This month, our Attest On-air webinar spoke about ‘how to build a marketplace brand…’
We were joined by two marketplace experts (Simon Goble from DogBuddy and Riya Grover from Feedr) who shared their wisdom, insight and expertise. Simon and Riya have both successfully scaled marketplace businesses, which (due to their efforts) have since gone on to become popular brands within their respective markets.
The marketplace model is one of the most complex and difficult business models to get right. But if you execute it correctly, the effort is absolutely worth it, as marketplace brands can become huge, profitable household names. Just look at some of the leading marketplaces out there, such as Uber, Airbnb, Eventbrite, Ebay and Spotify.
Other iconic names such as Amazon and ASOS have introduced marketplace features in recent years.
Following on from the discussion we had with Riya and Simon, here are 10 things you can do to increase your chances of turning your marketplace dreams into reality:
Solve A Genuine Problem That Exists (And Needs Solving)
It’s all well and good launching a marketplace brand, but what problem is your service solving?
For example, DogBuddy provides a service that can’t be achieved without using their platform, unless great amounts of time are invested. And let’s face it. Time is of the essence in this day and age!
As a core feature of their dog sitting service, DogBuddy offer pet insurance, and vet each dog sitter extensively which creates a level of safety that is difficult to achieve by yourself. Their app makes it quick and easy for you to book a trusted dog sitter without the added time and effort.
They’ve created a sense of speed and convenience that normally wouldn’t be possible, and let’s not forget about the safety element, too.
If you’re providing a service that can be easily achieved elsewhere, then it may be time to get back to the drawing board.
Beat The Conventional Services: Be Better And Add Value
Uber disrupted the taxi industry, because they reduced waiting times, introduced easy-to-use technology with real time taxi tracking (perfect for people with itchy feet).
Because of the volume of bookings they take globally, they’re also able to offer a competitive price, and through their app, booking is instant, eradicating phone calls and long waiting times. They have tapped into taxi user’s biggest frustrations and solved a well-known problem and need.
Clearly, what they’re offering is better than most conventional taxi firms, and that is why they have succeeded.
Does your marketplace beat conventional services? If not, how can you make it do so?
‘Go And Speak To Both Sides Of The Marketplace…’ Simon Goble
Before you even embark on the rollercoaster ride that is launching a marketplace brand, be sure you speak to your potential customers and potential suppliers, first. Find out what suppliers will want and need from you, and find out what potential customers will want, because this information will help you to refine your overall marketplace model, increase retention rates, and sales.
Often the difficulty with building a marketplace isn’t in finding consumer demand, but it’s about changing the way suppliers work. So don’t just assume that they’ll be happy to join your marketplace.
Another thing to consider is that marketplaces typically charge a very low fee or percentage of each transaction, so how big is the potential market? The model will only work if the market is large, with a high volume of sales coming in.
If you’re at this research phase, get in touch and see how Attest can help you figure out demand, and know what people want!
Nail Your Logistics And Service Delivery
If your intention is to build a high volume marketplace like Uber, how are you going to facilitate such a large amount of orders, and run such a complex infrastructure? Lots of businesses fall short on the delivery side, so make sure you nail your logistics and service delivery strategy, otherwise you might just slip up.
Spend time mapping out how you’re going to build a high volume marketplace business, and scale it up over the long term without having a heart attack.
‘There Is No Silver Bullet…’ Riya Grover
Acquiring new suppliers, acquiring new customers, and maintaining a strong equilibrium requires different mechanics for each marketplace, as each service is different, and each target audience is different, but always onboard suppliers first, because without having that initial service to sell, you won’t make any sales when you first launch.
In the early days, suppliers might be frustrated at the lack of sales, but assure them that if they are patient, there’ll be big potential in the future, with lots of sales to look forward to. If you do happen to secure any ‘power suppliers’ (well-known brands), make sure you leverage them to win customers and build your brand alongside theirs.
Always be aware of the supply and demand dynamic, so you can recruit accordingly.
One way to ensure that you retain new customers is to make sure that your marketing and user experience is consistent across your campaigns, web, social, apps, and print.
Whilst in the early days, you might only have the resources to market to both buyers and suppliers during one campaign, when things pick up, or when the equilibrium goes out of sync, consider running split, dedicated campaigns to drive awareness in areas where you need it the most.
Manage Customer And Supplier Expectations In The Early Days
Be honest with customers and suppliers in the early days: ‘Look, we only have a few customers using the site right now, but hang in there, as we’re just about to clear a round of investment, which we’ll be spending on advertising, so be assured that you’ll receive more orders soon…’
And be aware of different types of users. Some suppliers might only use the site a few times a year to earn a bit of extra cash, whereas others may build entire businesses using your service. Learn how to alter the conversation and support based on different customer and supplier types, and use data (more on that later) to get that information.
Keep Standards High: Have A Vetting Process In Place
Ultimately, as a marketplace brand, it’s your responsibility to ensure that your suppliers are high quality, because if they’re not, your customers won’t hang around for long. Dogbuddy accept less than 20% of dog sitters that apply to become a supplier, and that is their way to ensure that their site delivers quality, always.
Feedr have also dropped suppliers in the past that haven’t met up to their expectations, and you should have a metric for doing the same, as the last thing you want is to have a customer backlash over a supplier that failed to deliver good product, or put a customer in a risky situation (for example, a dog going missing, or food poisoning). It’ll crush your brand.
You’ll have to define what high quality looks like, and build the parameters that sit within that. What does ‘not meeting standards’ look like? How will you know when suppliers aren’t up to scratch? These are all important things to think about if you want to create a platform that does what it says. For most marketplaces, reviews are often a vital mechanism to gain this feedback.
Regulate and track suppliers, and get rid of bad ones that aren’t getting good reviews or meeting standards, as you don’t want them ruining your brand, or being forced to close the doors…
Use Data To Refine Your Service And Scale
The great thing about having a successful marketplace brand is the data you can tap into to further empower your offering. Although transaction data will be inevitably sparse in the early days, eventually, you’ll be able to gauge a number of different metrics, such as:
- What are people ordering, and who is ordering it/them?
- When are they ordering them?
- What is their average spend?
- How long do they stay on the site for?
- What types of customer profiles use your service, and how does each profile differ?
- What else do they want that you can give them?
- And more
Use Personalisation And Customisation To Increase Value And Sales
Use that information to create personalised experiences for your users, because these days, people are being much more specific with what they want, how they want it, and when they want it (hence the success of other marketplace brands such as Treatwell). Feedr are investing a great deal of time into analysing the food their customers are ordering.
That way, they can get a good idea of what people like, and they can refine the options available, creating a better experience for customers, which will translate to better retention and more sales. Airbnb recently launched the ‘experiences’ section of their platform. Using data, what other services can you sell to your audience to add value and grow?
Numbers Mean Nothing If The Bookings Aren’t Coming In…
It’s true! You could have a million suppliers, but if they’re not selling anything, what does it matter? Quality over quantity. Your mission should be to focus on finding high quality suppliers and loyal customers that want and need the service, and this should be part of your initial research stage pre-launch, and as you go along.
Attest’s scalable intelligence platform will help you to find out who your potential customers are, who your suppliers should be, and what they really want, so you can focus on and building your brand with the right knowledge.
We work with many success marketplace brands including Dogbuddy, Treatwell, Urban Massage and Uber…
Get in touch to learn how we can help you scale yours!