How ecommerce brands can leverage Cashbacks to grow their business

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The Indian ecommerce market has grown up to 85% in the last 10 years, thanks to the exponential growth of the internet, online infrastructure, the pandemic and various other factors. By 2027, the number of online shoppers is expected to reach 427 million, and the overall e-comm industry is estimated to be worth over $350 billion by 2030.

One thing that’s truly unique about Indian e-commerce is how dynamic and adaptable it has to be due to the wide range of demographics and festive occasions in our country. Taking a recent example, instant delivery services like Blinkit and Instamart created whole new themes and pricing modules to help different sets of customers celebrate Valentine’s Day. It is reasonable to expect that such highly-customised offerings resulted in a higher number of active users that week due to all the discounts and loyalty programs they activated. No surprises then, that D2C businesses do the same for various regional festivals, cricket tournaments, Bollywood releases and all the many meaningful occasions in a year in the life of the average Indian consumer. Now imagine the complicated manoeuvrings, documenting and book-keeping required to manage all these discounts and rewards manually!

Loyalty Programs in Ecommerce

All business-to-consumer incentives, like discounts, rewards and vouchers, that reward customers for their purchases and encourage them to shop more may broadly be categorised under the term ‘Loyalty Programs’. Before we dive into what the best way is for a business to manage its loyalty programs, let’s investigate the different types of loyalty programs and how they benefit your business.

Broadly speaking, More offers -> More purchases, and more happy customers -> Higher word of mouth.

However, not all loyalty programs serve businesses equally. While some are more appealing and beneficial to both you and your customers, some may actually be harming your brand reputation, such as overusing discounts. While they’re attractive to customers in the beginning, seeing discounted products all year long lowers the perceived value of your brand in customers’ minds.

On the other hand, some loyalty programs are equally beneficial to you and your customers equally, such as cashbacks.Cashback is an affordability tool where your customers earn back a certain amount of the purchase value while shopping online. Unlike discounts, which reduce the price of the product at the time of purchase, cashbacks are credited to the customer’s account right after the purchase is completed. The customer can then use the cashback amount to shop more.

Cashbacks are a win-win strategy for both consumers and businesses. It gives customers more satisfaction and value for their purchases, while giving businesses the leverage to increase sales, customer retention, and brand loyalty.

Why Cashbacks are Superior to Other Loyalty Programs

Cashbacks have a number of advantages over other types of loyalty programs, such as coupons, discounts, vouchers, etc. Here are a few examples:

1. Ease of use: All a customer has to do to earn a cashback is to make a purchase. It’s that simple and straightforward. On the other hand, collecting a certain amount of points, redeeming vouchers, or using coupons to receive the benefit can seem like too much work to your customers.
2. No expiry date: Cashbacks do not expire or lose value over time and have no specific terms and conditions. Customers can use the cashback amount for whatever they want, which gives them a sense of freedom.
3. Higher perceived value: Receiving a cashback gives people instant gratification, as it’s literally real money being credited to their bank account. This also creates a positive feedback loop, encouraging customers to shop more often.
4. No negative effects: Offering discounts all year round can sometimes backfire, as it degrades your overall brand value. People start associating your products with discounts and would refrain from buying them at their usual price, whereas a cashback would simply come off as a bonus.

Why Every Ecommerce Business Should Try Cashbacks

Festive occasions are a golden opportunity for ecommerce businesses to boost their sales and revenue. However, it is also a highly competitive time, as customers have many options to choose from. To stand out from the crowd and win customer loyalty, you need to offer something extra and unique.

Cashbacks are the perfect solution for this challenge, as they will help you:

1. Acquire new customers: Cashbacks can attract new customers who are looking for the best deals online. By offering cashbacks on top of discounts, you can offer more value and differentiate your brand from your competitors.
2. Retain existing customers: By offering cashbacks on every purchase, you can reward your existing customers for repeat purchases and retain them for a longer period of time.
3. Generate word of mouth: As much as people love getting rewarded, they love talking about it too. And that can result in a positive word of mouth for you in the market.

Thus, having cashbacks as loyalty programs in place, you can expect to gain an edge over your competition and see a higher growth curve in a short span of time. But how do you integrate such a program into your business?

How Hatio Payouts Can Help You get started with Cashbacks

Any payment that you, as a business, make to your clients, customers, partners or even employees, is considered a “payout”. Traditionally, you would send a payout to a third party via bank transfer -or more recently, UPI- right? But imagine sending cashbacks to hundreds and thousands of customers manually. Imagine the hassle of collecting your customers’ bank account details or UPI ID, adding them as beneficiaries to your account, transferring the amount and waiting for confirmation from your bank that the amount has indeed been transferred. It’s simply not the customer experience expected from any business in 2024. Not to mention the mountains of paperwork it would take for a business to keep track of its accounts. This is where payout automation comes in.

If you want to build a smooth customer rewards program that’s easy to integrate with your ecommerce business and allows you to keep track of each transaction, you need a dependable payout automation solution like Hatio Payouts. Hatio Payouts is a powerful payment disbursal API that you can integrate into your system to automate all your future payouts forever. And with Hatio, your payouts -such as customer cashbacks- are quick, efficient and secure.

With the Hatio Payouts API, you can can:
1. Create custom cashback campaigns based on your business goals and customer segments.
2. Integrate with various payment methods, such as IMPS, UPI, etc.
3. Track and monitor your cashback transactions in real-time.
4. Avail automatic account reconciliation.
5. Save valuable employee time and resources.

Bear in mind that the Hatio Payouts API lets you manage all your outgoing payments from one place. This means that in addition to customer cashbacks, you can also use it to send instant COD Refunds, and automate your partner and vendor payments as well.

As a fully owned subsidiary of Billdesk, you can rest assured that Hatio complies with all the legal and regulatory requirements and puts your funds’ security first. All you have to do to take your first step towards generating more sales and scaling your business to the next level is get in touch with us.

Conclusion

Having an ecommerce business does not automatically mean you should offer discounts. But in India’s highly competitive ecommerce landscape, you should absolutely take advantage of payout automation round the year to securely and creatively introduce new offers and loyalty programs to tap into a larger customer base and induce repeat purchases from your existing customers. With a trusted payout provider like Hatio, you can get started in just a few clicks and automate the process once and for all.