Edited excerpt from Marketplace 2.0: How to engage and keep your users by Sangeet Paul Choudary:
Marketplaces often focus entirely on moving buyers towards purchases and sellers towards listing more products/services. This transaction-only focus is often at odds with creating stickiness and repeat usage. These are the key mechanisms by which marketplaces can move to an engaged and ‘sticky’ experience:
1. Reputation Systems: When a seller is committed to improving and maintaining their reputation on a marketplace, they cannot afford to participate on multiple marketplaces.
2. Collections: A wishlist or wardrobe feature on a marketplace allows buyers to collect listings and items of interest. As a buyer spends more time creating and customizing a collection, they are less willing to duplicate and reinvest the same effort onto another platform.
3. Personalized Feed: Tailoring content suggestions based on a buyer’s past transactions leads to higher retention.
4. Influence: Seller-centered marketplaces allow sellers to brand themselves, build a following and create influence. Sellers regularly push out content on their wares. The more buyers subscribe to one’s content, the larger the broadcast of one’s next chunk of content.
5. Workflow management: Service marketplaces are building out SAAS tools to incentivize the parties to complete the transaction online, for example by providing additional workflow management tools such as call management and invoicing.
6. Substituting transactions with subscriptions: Marketplaces that can offer a fairly guaranteed form of service, often move from an a-la-carte transaction model to an all-you-can-eat subscription model. Subscriptions keep buyers locked-in to the platform.