Ebates’ Membership Growth Helps Revenue Jump in August

September 16, 2010 · 0 comments

On Monday, an Ebates.com press release revealed the results of some of Ebates‘ in-house research on online shopping. Their findings were that:

  • In August, Ebates members’ average order size dropped by 10% compared to August of last year.
  • The average member spent 5% less in total this August versus last August. (So the smaller order size was somewhat offset by the fact that members placed more orders.)
  • It would’ve been worse for Ebates, but they’ve been aggressively recruiting new members to their program. So although per-member spending was down in August (compared to last August), TOTAL spending in August was up by 45%. That’s a heckuva lot of new members brought into the program… 61% if I’m doing my math right.

The press release went on to say that the first half of 2010 actually saw an average member spending 10 to 15% MORE than the same period last year. Why did average spending drop so much in August? No idea, but Ebates is hopeful that with the traditionally profitable fourth quarter starting in just two weeks, the company will finish the year strong, with annual total spending up by 50%.
Not that hard to do if you recruit 60% more members and they’re at least or more active than the ones you had before.

A couple of observations:

1. Greater shopping revenue doesn’t necessarily equal greater profitability…or profitability at all. (Although I hope in Ebates’ case it does…I really like their program.)
And 2. Bringing in massive numbers of new, active members — and word has it that this is Ebates’ approach, not just with their increased promotion of their Refer a Friend program but also through affiliate marketing channels — is one way to bring in more revenue. But what about better servicing their existing membership base? What’s being done to assess and better meet their needs, to get them more active in the program?
What I like about Ebates: they’re reliable, their customer service is top-notch, their site is easy to navigate, and their sheer size allows them the negotiating position to be able to work out increased rates for their merchants on an everyday basis as well as with their Daily Double merchant and occasional week-long promos (for instance, this week is “Fashion Week,” with big cashback increases on stores like Gap, Victoria’s Secret, Saks, and Nordstrom). They provide an up-to-date coupon database, their blog is nice, and they have the requisite presence on social networking sites like Facebook and Twitter.

But Ebates today doesn’t look much different than Ebates of two years ago…or five years ago.

What’s on my wish list, as a long-time Ebates member?
I like the product price comparison tool that Extrabux has. Help me find the specific product I want to buy at the cheapest price, factoring in coupons and cashback. That would be hugely beneficial to me, personally. I’ll buy at a merchant with a lower cashback rate if my overall cost of the product I want is lower. Give me get the information I need to decide.
I like the option to receive email updates of new coupons and deals at my favorite stores, which both MrRebates and Upromise offer. I have charge cards at Kohls, Sears, JCPenney, and Dillards, so I’m more likely to shop at those stores but even MORE likely if you email me when they’ve got a big sale going on or a new coupon code out.

I like the no minimum payout requirement for PayPal cashouts that QuickRewards.net and FatWallet offer.
I can understand a necessity for a $5 minimum in your account to have a Big Fat Check cut, but for PayPal payments, why is there a minimum? Makes no sense to me.
In closing, my recommendation not only to Ebates but to all of the online shopping rewards programs out there: growing your membership is good, but keeping your existing members engaged is pretty important, too. And there’s no additional cost of acquisition required. How do you do it? Communicate. Innovate. Personalize. Think like a consumer. We’re time-crunched and we want you to spoon-feed us the best deals on items WE want, at stores WE like. Make it easy for us, and we’ll come back to you again and again.

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