Understand Your Buyer > How To Convert > The Cash Back Effect
What is it?
An alternative to discounting, offering cash back has the same effect but without associating the offering with a “lower” price.
Why does it work?
It works because it encourages the buyer to buy in the same way a discount would; they get a great deal on an offering they need, but It doesn’t affect how the price of the offering is perceived which makes everyone feel better. Discounting can make an offering feel “cheaper” and effect perception of value, but offering cash back avoids this entirely whilst achieving the same overall objective.
How can you use it?
Depending on your offering, think about how you could offer cash back and how much the cash back might be. This works best for physical products, but can apply to anything that you sell.
Will you offer £50, £100 or £500 cash back? over what time period? How should your buyer claim it? Being clear on the details and if there are any qualifying criteria is essential to success.