A consumer rebate program is a time-tested strategy to entice new customers to your brand and to throw a bone to current and repeat customers. They’re one of the options that many brands turn to if they are looking for a boost in revenue or a chance to break into a new market. However, for a consumer rebate program to accomplish your goals, the rebate process needs to be executed well.

This is more important than ever before; rebate fans discuss the pros and cons of different brands’ rebates online. A consumer rebate program that is poorly administered or that fails to live up to expectations in other ways can either sink without a trace or even bring negative attention to your brand. Our guide to the rebate process can help you avoid the most common pitfalls and set up a consumer rebate program that helps you accomplish or exceed your goals.

 

Why Do Companies Offer Rebates?

 

Why Set Up a Consumer Rebate Program?

There are a number of goals that can be accomplished with the right consumer rebate program. Among the reasons that B2C businesses consider adding a rebate to the mix are:

  • To enjoy an immediate boost in sales.

Many individuals who might be on the fence about a purchase may decide that a rebate reduces their risk and makes them more likely to take the plunge. One in four people who responded to a different survey said that nearly any product or brand that offered an attractive rebate had a chance of winding up in their shopping carts.

  • To reach a new market.

If you’ve been having trouble getting traction with a desirable demographic, offering a rebate may be an effective approach. The survey above also revealed that 60% of Millennials, for instance, were open to switching brands in order to get access to a rebate.

  • To increase your market share.

Contemporary shoppers are far less brand loyal than ones in the past. Creating a consumer rebate program may be a chance to lure a competitor’s customer from their brand to yours.

  • To turn over inventory.

Have items that are not moving at the speed that you would like? The right rebate process can help you find buyers so that you can focus on new products.

  • To introduce a new product.

Whether you are a new brand or you are adding a new product to your line, there are a lot of reasons that you do not want to wait for customers to become aware of your products and make the decision to buy. A consumer rebate program can give a needed bounce to increase sales right away and give you the momentum you need.

  • Gain valuable consumer data.

If you are a manufacturer who supplies your product to retailers, it is often difficult to find out any demographic information about the people who are buying your products. A consumer rebate program can be a great way to get information directly from the end user so that you can better tailor the products to fit their needs.

Deciding on the Specifics of Your Rebate Process

Among the first decisions you’ll have to make is the amount of your rebate, the type of offer you’d like to make and how long the promotion will go on.

Fixed value or escalating?

Are you going to offer a simple Get $X of Product Y? Or, will you offer a rebate that gets larger along with the customer’s purchase? For instance, a hair care company may offer $3 to a customer who buys $10 worth of product but gradually bump the deal up to an offer of $10 off a purchase of $50 or more. Escalating deals are a great fit for items that have a lot of complimentary items that are ripe for cross or upselling.

How long will your program run?

As a rule of thumb, you should typically allow a program to run no longer than three months. This gives customers enough time to make their purchase and submit their materials. A duration that is too short may make it harder for people to act before the promotion expires, which can lead to ill will toward your brand. You should also ensure that your program is long enough to adhere to state laws where you do business; many states require minimum durations.

What redemption options will you offer?

The traditional option involves paper rebate forms that are mailed in along with proof of purchase, and checks that are sent in return. While this can be the simplest rebate process to set up, it can be the most labor-intensive to administer.

Online automated systems may require more set up in the beginning, but are far easier to administer through the length of your consumer rebate program. Third-party rebated administration services can do all the work for you so there is nothing to set up. These systems can be far more friendly for the customer, as well.

How will you pay out?

Checks are the traditional way to pay customers for their rebate. However, modern options can include prepaid rebate cards or gift cards for your brand. A gift card can be an especially appealing offer for both your brand and your customer: adding a small bonus to customers who take their rebate as a gift card allows you to provide a perk. And, the gift card means that your customer will be bringing the cash that you give them back to your brand.

Simplicity is the Key to Success

Many companies opt for complicated rebate offers with long forms and arcane requirements. The reasoning here is that they introduce higher levels of “breakage;” that is, people who make the purchase, but never submit their rebate forms for redemption.

While this can result in a bump in sales, it can also backfire on you. A customer who has made a purchase from you but has not received an expected rebate in return may have a less friendly feeling toward your brand. This may dissuade them from purchasing from you again in the future. When you consider the superior value of a long-term customer, it makes sense to make a program geared toward retention.

Working with an outside rebate company can often be the key to an easy and effective rebate process. You get the sales bump and the data you need while the business’s expertise guides you toward a program that is easy for both you and your customers.

Top Tips for a Successful Program

A consumer rebate program is only as successful as it is well-planned. When you are establishing your rebate process, ensure that it checks off all the marks below:

  • Clearly define your goals.

You can’t track the success of any marketing effort unless you know what you are looking for. Are you trying to increase revenue? Engage a new set of prospects? Increase your market share? Know what you want so that you can measure your success.

  • Make a compelling offer.

To ensure that your consumer rebate program has the desired effect, you need to make sure that the offer is one that your current and potential customers will find enticing. A $5 savings on a $400 won’t turn many heads. However, $50 off $400 may be enough to make someone who was on the fence before jump in and make a purchase.

  • Keep the rules simple and clear.

If the requirements for customers to get the rebate are complicated and confusing, you may wind up breeding ill will. Ensure that it is clear what products are involved, which dates and how a customer can redeem their rebate.

  • Give your customers access to a simple redemption system.

If you are managing the consumer rebate process in-house, ensure that your customers have a simple way to submit rebates and that you can process them quickly and efficiently. An outside system from a dedicated provider may offer a better return on your investment than moving in-house employees to the task.

  • Communicate the program to stakeholders.

Whether they are employees or a third-party, make sure that everyone understands how the program works. All employees involved should know when the promotion is going on and what qualifies a customer for cash back.

  • Market the consumer rebate program to customers.

Your consumer rebate program will not have the desired effect if no one knows about it. Consider how you are going to spread the word so that potential customers can include your rebate in their buying decision. If your product is marketed in brick and mortar stores, changes to your packaging to draw attention to the rebate form can be useful. If you are an e-commerce business, make your rebate the subject of a customer marketing email or include it in your PPC advertising.

  • Collect data and measure your success.

Rebates have the advantage of allowing you to learn exactly how many people purchased your product as a result of your promotion and then sent in for a rebate. In most cases, you will have at least geographic information about the people who purchase. Use this information to craft future offers and increase your marketing effectiveness.

A Successful Program

A properly executed consumer rebate program can augment your business in a way that doesn’t require too much time or money. By keeping all of the above in mind when creating your rebate process, you can avoid the most common pitfalls and ensure that your consumer rebate program pays off.

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