Let’s say you’ve just established an online marketplace, and the number of people using your digital market has increased. While generating higher engagement and traffic to your online marketplace is impressive, the effort committed to develop the marketplace and gain its initial user base is just the beginning.
What follows is the true challenge—and that is to know how to scale a marketplace to achieve long-term growth.
Scaling your marketplace is the process of formulating a strategy that outlines how you will distribute and make the most of your available resources to expand your marketplace brand.
Do you want to know how to kickstart and scale a marketplace business? You’ve come to the right place! In this read, you will know foolproof marketplace growth strategies to ensure your long-term success.
Growing your online marketplace can be a challenging endeavor, especially if you are just starting out. The e-commerce sector is developing at a breakneck speed. The power of the internet is being leveraged by both locally owned firms and sole proprietors looking to grow their own brands. As such, it is up to you to make the most of this opportunity so that you can promote your web-based marketplace to those individuals.
While similar to other things, there is no magic recipe that ensures sustained and long-term success. Nonetheless, it is possible to apply your vision to actionable plans to guarantee that you are proceeding in the appropriate direction.
Let’s have a look at the five ways to grow a two-sided marketplace:
For starters, traction is the rate at which your business plan generates monetizable value from customers; it is achieved when your marketplace attracts both customers and sellers. Traction is essential to the success of any online business. It is also connected to the rate at which you get what experts call the “network effect.”
If you’re wondering what “network effect” is, it’s a term that describes any situation in which the value of your products or services—in this case, your marketplace platform—increases as more people use it.
You must closely monitor the activities your users are engaging in so that you can make this “effect” happen and potentially develop your business. Reach out to your prospects and study how they interact with your marketplace. Using this method, you can find a way to promote your market in a manner that is not just scalable but also profitable and recurring.
SImilarly, it is essential to find a marketable niche. First off, it is best to zero in on one specific area so that you can establish a stronger footing and make the most of your brand. By focusing on one market niche at a time, you have fewer competition. The simpler the effort you must exert to tailor and focus your promotions, the more you can build a strategy that suits a targeted demographic for your online marketplace.
While leveraging your traction is a perfect way to start when it comes to growing your marketplace, your efforts will be fruitless unless you have a plan in place to promote it. There are numerous strategies to promote your marketplace, including increasing word-of-mouth and implementing referral programs.
It is a fantastic way to spread the word about your brand. Word-of-mouth allows you to increase sales without spending a lot of money on paid ads. All it takes is your marketing team’s creativity to create brand recognition and develop your user base.
More importantly, using word-of-mouth to advertise your company allows you to establish a community of loyal fan bases rather than relying on bolt-on clients. Keeping customers engaged throughout their relationship with the marketplace encourages them to refer your brand to others in their network. As your client base grows, so will your customer acquisition capabilities and lifetime value.
This is another type of word-of-mouth marketing tactic that increases the likelihood that a user will refer your brand (or marketplace) to others. You may wonder why you should bother putting effort into referrals when there are several other marketing tactics available.
Good point. However, most businesses fail to recognize the countless studies affirming how customers trust word-of-mouth (referrals) more than paid marketing. 69% of consumers who had an excellent experience with a company would suggest the brand to others.
While it is self-evident that getting a referral can occur naturally without your intervention, you can increase it by developing an executable set of plans to structure and encourage the referral process.
You can reward merchants or users who refer others to your marketplace. Of course, the incentive system will be activated only after the person referred by the user completes the sign-up process. These referral bonuses may be in the form of cash, large discount certificates, or free credits, to mention a few.
Creating an engaging referral network will help you retain your vendors and buyers while also developing long-term partnerships.
Don’t be misled; this does not imply that you should overlook the buyers. However, it makes more sense to focus on supply because they are the ones who drive buyers. Several studies have found that marketplaces with higher seller retention rates generate more revenue than those that do not.
Moreover, marketplaces that offer additional revenue opportunities and value-added services to their sellers improve their retention rates. These include optimizing platform security, streamlining onboarding processes, and integrating fast and reliable payment portals.
As your marketplace grows in popularity, you will need to cater to a larger audience. It is now your responsibility to successfully manage and regulate your growing user base. Despite how prolific the internet may seem, it is also rife with various risks. As a result, you must ensure that your marketplace is free of such dangers.
Start by validating all user sign-ups on your site. Examine their social media profiles. Are they active on social media? When was the last time they made a post? Is there a website? Also, check that the contact information they provide is easily accessible. Security precautions must be made to protect their reliability.
Assuming they passed your initial verification, you can take it a step further by promoting customer feedback. This allows you to determine whether they are offering the correct services to their clientele (buyers). It serves as your deciding factor in judging whether a given merchant provides a favorable buying experience to users.
It is important to note that safeguarding customer safety does not stop with verifying the identity of your sellers. You should also demonstrate that your marketplace is completely legitimate. Remember, you’re in the buy-and-sell business, which means money is involved. As the marketplace owner, it is your responsibility to create a refund and return policy that emphasizes convenience for both vendors and customers. This not only boosts your brand’s authenticity but also provides your users more confidence in engaging with the platform.
Most people find it difficult to track user behaviors in an online environment. It is especially true if they’re not well-versed in the profile verification processes.
You can enlist the help of a moderation team to deal with such quandaries. Take Chekkee, for example. Chekkee is a moderation company that has pioneered the provision of marketplace content moderation services with profile authenticating features to keep your retail space safe from hostile and malicious users and to ensure that all individuals who sign up in the marketplace are authentic users.
One of the most critical components of developing an online marketplace is deep listening. It goes beyond simply hearing customer queries and concerns. Sadly, several businesses fail in this area. Users or customers want to be heard and acknowledged. So make sure to make them feel that their opinions and feedback are valued!
Some companies tend to be “in denial” when it comes to dealing with negative user reviews. They have no idea that user feedback (even the negative ones) can have a significant impact on how you project your brand’s value proposition to the target niche and clients in your marketplace.
Simply listening to feedback from both vendors and consumers gives you a head start on determining the best course of action to deal with discrepancies and mishaps that the marketplace may have in the future. Listening to your customers also makes them feel appreciated and respected. Consequently, it increases their loyalty to your business.
Growing your market takes more than just five steps. Truthfully speaking, it is your responsibility to understand and adapt to the shifting tides of this dynamic industry. We’ve also done our part! The five aforementioned strategies are designed to provide the groundwork needed so you can obtain a better understanding of how to navigate the framework and setup of an online marketplace.
The next step is all up to you, so make it count!