A Business Case for Cashback Marketing

You can get cashback on pretty much everything these days, but what is cashback marketing and how does it work? Cashback marketing provides money back to customers when they make specific purchases. This might seem too good to be true for the customer, who would likely have made those purchases anyway. You might also question what benefit it has for the cashback website, or for the company selling the products. It works like a “revenue share model” for the providers, which benefits them, as well as the customer and the merchants who partner up.

Cashback marketing is increasing in popularity

The cashback model is becoming increasingly popular within this digital era, as it’s a powerful way for companies to reach a larger audience, increase their revenue and also reward their loyal customers. Maplesyrupmedia has been a successful player in this market, with more customer facing brands such as Quidco having a database of over 5,000 companies for customers to browse and purchase through. Quidco receive a commission on theses purchases, thus rewarding it back to the customer in the form of cashback. Other cashback platforms reward in the form of points as well as cashback, which increases the likelihood of repeat purchasing.

A similar reward system can be seen at voucher websites, which have sprung up in the digital age. However, these are more traditional models, offering money off at the point of sale, rather than cashback after the event. These discount websites also focus on daily deals, which involve discount codes and vouchers. The benefits are the same with companies being able to offer their services or product to a wider audience, and customers benefiting from a wide array of discounted deals.

Cashback marketing solves traditional marketing methods’ problems

You might be familiar with traditional marketing theories like, Porters 5 forces tool, The Boston Matrix, and the 7 P Marketing Mix. Although traditional marketing methods are becoming increasingly obsolete in a digital world, amendments and enhancements are keeping them relevant, with a new life blood.

The Boston Marketing Matrix looks at market share and growth, correlating high market share with higher earnings. It uses four categories to describe this, dogs, cash cows, problem child and stars. Dogs absorb cash and have low market share and growth, whereas cash cows have a high market share in a low growth market. Problem children have low market share in a high growth market, meaning that they generate low cash. They can turn into cash cows or stars but equally can become dogs over time. Stars are the ultimate combination, high market share in a fast developing industry.

The aim of the Boston Marketing Matrix isn’t to highlight one product type as a preference over others, but rather as a tool through which companies can highlight their overall product mix. With too many Cash Cows, a company can see that they’ll likely end up with a product in decline, and an ever reducing market share over time leading to a precipice of too many Dogs. Too many Rising Stars, and a company might not be capitalizing on its assets as well as they could be. Tied in with product life cycles, it’s possible to see where work is needed

It’s necessary for companies to focus on these product life cycles because the aim is to extend them as much as possible before they begin their decline. This is where cashback marketing excels, because it can turn a problem child into a cash cow for example. It’s a similar story to those companies that extend the life of a product by bringing out additional quirky product flavours. It helps extend the original product’s effective life.

Cashback marketing trends

The era of digital moments of truth

With an increasing digital world, Moments of Truth have become key for consumers. Businesses must heed these Moments of Truth to understand the digital touchpoints that effectively produce sales longer-term. Moments of Truth are points where individuals interact with a brand, either consciously, or sub-consciously.

Penned by A.G. Lafley from Procter & Gamble in 2005, the First Moment of Truth refers to the point at which a product is seen in store. This follows on with the Second Moment of Truth when the product is bought, and the consumer realizes the benefits against expectations. These were further expanded in further studies, which also enhanced the theory to include more digital Moments. The Zero Moment of Truth refers to when individuals first start to research a product, predominantly online.

With a more digital age, we’re researching things earlier in the decision making process. This can make tracking harder, and also the understanding of what has led to sales. Cashback marketing provides ideal info, and data into where sales are coming from, and can easily be attributed to marketing activity. As consumers need to prove they bought a product (via easy or automated digital techniques), the data can be easily fed back to a company.

Porter’s 5 forces model looks at five competitive forces, helping to determine profitability. One of the forces, Competition in the Industry, looks at the number of competitors and their threat on a company. If a buyer can’t find the deal they want, they’ll go elsewhere. Partaking in cashback marketing will allow a retailer or service to increase the power of their company, attracting customers to their product over other equivalents. This then decreases the threat of competition.


To survive today’s digital landscape, businesses must be able to break through the noise and find their customers across all of the multi channels now being used. Cashback marketing is a proven way to reach a bigger audience, and increase sales, and the traditional marketing methods can help us understand how.


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