Cash Back offers: a good or bad strategy?

Cash Back offers: a good or bad strategy?

A very wise man once said, “A lot of times, people don’t know what they want until you show it to them.” These words are not hollow but are backed by

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cashbackA very wise man once said, “A lot of times, people don’t know what they want until you show it to them.” These words are not hollow but are backed by the success story of Steve Job’s Apple. The use of Internet to kart, tag or renew; is picking up momentum in India. However, it will be incorrect to say it is not in its infancy. Cash back offers by sites like Paytm, Freecharge handhold the customers to increase their online transactions. There is a sea of opportunities to be tapped and this reverse marketing strategy seems to be more effective than any ATL strategy in cost and communication. As the drum catches up with easily measurable marketing strategies, the question rises whether cashback sites are worthy of their place in our marketing budget? [dropcap

Cash back rewards is not a new concept. For many years now, offline retailers like Wal-Mart, Selfridges and many other have used this strategy to maintain loyalty and increase repeat purchases among the customers. The customers even shopped for points to be redeemed during Christmas season, a win-win for both. Happy customers, happier retailers!

This strategy is not only a source of revenue for these online wallet businesses, but it also spurred the growth in online transactions in India. When money is coming your way, you don’t ask questions; and so all the online players including the e-retailers are adopting it and taking advantage of the already tried and tested strategy. And I am happy to see that I share my opinion with the top honchos. Be it the homegrown start-up ‘pennyful.in’ or Alibaba’s entry’ strategy of buying 25 percent stake of Paytm, my argument is corroborated.

Well, if there are any more doubts then ask yourself, why Snapdeal acquired Freecharge?

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