Setting up a Cashback website?

There has been an interesting debate that if the cashback website model is the most lucrative for affiliates and how can it be setup with minimal effort. I am personally convinced that the cashback website could work more effectively than other models in affiliate marketing but require a good understanding of the affiliate industry from affiliate and merchant perspectives and also involve a lot of effort and resources to setup, maintain and promote it effectively. Quidco, Greasy Palm, The Mutual, Rpoints and several others offer some sort of bounty to the end customer which makes it an appealing proposition for consumers.

These are some of the important factors you should consider before start thinking about setting up a cashback website. I though it would be useful to share them with you as I ignored a couple of them when I began working on Guide 4 Shopping, which took us longer than expected to accomplish the project from scratch.

Segmentation, Targeting and Positioning
These three factors are important for you to understand which consumer segment(s) would you be targeting and how would you position your website and marketing strategies to attract and convert users more effectively. If you are not sure who, how and when to target then I would suggest reading some material on understanding online consumer behaviour and how to drive traffic on your website.

Tip: If you do not understand how will you promote the website, how will you target the users and do not have necessary skills to drive traffic from online campaigns then please do not read further. I would suggest you reading topics on SEO, PPC, Email Marketing, Affiliate Marketing, Online PR and consumers. Some of my favourite resources are found on eConsultancy reports.

Technical Abilities
If you are through to the first step then you need to ask yourself is if you are technically capable to design the entire project on your own? Cashback website require advance development and coding techniques to track sales for each customers, storing data for each click and sale and offering ability to customers to login, view and track the cashbacks and much more.

Do not ignore accessibility and usability of your cashback website. You can not simply drag users from Google Adwords and expect them to convert for you. It requires detailed analysis of how your website design would drive the users on the website?

Tip: Consider outsourcing the entire project to other companies or individuals. IMG offers cashback design and help on cashback websites in UK, USA, Australia & Netherlands.

Copy Writing Skills
Do not neglect quality contents, considered as the King of a good website. A good editorial for each retailer is a key which can convince the user to make a click on your fortune cookie banner or link.

Tip: Quality contents can enhance your SEO rankings.

Admin, Admin & Admin
Are you able to view sales, add them manually or dynamically on the website, change the status of the cashback for users to view, reply to customer queries, keep an eye on latest offers etc. cashback websites requires huge amount of administration that could be adding daily cashback, maintaining data from networks and providing effective customer services.

Tracking in Detail
Tracking is an integral part of the cashback website. You can obtain assistance from the affiliate networks in setting up tracking parameters. The tracking could be implemented in several ways and some networks now provide APIs that are useful to automate mainly cashback tracking but requires good understanding of web services.

Tip: Ask each network how to pass on additional elements in the tracking tags.

Security, Privacy and Trust
It is often ignored but I consider it very important. Most of the cashback websites do not offer secure login. Ask yourself if you can comply with the privacy and trust agreements? These options may cost you money but definitely increases consumer confidence in your service.

Interactivity
This is an interesting factor for me as I would like to view higher degree of interactivity on cashback websites. Just a few of them offers the ability to comment on the services and merchants. It would be interesting to view message boards, cashback calculators, viral marketing, wish lists, blogs, Forums, testimonials, reviews etc to engage and creating interests in the service.

Revenue Model
Do you have a revenue model? You need to be very clear how would you generate revenue after paying the fixed and variable costs? It would be useful to list down the total cost involved and create a revenue projection sheet for at least one year. Some of the costs you are most likely to encounter are as follow.

- Cashback (what share are you offering to your customers)
- Signup bonus (do you intend to offer signup bonus?)
- Referral bonus (do you have a referral scheme?)
- Hosting and SSL cost
- Website development and maintenance cost
- Data entry and update costs if you outsource
- Marketing cost each month
Now you can add other costs i.e time, resources, office bills and then workout your yearly budget, costs and revenue.

Competition
Do you know who are you competing with in the industry? It is imperative that you are aware of competitor moves and strategies in advance. Quidco, Rpoints, Greasy Palm etc have extensive investment, resources and customer base to retain and excel in the market. Can you target your niche audience with your set budget? I leave that question for you to think based on your skills and resources.

Affiliate Networks and Merchants
If you are already working with the affiliate networks then it’s a bonus for you as it will not require a lot of training and you will only have to adjust the links to make sure they are compatible with your cashback model. It is valuable to analyse if you would be promoting specific merchants or simply adding all the merchants available on the affiliate networks? You need to identify which merchants convert better for you and initially concentrate on them if you are working on limited resources.

These are some important factors I have encountered but in summary if you do not understand them then scrap your idea of setting up a cashback website on your own.

Tip: IMG offers cashback white label solution with fully customised and automated options. The aim of the solution is to provide you an effective platform, tools, data and management so you can simply concentrate on promoting the website.

Good Luck!

• Affiliate Marketing For Online Merchants