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CS - Dynamic Cash Back

CASE STUDY Dynamic Cash Back connects acquisition and loyalty

Challenge

When a brand offered higher Cash Back rates than competitors, they saw stronger lifetime spend of new-to-files (NTFs) versus their competitors. When Cash Back rates dropped to roughly equivalent levels, more of the spend shifted to competitors.

Shoppers started receiving significantly better rates at the competitor, and as a result the lifetime spend of NTFs was higher than with the brand. The competitor had been aggressive with their approach:

  • Leveraged Price Magic to conquest.
  • Ran a higher average base Cash Back rate (4%) than the brand (1%).
  • Participated in Q4 Cash Back promotions vs. 0 from the brand.
  • Offered a competitive targeted 10% Cash Back.

Solution

The competitor had been aggressive with their approach:

  • Rakuten launched a targeted acquisition campaign offering a personalized elevated Cash Back rate.
  • Using the brand’s CRM, Rakuten suppressed current customers from the campaign to avoid serving the elevated rate to existing customers.
  • Targeted media in the form of solo email and app pushes were served to drive campaign awareness and engagement with the audience.

Key Learnings

Strategic use of Cash Back drives different business objectives

After converting NTFs in the targeted campaign, there was some repeat buying at the brand, but over time those buyers received better Cash Back rates from competitors.

The brand didn’t nurture the NTFs with a Cash Back rate that would perform, resulting in more of them buying through competitors and spending with a higher AOV.

Results

The brand’s share of voice declined because of their competitor’s more aggressive and strategic approach.

Learn how Rakuten merchants turn rewards into revenue and brand loyalty

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