As a growing business owner, one must comprehend that gaining client loyalty and understanding their changing requirements can help survive in today’s competitive market. The bottom line is to keep clients coming back to your brand. With that said, most businesses organise giveaways and freebies regularly to keep their customers sticking. However, cashback rewards are more attractive as it offers returns rather than just saving some bucks on discounts or sales. Cashback is a better strategy to draw customers and brings other functional benefits to small businesses. Precisely, to enhance brand recognition among the masses.
Why should small businesses offer cashback cards?
According to a recent survey, more than 23 lakh small and medium-sized businesses in Australia, accounting for 99.8% of all enterprises. Unlike traditional giveaways and discounts, cashback systems allow you to track sale rates. To begin with, here is a simple description of how a cashback card works. Every time a new customer enters or starts purchasing from your small business, they get awarded with a cashback card. The cashback amount they can retrieve depends on the purchase they have made.
That is, the cashback amount is preset as a percentage (say 5 or 10%) of all transactions. So, as a result, clients receive cash rewards based on the purchase rate they make. Eventually, this persuades them to buy more from your brand rather than a different one. Though the watchword of offering cashback cards is to have customers coming back, here are some other benefits businesses can enjoy,
- Economical for you!
Here is a little secret! As a business owner, you will have to focus on two things. Attract new customers and have your regular customers come back. Creating discounts, offering rewards, and complimentary gifts is part of this struggle. Putting up a new year sale or offering discounts on products and services can compromise your marginal profits by attracting customers.
Some businesses put up discounts on their products such that they no longer make money out of them. As a result, it only extends the break-even point. Yes, offering rewards and freebies can be slightly pricey than to award a cashback card, says recent research.
- Of course, facilitates sales
The catch that cashback rewards offer is money in hand after every purchase! When clients tend to get cash in hand over rewards, they can put it into something they genuinely want. For instance, company A offers freebies (say an electric kettle) for purchases over $100 for the new year. And company B offers a cashback of $30 for purchases over $300.
Customers prefer brand B as they can have $30 in their pockets after purchases rather than an electric kettle, which they might not genuinely need. Such customers will seldom get attracted by your freebie campaign, eventually not sticking around your brand the next time.
- Cashback cards are relatively cheaper!
Offering cash back rewards is not just economical (on saving sale margin) but is also inexpensive to get. It’s because most cashback programmes happen online rather than issuing a printed card to the customers. With that said, arranging a cashback program involves lesser costs over freebie and reward campaigns.
- Some multi-purpose usage
Today, the usage and handling of liquid cash have decreased. Cashback and credit reward cards aim to minimise cash handling among business owners. Eventually, you tend to save extra on bank transactions and savings. However, cashback cards and rewards aren’t solely for clients. To make the best use out of cashback cards, you can also gift them to your employees and have employee trust and loyalty gained effortlessly. On the bottom line, you indicate that your employees mean something to add value to your business.
