Michelle Wood

Why It's Hard To Build a Cashback Rewards Program In-House, Part 1

To improve customer lifetime value and drive better customer engagement, a cashback loyalty program may make sense for your user base. But before you take this ball and run with it, you need to consider all the moving parts behind these programs. 

At first blush, it may seem like a slam-dunk to strategically partner with relevant merchants and/or sites, and earn commissions from affiliate programs that you can turn into cashback rewards for your customers. But it can be a daunting task to build profitable individual relationships with merchants on your own, for a number of reasons.

In this two-part series, we’ll go through the aspects that make building your own cashback loyalty program in-house such a challenge, from both a technical as well as a business-side perspective.

In Part 1 below, we’ll cover the intricacies of building relationships with merchants.

Cashback rewards programs need merchants' participation.

One critical component of a successful cashback loyalty program is participation from a robust network of participating merchants, which increases the opportunities your customers have to earn cashback on their e-commerce purchases. 

So that means you need to build relationships with each of the merchants you’d like to feature, which means you’ll go through a lengthy process of:

  • finding the right contact at the merchant
  • meeting / talking with them
  • agreeing on terms
  • pushing live

and not to mention, with the correct tracking and attribution in place, for each of the merchants.  

Now, this is far easier said than done!

Newer cashback platforms and publishers can have trouble getting merchants’ attention.

If you’re just getting a cashback rewards program up and running, it can be difficult to get a large merchant or brand to pay attention or carve out time to get on a call to learn what you are about.

For one, affiliate managers at the retailers are very busy managing their own programs and they only have so much time to dedicate to establishing and building partnerships with every publisher. They tend to focus on the top-producing publishers and cashback platforms who are already driving results.

The affiliate marketing industry is tight-knit, with long standing relationships.

Another reason it’s hard to get merchants’ attention as a new cashback program or loyalty program provider is due to the strong network of talent in the affiliate marketing space.  Affiliate marketers and merchant development professionals alike tend to have long tenures within the industry regardless of what company they work for.

These professionals have worked tirelessly to build and grow the business relationships across many companies within the industry so that they can continue to find new ways to partner and do business in any role they have.  

Newcomers to the industry, trying to build a merchant network for a new cashback rewards initiative, will find it to be very time-consuming to build strong enough relationships with top merchants to make headway in a short amount of time.

Building an in-house merchant development team for your cashback rewards initiative is a challenge.

Given the previous point, it might seem like the obvious solution is to instead focus on building an in-house merchant development team to grow your cashback program’s proprietary list of retailers. But this, too, is costly and time-consuming - especially in this job market.  

Merchant business development professionals who know the industry, its idiosyncrasies, and its business models, and who have a deep Rolodex of contacts at the top companies in the space, are hard to find, and even harder to lure away from their current roles.  

How can you quickly increase participating merchants for your company’s cashback rewards program?

The list of reasons why it’s challenging to build your participating merchants list can seem daunting!

But there are ways you can short-circuit the process of manually securing the merchants who can provide e-commerce cashback rewards to your customer loyalty program. 

  • Work with a white-label loyalty and rewards platform that has an already-established merchant development team and a merchant portfolio that you can quickly and easily tap into.  By leveraging their experience and existing relationships, the merchant development team at an established cashback and rewards platform can better represent your cashback program and the benefits of working with your program. Plus, there is added strength in numbers. You can more easily get merchants’ attention, when you are part of a larger publisher network driving more combined traffic and sales.
  • Have a developed media kit that describes your cashback platform, discusses its benefits, and provides more details about your audience size and demographics to better help merchants determine the opportunity from working with you.  You should always craft materials which emphasize exactly how your cashback program will benefit the merchants who are looking to grow their affiliate marketing program.  
  • Work with an affiliate network or agency with account managers who can represent your brand to relevant merchants.  By leveraging the experience and connections with merchants, an affiliate network account manager can help make introductions to merchants that you may otherwise not get to connect with through your own outreach.

And for the other side of cashback programs, are you ready to learn about the challenges with data wrangling and attribution? Read Part 2 of this series which covers the approach Wildfire takes to cashback rewards data management.

Meanwhile, to learn how you can work with Wildfire to tap into our massive network of over 50,000 merchant programs for your cashback rewards offering, contact me for a meeting to discuss how Wildfire can help you. 

OctoShop Case Study


Published by Michelle Wood March 9, 2022
Michelle Wood