The Loyalty Loop: How Embedded Finance is Reshaping Customer Engagement

Business funding is in high demand amongst SMBs. As a result, many are turning to multiple financial providers at once – a significant 33% rely on more than four. This reflects a clear need for accessible capital but also a desire for choice and flexibility. Dissatisfied with the traditional lending experience, these businesses are also demanding the same speed, convenience, and service they experience as consumers. This presents an exciting opportunity for platforms and payment providers that serve SMB customers.

Imagine your platform could not only acquire new customers by seamlessly integrating value-added financial services through embedded finance but also keep them loyal with a superior customer experience. Embedded finance answers the high demand for funding and delivers the critical experience SMBs seek. By providing this integrated, customer-centric approach, you complete the loyalty loop, turning acquisition into long-term retention.

It can feel like an uphill battle to retain SMBs that visit your platform in a competitive modern marketplace where choice, convenience, and relationships rule.

Relying solely on your core offering to stand out from the crowd isn’t enough. SMBs refuse to be taken for granted and demand value-added services built into their online journey for a smooth, seamless, tailored experience that complements your product or service.

Rather than standing still, it’s time to pique their interest by diversifying. Embedded finance augments your platform by integrating a value-added service that gives SMBs what they want: a faster, simpler, and frictionless funding experience that’s tailored to their needs.

Loyalty is underpinned by trust, which must be earned – especially when it comes to managing an SMB’s finances. Embedded finance creates trust through experience, addressing SMB pain points like rigorous, time-consuming applications, fragmented processes, and rigid financial products. By streamlining these processes and offering seamless, integrated financial solutions, embedded finance directly contributes to a more positive customer experience. This positive experience enables increased loyalty among SMBs. We've consistently observed that when SMBs have a positive customer experience, they are significantly more willing to remain loyal, as evidenced by average funding renewal rates of 62.9% and our highest-value deals taking place with repeat customers. This demonstrates the tangible impact of simplifying financial access and building stronger, lasting relationships with SMB clients.

Vagaro’s partnership with Liberis emphasizes how working with an embedded finance provider can supercharge customer satisfaction. This comprehensive platform for salon and spa professionals teamed up with Liberis to integrate a funding service that aligned with their customers’ goals – and the results are compelling: Vagaro retains 99%+ of funded customers and partners.

Let’s explore three standout strategies for success that embedded finance excels at:

1. Tailored financial solutions

Generic one-size-fits-all financial products often miss SMBs' unique needs. Integrated funding uses data to offer tailored options, building loyalty with brands that understand them.

2. Seamless integration into platforms

Embedded finance simplifies funding by integrating financial services into familiar platforms like e-commerce. Because it's embedded within the partner's brand, the experience is frictionless. Users bypass slow bank processes, benefiting from data-driven credit checks, instant financing, and flexible payments, all without ever leaving the branded environment they are already familiar with.

eBay partnered with Liberis to create Business Cash Advance, a revenue-based financing product that supports sellers at every business stage. A seamless application experience and extensive financing options enable eligible US eBay sellers to access up to $1 million in working capital in as little as 24 hours.

3. Expanding embedded finance into ecosystems

Embedded finance must evolve to meet SMBs' demand for broader financial products. Expanding into cards and accounts, for example, strengthens relationships and boosts lifetime value. Co-branded cards enhance engagement, while deposit accounts deepen financial ties.

Data is the lifeblood of modern businesses. When transformed from its raw form into actionable insights, this rich resource can drive innovation, growth, and competitive advantage. Supporting growth-oriented businesses requires more than just traditional lending. Embedded finance brings this to life by leveraging powerful AI algorithms that harness conventional data sources, providing offers based on growth forecasting. This means businesses can access tailored financial solutions, driven by intelligent predictions, rather than relying solely on historical data.

Real-time analysis of vast datasets unveils the customer insights your platform needs to recommend tailored financial products and services based on their browsing and buying history. This empowers you with the foresight to anticipate and give them what they want at the right time through the right channels.

The Liberis revenue-based funding model is powered by an intelligent data engine that accurately predicts business transaction revenues and makes personalized and pre-approved offers instantly. With 93% of businesses receiving their funding in less than 48 hours, our partners provide a data-driven, value-added service that breaks down barriers to funding.

Embedded lending’s alignment with modern SMB demands allows it to create a robust loyalty loop – from acquisition by promising a value-added, point-of-need service that puts them first to retention by delivering a frictionless lending experience that’s tailored to their needs.

With customers acquired, engaged, and retained by this customer-centric service, your platform can achieve long-term growth by maintaining SME loyalty.

Partner with Liberis and let customer engagement take care of itself. Contact us to discover how embedded lending unlocks a value-added service that deepens relationships and increases lifetime value.