Marketing Viewpoint by Ruth Winett
Eight Critical Lessons Learned from the Gig Economy
Made popular by Uber and Airbnb, the gig economy is an old segment of the economy with a new name. If you have engaged business consultants, plumbers or tree surgeons, you have participated in the gig or on demandÂ economy. Your business may offer on demand services. In the gig economy customers rent service providers for single engagements. Using the Internet, customers identify vendors who can help them solve their particular problems. Many then place orders online, often without interacting with sales people or customer service representatives.
In 2014 one out of three Americans freelanced, as reported in Upwork's 2015 Freelancing in America research. By 2020, an estimated 40 percent of American workers will be independent contractors.
The growing popularity of demand services reflects the tectonic change in what customers seek from providers of goods and services and how customers make purchase decisions. Whether you are a traditional vendor or a vendor in the gig economy, you must be responsive to customers' new demands and new ways of doing business.
Exploit digital resources. Customers are prepared to make quicker purchase decisions unaided. Use websites and social media to provide customers with detailed information on your offerings so they can self-educate and - if appropriate - make online purchases. Include compelling examples, case studies, and customer reviews to speed up decision-making. Your staff will then need to spend less time educating customers.
Communicate clearly and in everyday language. Cataract patients who want to know if Medicare covers prescriptions for glasses following surgery must click on the "prosthetic lenses" link-if they can even find the link. Impatient purchasers will give up and call the 800 number, which annoys patients and adds to Medicare costs.
Be more flexible. In a gig economy, customers want to be able to choose what, when, and where they will purchase. If you want a taxi at 5 AM or earlier, Uber will oblige, unlike some taxi companies. Buyers want more convenience.
Package goods and services in smaller chunks to serve people who only want to pay for the features and functions they need. A financial planner could offer a one-time review of a client's finances, as well as longer-term retainer services.
Be responsive to customers' growing price sensitivity. When people use Airbnb to rent apartments, they pay a modest three percent fee, in contrast with a 11.25% room tax charged by Massachusetts hotels and an approximately 15% tax for New York City hotel rooms. Airbnb customers don't want to subsidize hotel restaurants and fitness centers.
Develop a direct to customer strategy by eliminating distributors and middlemen whenever possible. Most people now book trips directly with airlines and tour companies or through discount services, such as TripAdvisor, not through travel agents.
Simplify the purchase process. Gig economy customers want purchasing to be as easy as possible and will leave if they experience delays. Eliminate hurdles in the purchase process, e.g., complicated forms to fill out.
Offer short-term options. In the gig economy, loyalty gives way to convenience. Customers may be perfectly satisfied with your services but may explore more convenient alternatives next time and not re-order blindly.
To prosper in the gig economy, your company must keep up with the times. Give more control to customers or clients by tailoring your offerings. Make it as easy as possible for customers to select your business. Change or eliminate practices that make it hard for customers-in-a-hurry to choose your business to fulfill their needs. Review your website and ads as if you were a potential purchaser, and make changes that address customers' changing expectations. Finally, if you benefit from any of the changes suggested above, pass on some of the savings to your customers.
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