What Is Rebate Marketing?
When you purchase something that has a rebate attached to it, you immediately begin to thank the company that started that promotion. That’s one of the simplest benefits of rebate marketing. The beauty in starting a relatable marketing strategy that will promote customer care is involved in every transaction. From the moment that the customer notices the delightful rebate that’s printed on the packaging, their eyes will begin to light up. Their faces might be smiling while they explain such a smart purchase to their coworkers, but their minds will be adding up the dollars they’ll be saving by purchasing a pair of shoes with a rebate attached.
You might think that rebates are only used on electronics and groceries. However, you are mistaken. Rebate marketing has proven to be a worthwhile strategy for successful companies in a wide variety of industries. If you’re still unsure if rebate marketing will help you sell your company’s product offerings, continue reading this guide to find out how this unique strategy has the potential to help you grow your business by increasing your conversion rate.
Difference Between Coupons and Rebates
Being successful in business means that you must continue to meet the goals that you set out to achieve when you drafted your business plan. For instance, the business plan you made probably covered items like profits and returns on investments. If you want to be successful in achieving the goal of making a profit with your business, you need to find a way to increase conversion rates by selling more products through your distribution networks. Marketing your products through coupons and rebate offers are viable solutions to getting more people interested in trying your brand.
These are fundamental differences in terminology that some novice business owners confuse when they create a marketing plan for their businesses. It’s important to differentiate between these two marketing strategies in order to move forward with your marketing plan. The reason that they might appear similar to some folks is because both strategies are often represented through slips of paper. In addition, both items will work to save the buyer on their purchase while creating buzz for the associated product. The key difference between coupons and rebates is how each item is used in transactions. Coupons are used to purchase items at lower prices than advertised; meanwhile, rebates are used to receive money back after making a purchase.
Benefits of Rebate Marketing
There’s a good chance that rebate marketing is the right strategy for your business. However, there are plenty of marketing strategies that you should be considering. Digital marketing is incredibly important, and brand recognition is achieved through traditional marketing techniques as well. Creating and revising a marketing plan for your business involves delicately weaving together several unique marketing strategies. Each strategy should complement the others, and each strategy must work towards achieving the goals set forth in your company’s business plan. The following benefits will help you determine whether this particular marketing strategy is right for your business at this current juncture.
- Benefit 1: Rebate Offers Are an Incentive, Not a LossMany business owners immediately turn down the idea of setting up a rebate marketing program because they are afraid to lose money on their products. However, it is important to remember that you are creating an incentive for the consumer to purchase your product with a possibility of receiving money back from their purchase. It’s only a possibility that the consumer will receive money back because they must take action on sending in the rebate form in a timely manner. Creating a rebate incentive that entices new consumers with a future return on their investments may be enough to increase your conversion rates, so you must consider the possibility of making more profits on those consumers that forget to send in for their rebates before they expire.
- Benefit 2: Digital Rebates Are Even Less ExpensiveIf your business is struggling to balance its budget, you can forget about printing out and distributing thousands of rebate offers for your products. The cost of printing rebates and mailing them to stores might take a large chunk out of your marketing budget. In addition, sending out paper rebate forms will waste an incredibly valuable resource: time. When you create digital rebate incentives, you won’t need to experience the hassle of waiting for retail stores to return your calls, and you won’t have to open all those envelopes that consumers will be sending to get their rebates through the mail.
- Benefit 3: Hooking New CustomersWhether your products are intended for businesses or for consumers, creating a rebate offer is an incentive to purchase that could result in creating a loyal base of customers. The fact of the matter is that people love saving money. Business owners need to keep their operating costs low by purchasing from distributors with rebate offers, and most consumers would rather make a purchase that feels financially responsible as well. Everyone will remember your brand offered money back on a purchase when they return to buy similar products in the future. Before they go to your competition, they’ll check your website to see what kinds of special offers are available to save money.
5 Best Practices for B2B Rebates and Incentives
A successful business to business (B2B) digital marketing campaign works to attract businesses by utilizing key search engine optimization (SEO) strategies to attract more consumers to your website through their search inquiries. You might have already loaded your company’s website with brilliant articles and videos, utilizing keywords that business owners are using to find your products. However, don’t be surprised when you experience some hesitation from shoppers that are visiting your competitors’ websites to find a better deal.
When this happens, there’s a good chance that the consumer will abandon their cart and buy from another company. In order to appeal to the business executives that need your products, you’ll need to prepare more than a list of benefits. A rebate offering should be enticing enough to keep businesses shopping with your brand over your competition.
- B2B Practice #1: Include an expiration date on rebates to remind the customer of the rules of the program. In addition to keeping business matters organized, clearly stating the expiration date for every rebate will help you avoid paying rebates to customers that forget to send in their forms on time.
- B2B Practice #2: Work with your marketing team to refine rebate programs that instill customer loyalty. Rebate programs offer a monetary incentive to customers without creating expectations of a low price for all the products that your company offers.
- B2B Practice #3: Make sure to check each rebate that is submitted to your company against fraudulent behaviors. Checking for fraud is a simple logistical process that will save your company money on paying for unqualified rebates.
- B2B Practice #4: Follow all of the rules set out by the Federal Trade Commission.
- B2B Practice #5: It’s important to implement rebates and incentives for a long enough duration to receive adequate feedback on these marketing strategies. When you offer rebates and incentives, it might make board members question the return on investments. To convince investors and board members that rebates will not cause a financial loss, you may wish to present case studies of similar marketing strategies performed by competitors.
5 Best Practices for B2C Rebates and Incentives
Consumers are finding your products in retail locations and through online searches, but you’re missing some of your conversions because of the high price point for your products. If you lower the price of your products, there’s a good chance that you’ll lose money, and your products might look inferior to those offered by your competition. Offering a rebate incentive to consumers will keep people happy about your products even when they have to pay more than they’d like to pay for them. The temptation to purchase your products at a higher price than similar items will win out when you follow these five best practices for business to consumer (B2C) rebates.
- B2C Practice #1: Savvy shoppers will leap with joy about the rebate programs you offer, but some other shoppers might try to submit fraudulent claims. A best practice when working with B2C rebates is to analyze each rebate that is returned to your company. Check for the original receipt, and make sure that the documents have not been altered before issuing a rebate to consumers.
- B2C Practice #2: Including an expiration date on each rebate form is a necessary requirement. This will help your marketing department analyze and start new rebate programs, and an expiration date will keep your company from having to pay for rebates that consumers have forgotten.
- B2C Practice #3: The practice of offering a rebate in place of lowering prices instills confidence in product offerings. Create content that outlines the benefits of each product to show consumers how much value they will receive. They might have to pay more up front to receive that value, but the rebate is an incentive that will drive sales of worthy product offerings.
- B2C Practice #4: Try increasing the value of the rebate in order to convince more customers to purchase the product.
- B2C Practice #5: There’s a good chance that investors and board members will be too afraid to try this strategy. Presenting case studies might ensure your supporters that this strategy has the potential to pay off in a big way.
Stats About Using Rebates
- According to a report on discounts in marketing created by the Boston Consulting Group, only 20% of all businesses take part in value-based discounting. The majority of businesses are willing to invest their marketing budgets into discounting programs that place high discounts on their products. The 20% of businesses that rely upon value-based strategies choose programs like rebate marketing to motivate the buying habits of customers without losing a large portion of profits on each sale. In addition to holding onto some profits, rebate marketing avoids discounting the value of your products.
- The Balance SMB reports that fraud rates for rebate offers exist in high quantities. Nearly one-tenth of all rebate requests are fraudulent. This includes people changing dates on receipts and creating rebates for products that aren’t covered in the promotion. Be sure to protect against fraud by creating a system for checking the authenticity of each rebate.