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.
10 alternative ways to discount your offering:
- First purchase– Discount the first purchase a buyer makes with you.
- Follow up offer – Follow up those who didn’t buy with an incentive.
- Cashback – Don’t discount, but provide cash back to those who pay full price.
- Themed Sale – Create an event or reason to hold a sale.
- Price Match – Offer to match the genuine price of a competitor.
- Buy more – Incentivise buyers to spend more with ascending discounts.
- Free gift- Offer a free gift with purchase.
- Early bird – Offer a discount for those who buy/pay in advance.
- Flash Sale – Hold a flash sale
- Budget version -create a naturally cheaper version of your offering to appeal to lower spending buyers.
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