Leverage dynamic cashback personalization to deliver lifelong customer loyalty

As we find ourselves in the midst of a new holiday season, marketers are looking for different strategies to set themselves apart from their competition in an increasingly crowded space. There are now more ways for marketers to reach consumers in compelling and engaging ways than ever before – and Cash Back is a strategy that now dominates the space.

I sat down with Kristen Gall, President of Rakuten Rewards to talk about recent advancements in the Cash Back space, how it is increasingly data-driven and personalized, and how Cash Back is ready for continued growth as we venture into the new normal.

Gary Drenik: In what ways can marketers leverage Cash Back Rewards to acquire new consumers?

Kristen Gall: Cash Back can meet almost any marketing goal, whether it’s rewarding loyal customers, gaining market share, or increasing cart size. It’s super effective at acquiring new customers because it’s a strong, customizable incentive to get someone to visit a site and convert a sale. This can be especially useful during peak shopping seasons when standing out in a crowded business environment is the only way to win.

Taking advantage of the pride buyers feel when they find an amazing deal can be a really powerful force in gaining market share and loyalty. Consumers want meaningful experiences and Cash Back is a great way to deliver them. A recent Prosper Insights and Analytics survey found that almost half of consumers (44%) use their credit card more when offered cash back. Less than a quarter (23%) said the discounts alone made them spend more.

Drenik: How can cash back help strengthen relationships with existing customers?

Gall: Consumers want to know that brands value their business. Offering rewards for their loyalty is a perfect tool to do this. A cash back offer paired with an exclusive offer that other consumers cannot access is a perfect part of a loyalty campaign that will make a loyal customer feel special. This can create a sense of exclusivity and community that builds loyalty among consumers.

Cash Back Rewards can also be part of a reward structure that encourages customers to stay in long term relationships with their favorite traders. An example could be a Cash Back loyalty program where customers receive an additional 10% cash back on their 10e purchase.

Drenik: In what ways can marketers deliver personalized cash back experiences to different consumers?

Gall: The cash back industry is increasingly data driven and hyper-personalized. We are the pioneers of the next era of Cash Back by making it more dynamic, flexible and agile.

We recently launched a personalized rewards product in partnership with Rakuten Advertising that allows advertisers to create and deliver personalized cash back offers using affiliate links on publisher sites. Merchants can leverage their CRM data and combine it with our proprietary data to tailor cashback offers on an individual level. This creates the opportunity to maximize their investment in affiliate marketing by delivering the offers that are most likely to generate conversions without leaving any money on the table.

Our partnership with leader in affiliate marketing Rakuten Advertising helps us deliver organic and authentic offers to consumers. The contextual relevance of affiliate links means that they are offers that complement a consumer’s online journey rather than invasive or disruptive.

Drenik: How has the rewards and incentives industry evolved to meet the needs of consumers throughout the pandemic?

Gall: People have become more cautious about their spending choices and macroeconomic uncertainty has an impact on the daily anxieties of households. A recent Prosper Insights & Analytics survey showed that one in five adults is more likely to seek sales simply because of fluctuations in the price of gasoline.

Rakuten is all about optimism – our name means ‘optimism’ in Japanese – and we looked at that mindset. We have helped our partners provide fulfilling and joyful experiences at a time when it was difficult to maintain a prospect of optimism.

This year, we’ve seen more partner merchants take advantage of rewards-type incentives to build consumer confidence. Earning money by shopping provides a sense of pride and joy while reducing the financial impact they feel.

Drenik: How has this development helped pave the way for long-term success in a post-pandemic world?

The boom in e-commerce due to the pandemic is here to stay. The industry has been moving towards a greater share of online sales for some time, and the pandemic has accelerated it. Retailers who have grown their online markets overnight now have the digital infrastructure they need to effectively and efficiently serve their online customers. On the other side of the coin, consumers have become more accustomed to starting their purchases online.

The sophistication and impact of Cash Back has increased along with the renaissance of e-commerce. As merchants understand the best practices for using rewards to drive traffic and sales, we will continue to grow our portfolio of solutions to help them achieve their goals.

Drenik: Thank you very much for discussing with me the future of Cash Back, its evolution to become more and more personalized to meet the needs of marketers and provide buyers with unique and engaging experiences.

Joseph P. Harris