eBusiness Secrets is a series of in-depth articles about Internet mediated Business and Commerce, what makes a great eBusiness and how do the best ensure they keep thriving online.
Cashback sites are blood-sucking parasytes. I’ve recently said that much. In the financial services market they increase cost per sale while adding no value to merchants. They don’t put your brand in front of users that would otherwise not buy from you, nor do they encourage more repeat purchases or higher average basket values. They live off your top line, effectively charging a premium for access to the wallets of those customers you have acquired through your existing marketing activity. They incentivise churn and commoditise the market. They’re evil.
It doesn’t have to be that way. As ever, there has to be a silver lining. While current usage trends offer little hope of offsetting marketing costs against cashback spend today, explosive growth in other mediated channels would indicate that over time customers will use cashback sites as their preferred shopping interface, diminishing the need to spend in other channels.
Google’s algorithms provide today’s shoppers with a proxy for trust. Customers perceive Google as a reputation management system, not just a search engine. Cashback sites users’ have got a much better proxy for this today: their trusted cashback site. While the headline feature of these sites is the fact you get money back, a much interesting feature is the fact that they run extremely lively forums. Their users like to talk about what they buy and will not think twice of thrashing a bad experience or recommending a good one.
Cashbacks are a brand’s social play. Cashback sites have grown entirely by word of mouth, they have a large audience of commited visitors and hold some of the largest collections of user generated content. Cashbacks, it turns out, are very successful social media sites. For years now we’ve been looking for ways for commercial organizations to exploit social media. We’ve tried advertising on Facebook next to nazi propaganda. We’ve tried throwing the brand book out of the window, concocting silly characters and creating profiles in MySpace for them. Heck, we’ve even tried grabbing land in Second Life – land that must surely lie now covered in cobwebs, waiting for the switch to be turned off out of mercy. I think we’ve finally hit gold. Cashbacks are still infant, wild and parasytic. But I have changed my mind about them and so should you. With the right nurturing and guidance, cashbacks could become the online marketer’s weapon of choice in the world of social media.
The time is now. Cashback sites will remain when Facebook is long gone. Think about it. What would you rather get as a thank you for spending some of your ever-shrinking free time, a poke or £50? A few years from now, when Facebook is just a distant memory and Third or Fourth Life once again fail to make a dent, cashback sites will still be going strong and those of us brave enough to support them -and learn to work with them- from the start will have turned the relationship to symbiosis, and will be in an enviable position to benefit from their staying power.