At the end of last year, the company rolled out the Lyko Creator feature, where users receive financial compensation based on how many people interact with their uploaded content.
Now, the company has chosen to expand this initiative internally. In a post on LinkedIn, CEO Rickard Lyko announced that the company is now also beginning to compensate its own staff for content they publish in the app, even when this is done outside of regular working hours.
We are starting to pay our own staff for the content they post on the Lyko App even when it happens in their free time, says Rickard Lyko and continues:
This is not a campaign, it is a shift.
The CEO describes the change as part of a more long-term strategy and points to the importance of human presence in the digital business.
We believe that the future of e-commerce is built by people, not just products.
Compensation Per View
The internal model is based on the same premise as for external creators, meaning that the compensation is not linked to direct sales. Instead, it is the number of views that generates revenue for the sender.
Previous reports show that the compensation level is 20 kronor per 1000 views, a structure which in turn is financed by brands that buy advertising space in the app's feed.
The platform as a whole currently handles around 500 posts per day from its connected creators, resulting in millions of views each week.
To maintain clarity towards consumers, the company states that all posts from staff are marked, and it is clearly stated when it comes to paid content.
Industry Reacts
The initiative has quickly become a talking point among e-commerce profiles and marketers. On LinkedIn, the decision is commented on from perspectives such as credibility and value creation.
Several players point out that recommendations from staff often carry weight with consumers, as employees possess a great deal of product knowledge. At the same time, questions are raised about how the strategy will be received by the customer in the longer term. There is also discussion about the experience of authenticity when the content is produced by an employee who is paid per view, and whether the format affects the credibility of the recipient.
Reduced Marketing Costs
The investment in content in its own channel is a central part of the company's digital work. Currently, the company's app accounts for 30 percent of total sales.
The goal of building a community is to shift the focus from traditional marketing and build a platform where customers, content and brand meet. In the long run, the hope is that this will reduce the need for purchased advertising externally and retain traffic within its own ecosystem.
Of course, in the long run we want to have to spend less on marketing so that people come directly through us, says Rickard Lyko in a previous statement.