a limited time. Flash sales are organised by the affiliate businesses and are pitched to the advertiser on a case-by-case basis.
Can You Work Offline With Cashback Affiliates?
A recent development in the world of cashback within the Australian market is implementing this reward via brick-and-mortar stores.
Advertisers with storefronts can utilise card-linked technology
How Can I Control How Much Commission and Cashback is Passed Back?
Advertisers can control the amount of commission they pay their affiliates. Custom commission rates can be scaled down to product margins and even a specific product level.
For example, a department store can assign a 2% commission to electronics, a 10% commission to children's toys and 8% commission to all fashion and apparel simultaneously. With the cashback, affiliate decides the commission percentage passed to the user.
How Do I Know the Sales Are Incremental to My Existing Pipeline?
This is dependent on how an individual advertiser views incremental sales. This could be a percentage of new customer sales, higher AOV or increased conversion rates.
The answer here is to:
- Ensure your program is set up to track and report all the most important incremental KPIs optimally
- Test and review.
One way to do this would be to look at performance metrics before partners have started promoting your brand and then measure performance against a like-for-like period after they are live.
In summary, here are some of the key highlights of cashback in affiliate marketing:-
- Consumers’ acceptance of cashback is growing in Australia
- Cashback sites provide the opportunity for advertisers to reach new audiences
- Cashback is an effective way to incentivise consumers
- Cashback is now possible in both online and offline stores
Commission Factory is not only the Asia-Pacific region’s largest affiliate network, working with more than 800 of the world's biggest brands, but is also a performance marketing platform that allows content creators, affiliates and partners to earn money and retailers to increase sales.
Register as an Affiliate or an Advertiser today.
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