(Find the first two parts of these series here and here).
Scaling your marketplace.
Once your marketplace is built, tested and released for public use, you need to scale. Here are some pointers to help you attract and keep new users.
With the successful launch of your marketplace and the acquisition of your application’s first users, you’re in a good position for the floodgates to open. But that’s not something that happens on its own. It will take some careful planning and deliberate action on your part and there are several critical elements to the process. Plus, while what works well for a regular marketplace can be effective for an open source blockchain platform, that won’t always be the case.
The customer comes first
Whether it’s open source or conventional e-commerce, some things never change. Look after your customers and they will look after you.
Many businesses go for scale first. The reason is obvious: they want to get users by whatever means possible, bring in revenues and then worry about tidying up any glitches or collateral damage once they’ve got the funds to fix it. There are plenty of large companies that have gone down that route. You’ll be able to list any number that have compromised on customer service in the interests of saving money and getting big fast. They might be profitable, but that lack of concern for their users is an integral part of their brand (internet service providers often seem to be among the worst culprits). While some companies get away with it, it’s more likely that disregarding your users will hamstring you at a vital point in your growth :
Take care of your customers. For a marketplace, that means providers. As marketplace entrepreneur advisor Shelby Clark puts it, people will use your platform because it enables them to make money and earn a living conveniently. So ‘you get supply first. That is the answer. And it has to be high-quality supply.’ Low-quality supply means a poor experience for users – and that’s bad for everyone.
Build Trust.People who use your platform need to know you will take care of them. In other words, is your marketplace fit for purpose? If you go out too early, before you’ve built the tools you need to ensure users’ safety, you will lose goodwill and potentially customers. If you’re using a decentralised model, that necessarily changes things. BitBoost integrates escrow and third-party arbitration into its open source blockchain platform, allowing you to demonstrate that trust is not just a matter of company policy – it’s hard-coded into the software. Beyond that, there are further ways you can build trust online and create a credible brand. This includes everything from the images you use on your website (hint: stock images aren’t good) to the content and social proofs you provide.
Build a community. If you can create a group of engaged users who spend time together online, swap information, help each other out – and, as importantly – help you out with feedback and suggestions, then you turn customers into evangelists for your platform. The value of that will immediately be clear. There are many strategies you can use to go about creating a community around your application, but once again it starts with providers. Provide the tools for them to interact, facilitate conversations, get to know early and key users on a closer level, moderate conflicts where necessary and lay down some clear ground rules. With patience and a bit of gentle encouragement, your users will do the rest.
Launch
It’s tempting to go all-out with your launch as soon as your software is ready, using the release of the marketplace app as a publicity event. But hold back a moment, because that’s almost certainly not the most productive strategy and won’t serve your long-term interests – or those of your providers.
It’s far better to launch your platform when you have your first satisfied users and have already gained some traction. If anything, your initial ‘launch’ will be a beta or soft launch that uses the opportunity to enter into a dialogue with your first partners, iron out any glitches and make sure the marketplace actually works as intended. Then go for a big launch campaign. That way, new providers come into an already active and working ecosystem, with the beginnings of its own community. Remember, most of your providers won’t want to spend time helping you fine-tune your app or bootstrap your community. They just want to know it can help them earn a living better than the competition.
There are lots of ways to spread the word effectively, though if you’re on a shoestring then a viral marketing campaign may be worth a shot. Be warned, though: this is a very different proposition to conventional marketing and, to be successful, it will have little to do with your product per se. You’re looking for something that will stand out, a narrative that’s powerful – and most likely funny or outrageous. Your marketplace itself will be cleverly built into this idea. You can find some guidelines from a seasoned pro here – but bear in mind it’s a high-risk, high-reward endeavour.
Build Demand
After you’ve officially launched, it’s all about helping your providers by growing the demand side – bringing in buyers to shop at the stores represented on your marketplace. Just some of the marketing strategies you can take to make that happen include:
Marketplace SEO. This is a different beast to conventional SEO; Amazon’s search engine take a different approach to Google’s, and when it comes to e-commerce SEO the company is actually vastly superior to Google. That’s because the two engines serve different purposes. Effective marketplace SEO should include details of product data, relevant keywords and effective pricing, for a start. Then you’ll need to undertake a bespoke backlinking campaign that will focus on product reviews and appropriate press, rather than the more generic effort that would work better for another kind of business.
SEM for e-commerce. Paid Search Engine Marketing is an extremely effective way to acquire users. Once again, you’ll need to hone your strategy using the same insights as for SEO. However, SEM has proven to be the best form of paid advertising by far, thanks to the ease with which the parameters can be customised. If you can understand your market well, and target keywords that are both relevant and not too competitive (the big players will have monopolised those, putting them out of reach for startups), then the ROI can be excellent. Moreover, it’s scalable: you can take a pay-as-you-go approach to SEM, buying a little advertising at a time and experimenting until you find what works well. That makes it very cost-effective and allows you to take an Agile approach to your marketing as well as development. You can find more information and guidelines here.
Social Media ads. are another strand to add to this approach. This can be very useful in terms of segmentation and finding potential users on Facebook and Twitter, then building on these communities.
CRM System. It’s a good idea to use a customer relations management (CRM) system to onboard new providers, helping them organise their information and think more carefully about what they want to get out of using the marketplace.
Remember Network Effect
Lastly, don’t forget the power of network effect! Simply put, this simply means: the more people use your platform, the more attractive it will be to further users. It’s what makes the big social networks like Facebook and Twitter so resilient and powerful; newcomers know their friends and communities are already there, so it doesn’t make a lot of sense to sign up with a different platform.
Network effect is generally hard to generate – you’ve got to overcome the issue of being the smaller player yourself – but once you’ve got it, it gives you a tremendous advantage and insulates you from immediate competition. Moreover, it will help you rapidly scale further. The maxim is that the value of a network is a function of the square of its number of users (Metcalfe’s law), so doubling your userbase theoretically leads to a fourfold increase in value.
Of course, there are lots of ways of measuring ‘value’ and lots of ways of nuancing that. There are raw user numbers; the proportion of buyers to sellers; the overlap between buyers and sellers; the take rate; average order size; and total volume of business. Some of these will be more relevant than others. (For example, as an open source blockchain marketplace you will have a very different approach to take rate than an organisation like eBay or Amazon, which thrive off high commissions – your ethos and business model are different. This is also where you have a strong advantage.)
We’d love to hear from you about which marketing strategies you find most effective, so let us know about your marketplace projects and how you get on!