Fundraising Archives - ITB Partners - Management Consultants

Have you heard of “cashback shopping”? If you have heard of Rakuten (formerly Ebates), then you have experienced the leading example of business to consumer (B2C) cashback shopping. In B2C cash back shopping, the cashback is paid directly to the shopper as an incentive to buy. Why? It is much less expensive to sell an item on-line than in a brick and mortar store. Online retailers take a portion of these savings and invest them in cashback advertising to bring more shoppers into their on-line stores and encourage on-line vs. in-store purchases.

This same cashback shopping concept can be also be applied in a business to business (B2B) environment. The biggest drawback of B2C cashback is that shoppers are reluctant to provide their personal contact information to someone they do not know, in this case, Rakuten. In the B2B environment, shoppers already have a relationship with the sponsoring organization. The sponsor might be their bank, church, favorite restaurant, or any number of other organizations. The key is for the sponsoring organization to have a trusted relationship with the shopper. In many cases, the sponsor may already have significant personal information on the shopper and be sending the shopper regular communications.

Most organizations with ten thousand plus (10,000+) patrons can benefit through adopting cashback shopping as a component of their on-going promotion program. The more potential shoppers, the greater the benefit. The cashback that flows to the organization can be utilized as a donation (for churches and charities), to pay for future purchases (retailers), and to pay a portion of the price of current purchases (grocery stores, insurance providers, and power companies). Most sponsors keep at least a portion of the cashback to pay expenses and as accretive to profit.

The benefit to the organization can be quite substantial. For example, a charitable organization that is keeping 100% of cashback as donations can expect to receive roughly $1 million per 10,000 shoppers. A commercial business will receive the same amount but will likely pass 80% or more on to the shopper in one form or another. Therefore, a commercial operation keeping 20% of cashback will be retaining roughly $200,000 per 10,000 shoppers.

To learn more about cashback shopping and its potential for your organization, contact Philip A. Davis at pdavishr@comcast.net or 678-977-5578.

Thank you for visiting our blog.

Jim Weber – Managing Partner, ITB Partners

I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.

Your feedback helps me continue to publish articles that you want to read. Your input is very important to me so; please leave a comment.

Jim Weber – Managing Partner, ITB Partners

Particularly in the era of “social distancing”, on-line shopping is growing at a rapid pace and with it, the opportunity presented by “Cash Back Shopping.” Cashback shopping taps into the normal marketing budgets of on-line retailers. Just like newspaper and other media advertising, Cash Back programs are designed by retailers to attract shoppers to their on-line shopping sites and to make purchases based on their standard pricing, discounts, reward, and customer service policies and the new dimension of cashback shopping. You’ve probably heard of the biggest cashback provider in the direct to consumer space which is Rakuten/Ebates. On the other hand, the biggest provider in the business to business space is Retail Benefits, Inc. (RBI).

Retail Benefits markets only through 3^rd parties such as banks and credit unions, businesses (with large direct to consumer marketing reach), churches and charities, and political parties. Retail Benefits is an invisible partner to its sponsor organizations as RBI provides the downloadable app that connects the sponsor organization with its potential shoppers and over 4,500 on-line retailers who participate in the program. The RBI app is always customized and branded to each sponsor using the sponsor’s own marketing message and its standard “look and feel”. Using Retail Benefits is a one time download of the app onto the shopper’s desktop computer and/or mobile device. Once the installed the shopper shops as always and receives cash back on every purchase.

The cash flows from the retailer to RBI to the sponsor. Each sponsor then uses the cashback to advance its mission. Examples include charities that keep all or most of the cashback as a tax-deductible donation; banks and credit unions that add the cashback to enhance their existing cashback programs on the credit cards they are already offering, and business that keeps a portion of the cashback to enhance net income and convert the balance into “business bucks” to pay for the services they normally sale.

To learn more about how cashback shopping can create a strategic advantage for you and/or your contacts, contact Phil Davis, Retail Benefits Partner.