Loyalty: The Gig Economy Way

When people in retail selling think about building loyalty, they naturally think about their customers. Points, perks, freebies — these are the tools used by savvy merchants that are trying to retain buyers by making the process rewarding above and beyond the purchase.

But for two-sided eCommerce marketplaces, which must attract both buyers and sellers, the loyalty equation is a bit more complicated — particularly as the eCommerce segment continues to explode and new, competing marketplaces fight for their piece of the action.

“It’s a real concern, not just for eCommerce platforms, but for all of these emergent digital marketplaces. Sellers, drivers, taskers — how do we keep these people around?” That was the question posed by Bill Crowley, chief product officer at Hyperwallet, during a recent PYMNTS.com interview.

“The gig economy has exploded over the last 10 years, and digital platforms are providing countless opportunities to earn an income independently. In the early days, competition amongst marketplaces was over consumers — attracting the demand for these products and services. Now, for a lot of marketplaces, the bigger challenge is keeping their supplier side engaged.”

Crowley provided an example of a car-share driver who keeps both the Lyft and Uber apps open at the same time, then follows business wherever the best rates and perks take him. The challenge for marketplaces and freelance economy companies is to develop programs that make their platforms more attractive and retentive than the competition.

“There is now a demand from marketplaces for the ability to integrate different types of loyalty tools within the platform,” Crowley explained. “The goal is to encourage workers to stick with one company rather than spreading their labor across multiple platforms.”

Hyperwallet is hoping to help its marketplace and gig economy clients offer those types of integrated loyalty and rewards products that, according to Crowley, “allow marketplaces to better incentivize their payees and increase brand awareness.”

With the launch of Hyperwallet’s new loyalty and rewards module, payees can browse and redeem reward offers from a number of providers from directly within the payout provider’s online portal.

“What we’ve done is integrate these loyalty offers and rewards into our product offering,” Crowley said. “Now those offers can be presented dynamically to the payees when they access our portal.”

Earned and Value-Added Rewards

Crowley noted that the first rule of building programs to attract and retain customers is acknowledging that different people find value in different kinds of loyalty offers. In designing this module for their partners, Hyperwallet found it was important to offer both earned and value-added rewards.

“For us, earned rewards mean incentivizing the payee to perform some desirable task or behavior with a reward offer,” Crowley explained. “For example, clients could incentivize payees to receive their funds on a branded prepaid card. The client gets the added brand exposure from increased card use, while the payee receives a gift card to use on travel or brand purchases.”

For some payees, that has a lot of appeal: It’s highly gamified and offers an unexpected bonus to their regular payment scheme. But Crowley notes that, rather than receive an unrelated reward, many payees are better incentivized by access to resources that can make the work they are doing more productive.

“Value-added rewards are about providing the tools that independent workers need to build their businesses, reduce day-to-day stress, improve personal marketing efforts, maximize earnings and so on.” To that end, Hyperwallet has partnered with companies like Intuit, LegalZoom and TelaMed Access to provide discounted subscriptions for a range of professional services, specifically curated to give workers and sellers the best chance at success.

Said Crowley: “With these services, the marketplace relationship becomes more than just another payment. Payees get the support they need to be comfortable and effective independent workers, and that strengthens their bond to the platform. It’s a major differentiator in a segment where individuals often don’t know the ins and outs of contract-based work.”

Different User Groups — And Effects

Value-added rewards, Crowley continued, appeal especially to payees who are actively building a small business and view their independent work as either a primary or important supplemental revenue stream.

“As contractors, these payees have to track their expenses and file taxes, so this is really an important part of their life,” Crowley said. “Many are accustomed to the support structure that comes with traditional employment and aren’t sure how to make a smooth transition.” More casual workers, on the other hand, might just be earning some extra spending money. According to Crowley, these individuals prefer earned rewards as the effects are immediately gratifying.

Still, it’s the former group — the long-term, career-oriented independent workers — that presents the greatest potential value to marketplaces. They need to be successful, and their desire to increase their own productivity and earnings means more activity and revenue for the marketplaces that host them. Hyperwallet is hoping to help its clients cater to that market through its recent extension into value-added rewards.

“This is really about helping them strengthen what they are doing and focus more on what they need to do,” Crowley said. “Selling through an eCommerce marketplace or delving into coding — or whatever it is these workers are doing as freelancers — they want to focus on that, and alleviate the day-to-day stress and friction that comes with running a small business.”

An Increasingly Competitive Field

There is huge competition in the eCommerce and gig economy markets these days, particularly between competitors who are offering services in similar segments. And as the stream of new independent workers continues to grow, finding better ways to attract and retain supply-side users is going to become increasingly important.

“A big part of that is helping people get paid faster — which is central to what Hyperwallet does — and layering in those other services and rewards that really fill out the experience and build connections between the independent workers and the marketplace,” Crowley explained. Hyperwallet wants to help its marketplace clients play the game better by making it possible to retain the best workers — even as the competition gets increasingly steep.