Cashback sites bring greater transparency for consumers
February 28, 2008
I recently came across two examples of what Trendwatching.com describes as 'brand butlers': ad initiatives that turn their back on traditional push communications and instead curry favour with consumers by focusing on making their lives more convenient.
The first, from Wrangler jeans, allowed revellers at a music festival to drop off their dirty clothes to be washed for free. It sent them a text when the washing was done and even provided overalls for those without a change of clothes. The second was from toilet tissue brand Charmin, which has opened free deluxe restroom facilities where people need them most, such as busy shopping centres.
These examples say a lot about how the dynamic between consumers and brands is changing in the 21st century. It's no secret that people are increasingly irritated by traditional advertising and that brands need to find new ways to interact with their customers. But people are also far more aware of how marketing works and even, in some cases, the flows of money involved. This suggests a need for marketers to consider the commercial transaction as well as the emotional transaction in which they expect their patrons to participate.
One manifestation of this trend online is the growing popularity of community sites that allow people to earn as they shop by receiving a percentage of the money they spend as a cashback payment. These typically range from 3% to 15% of the purchase price and are made possible because the community owner passes back to the customer part of the affiliate commission they earn for referring that customer to a merchant.
Quidco gives its members 100% of the money it earns for referring customers to online retailers and, in exchange, they give us £5 out of their earnings once a year. The cashback we're now generating is no small sum: we returned more than £2.7m to consumers over the last Christmas period alone.
Such sites are disrupting established ways of thinking, and some retailers and their media agencies are finding it difficult to get their heads around this emerging model. Traditionally, affiliate marketing has been a process hidden from the vast majority of consumers. Cashback sites lay it bare. That can be a scary prospect for marketers more used to pushing messages than cooperating with consumers. Indeed, on a few occasions we've had to end partnerships with merchants, despite them receiving enormous boosts in traffic, due to their lack of experience with this model and speculated effect on their brand.
To me, this is a short-sighted reaction. The way people interact with brands has changed forever. Just as in the offline world 'brand butlering' is a progressive way of reaching out to sceptical consumers, so in the online world savvy consumers are increasingly seeking transparency in their communications with online retailers. Cashback sites should be good news for all involved - consumers get a great deal and merchants gain important new loyal customers through this transparent dialogue.
It may be a brave new world of marketing, but if brands fail to grasp the changing way in which consumers view the entire advertising process, they risk missing out on significant revenues.
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