Marketing Examined - 🔍 Discounts vs. Cashback Offers

Whereas growth and market share were once the focus, profitability must be one of the top KPIs in many businesses this year.

Today’s case study might help to give your bottom line quite a boost.

Wistia analyzed over 80 million videos published on their platform, and the main takeaway is that more and more companies are investing in video.

Here’s why:

• Video is one of the best tools for product education and TOF awareness while influencing BOF behavior
• Long-form video is the highest-performing video segment
• LinkedIn and Youtube are the most effective distribution channels for businesses
• Average video engagement rates are consistent year after year

So, Wistia took these insights and created an all-you-need-to-know report where you’ll learn:

• What types of videos are the highest-performing videos
• What the most popular channels for video are
• What to do if your video isn’t performing up to standard benchmarks
• How to increase video engagement

You can download the full report here.

With one simple change in discounting strategy, CrossNet added 600% more to its bottom line without hurting the conversion rate. The co-founder of CrossNet, Chris Meade, shared the secret on LinkedIn.

They switched from a $20 off signup discount to a $20 cash-back offer. Sounds simple and not that impactful, right?

Here’s the thing: Crossnet customers only have a 15% redemption rate on the cash-back reward.

Here’s how it helps Crossnet:

CrossNet benefited from the lift in conversion rates due to the discounting while still managing to retain a significant portion of those discount margins. Even if the redemption rate of the discounts was higher than expected, given their AOV is higher than $20, they would still have an upside to their bottom line compared to simply offering a $20 discount upfront.

CashBack also benefits CrossNet’s brand image. Discounts are often seen as a reduction in the value of the product that erodes the brand value, whereas CashBack offers are seen as a direct benefit to the customers, something the company offers to show their appreciation.

Unlike one-time discounts, cashback gives customers a reason to come back and make a 2nd purchase. Customers who made a second purchase are 54% more likely to make a third purchase than those who only made one purchase. Cashback helps boost customer retention and LTV.

There’s a potential downside to using CashBack. Discounts tend to be more effective at driving immediate purchases by creating a sense of urgency, while CashBack offers are more effective at building long-term loyalty.

Surprisingly, Chris said the cashback offer also led to a massive lift in CVR for them. This is just one more reason to A/B test this offer yourself.

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Crossnet tested with a tool specifically built for cashback offers called fondue - worth testing out if you don’t want to go through the hassle of setting it up yourself.

Chi & Alex