Marketplace platforms have become the new way of business and many are riding the wave. With investments anywhere from hundreds of thousands to millions of dollars, it is quite an expensive business to run. Whether you are an entrepreneur looking to launch your first business or an enterprise company conducting a side project, you will face the task of keeping users on your platform. In an attempt to recoup your investment and stay profitable, marketplace owners must find ways to keep users on the platform and remove any potential side deals that may be occurring. Here are some of the best practices we have learned through our research and journey to help you as a marketplace owner succeed.
How It Affects Marketplaces
It’s no secret that users join marketplace platforms and take the business on the side, away from the platform. Why do people do this? It cuts out the middleman (the marketplace). No need to pay the percentage cuts that marketplace take from the final transaction: whether it be 5 or 10%. It may not sound like a lot but for those marketplace owners, it’s what keeps the business running.
Let’s take a minute to break down the issues of the overall effect. For marketplace owners, this is their baby. They invest all their blood, sweat, and tears to ensure success comes in any way possible. That may be by raising transaction prices, charging for exclusive features, or even membership fees. Whatever the case may be, they are looking to recoup any costs that may have come out of pocket or through their investors.
You may think of what’s losing one customer going to do? Eventually, it could put the marketplace out of business as the word can spread and gig workers start to run through their own network to gain work. Without marketplaces getting their piece of the pie, money will be lost. It’s a lose-lose situation for everyone. Gig workers obtain a short gain by getting a bigger piece of the pie but lose the network in the long run. Once the marketplace shuts down, buyers, sellers, guest and hosts, clients and service providers all are out luck now. Users on the platform must think of the bigger picture and how their actions can change it all.
Understanding Why Clients Leave The Marketplace
As your marketplace gains traction and popularity, try not to get too excited as you gain new users. There will be many who sign up to give it a shot and some will continue to use it, while others you may never hear from again. The biggest thing you need to find out is why and where are those users going. Did they not find the jobs they were looking for or are they not happy with the platform? Whatever the answer may be, you must do your best to get an answer.
Some may head to your competitors as they take a smaller percentage cut, have a friendlier user interface, more job opportunities on other platforms, or it simply was not for them. Your worse fear is users taking their clients of the platform and communicating directly via phone or personal email accounts. This creates a more efficient process for users as they can simply reply via text message rather than having to log into the marketplace and reply through the platform.
There will always be something bigger and better that is created. It’s important your marketplace does not get complacent. Always look for ways to improve and provide value to your users. If no value is present, users will leave the platform. Always look to answer, what is in it for the user? How can they gain value from using your platform? Whether that be with knowledge or come in a dollar value.
Keeping Buyers And Sellers On The Platform
In a perfect world, your marketplace would be able to keep all of its existing users while keeping a steady growth rate without any drop-offs. Let’s be honest with ourselves as buyers and sellers will come and go. A number of factors may contribute to that but there are some things you can do to minimize it. Here is a list we have compiled through our marketplace platform experience in an attempt to keep them on the platform.
- Friendly User Interface- Why is Apple so successful as a company? Their iOS is simple and easy to use. From your grandparents down to your little niece or nephew, they all can easily use an apple product. Replicate that model when designing your marketplace. Create something simple and sleek that fits with your target market. No need to go crazy with animation and things flying all over the screen.
- Build Trust With Review Systems- Why should someone trust doing business with you or someone on your marketplace? Setting up a review system can help strengthen trust within users and help make a name for themselves as well. Allow users to rate each other to eliminate all worries of whom they should and should not buy from. Simply by looking at their ratings and profile, one will be able to make an easier decision.
- Establish A Community- This goes hand in hand with your review system. The stronger the relationship is within your users, the more trust is built and leads to a more community type marketplace. Create subgroups, activity feeds, and forums to allow users to interact with one another. Whether they are seeking for answers or simply looking to make new friends.
- Integrate Multiple Communication Methods- Being able to communicate with buyers and sellers is a must-have feature within your marketplace. Integrate software such as Zoom, Slack, or Twilio can help create smoother and more secure transactions within your users. By simply having the option to jump on a video call or send a message prior to making transaction can help ease the mind of buyers. With these integrations, you will be able to “mask” the numbers so you will not have to reveal your own private numbers but can be sent directly to your line. Communication has never been more simple and easy to use!
While you can only do so much to keep buyers and sellers on your platform, there will be those who occasionally slip through the cracks. If you do find those who take the business off your platform, penalize them for taking it off the market. Prior to them signing up, ensure they sign an agreement to stay on the platform for all business related matters or a significant fine will be charged to their payment method on file. This will give your marketplace a stronger sense of security that they will stay on the platform. Start by giving warnings and if it continues, charge the fines and remove them from doing business on your platform.
You must stick to your policies in order to keep your platform up and running. Don’t let the users run your marketplace, be the one who controls what goes on. It will be tough at first as you work on to build your supply and demand, but as you continue to make noise in your industry it will all come into place. Focus on those who are actively using your marketplace and provide amazing value to them. Build on the successes you have encountered and leave the rest behind.
Do you have a story about users taking the business off your marketplace? We’d love to hear it! Comment below or send us a tweet @MrktPlacePfm.Happy readings!