Resellers can be involved in both types of rebate agreement as both a customer and a vendor/distributor. A customer rebate is used as an incentive used by businesses to increase sales and maintain customer loyalty. On the other hand, distributor rebates are rebates received by resellers from where they get the products they sell. Usually, it comes from manufacturers and it serves as a reward for their bulk purchases. Distributor rebate agreements vary depending on the volume or value of the purchases from the manufacturer.
Here are important considerations to take note of to ensure success of your rebate program. Do these practices to gain maximum possible return of investment.
1. Analyze your audience
If you are able to personalize your marketing this can lead to the success of your distributor rebate program. You can do this by collecting accurate contact and demographic data when customers register an account to your site.
2. Align promotions with organizational goal
Make sure you have measurable and specific outcomes that you want to achieve as this will create a structure in your marketing strategy. Here are 4 organizational goals you can aim for: acquire new customers, increase your sales, gain repeat customers, or get rid of old inventory.
3. Strategically select rewards
Target people who are suited for a specific reward. New customers and repeat customers may not have the same amount of value when it comes to offering discounts or offers. This is where you can use short term promotions or first time buyer discounts.
4. Communicate with customers
To maximize effectiveness of your program, engage with customers regularly by utilizing emails, sms, or push notifications. You can disseminate discount info using this practice. This way, you are promoting your discount at a low cost.
5. Offer up sells
Offer non discounted items with discounted items. This can help you get rid of old inventory while still making profit.
6. Convert new customers to repeat customers
This can justify higher customer acquisition costs by increasing the lifetime value of each customer.
7. Maximize your margins during a new customs first order
Usually, new customers are offered the highest discount. This is done so that the customer will be attracted to buying other related items that are not discounted.
8. Reduce online shopping cart abandonment
People usually feel better about checking out when they are able to use a discount code. They don’t feel bad for spending because they are essentially saving money from their purchase.
For discounts to pay off, and not affect your business negatively, you need to practice these strategic approaches. By knowing your goals and matching it with the right type of pricing discount, you can avoid the common challenges that come with discounting and instead bring in more sales and revenue.
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