Rewarding Loyalty in Revenue Based Finance

Everyone’s heard the pitch that if a deal goes well there could be better terms on the next one, but how much better are we talking about precisely? Well, after conducting an internal study, Pennsylvania-based Funding Metrics decided to actually codify incentives for success into a fully fledged loyalty rewards program that enables merchants to get a precise factor rate reduction, origination fee discount, and additional estimated remittances on subsequent advances.

“Early 2023 we took a deep dive into our customer experience and how it directly correlated to merchant retention,” said Melissa Flagg, Vice President of Operations for Funding Metrics. “We listened to the pain points our ISOs shared, with customer retention always driving the conversation. Most ISOs we spoke with seemed to face similar retention challenges and were coming up short with solutions.”

The challenge is that merchants tend to shop around on subsequent deals even if they are happy with what they got the first time. The loyalty program was the eventual outcome of what they learned and it’s open to merchants funded by Lendini and Quick Fix Capital. As Flagg tells it, there are three ways for merchants to accrue points. First, points simply for opting in, which they must do in order to take advantage of it. Second, additional points for each 1% they remit toward the purchased amount, and third, points for each renewal. There are six total milestones that range from Bronze Level to Diamond+ Level. While the tiers, conditions, and corresponding discounts are published right on their website, merchants can easily track their points through the Funding Metrics mobile app.

As seen on the Lendini website as of posting time

“There’s no need for a redemption email or request,” said Flagg. “Points don’t deduct, they continually accrue as long as merchants continue to remit, and discounts automatically associated with the loyalty level apply on their next offer.”

She added that it’s quickly been recognized as a great way to incentivize a merchant not to shop around. It’s also been used to secure a renewal or win back an old customer that had left. This logically helps the ISOs involved.

Most readers are already familiar with the Lendini brand through their constant mix of on- and offline marketing. Members of their team usually show up in large numbers at major industry events, for example. Flagg said that 2024 has been a big year for the company. “In Q2, we successfully launched Instant Offers, and we’re proud to report that we’re now averaging a turnaround time of under 5 minutes for offers up to $75,000,” she said. Their new mobile app, while still in beta, allows merchants to track offers, remittances, and engage with the Resolutions Team.

“Over the past two years, we’ve prioritized elevating the customer experience by creating accessible tools that empower merchants to navigate the financing process with ease and transparency,” Flagg said. “This is only the beginning. Funding Metrics is dedicated to continuously enhancing these experiences that put merchants in greater control of their business financing and making every step from offer to origination as seamless as possible.”

eBay: ‘We’ve Already Done $40M in MCAs’

eBay is coming in hot to the small business financing game. The company reported that it had connected merchants with $100M in funding YTD, over $40M of it being “business cash advances” through Liberis alone.

Liberis is a UK-based company that expanded into North America 4 years ago. It secured $112M in debt funding last year. The partnership between Liberis and eBay only started this past July. eBay’s other big funding partner is Funding Circle.

eBay’s role as a facilitator for funding follows what every other major e-commerce platform is doing. For example, Amazon, Shopify, Walmart, Lightspeed, and DoorDash all offer funding to sellers on their platforms. Technically, eBay was the first considering it had originally partnered up with Kabbage back in 2010. That relationship did not last, however.