3 Ways to Improve Supplier Quality for Your Consumer Services Marketplace

By: Charles Costa | June 4, 2018 | Marketplaces

Running a marketplace can be a challenge for even the most experienced professionals. The need to balance quality assurance against flexibility for suppliers makes the business model much more challenging than running a retail establishment. Consumer services marketplaces in particular are difficult to run because the operators aren’t able to directly control the actions of service providers.

In the past it used to be enough to provide a basic platform to bring buyers and sellers together. Think Craigslist—the no frills classifieds site thrived despite its less than stellar user experience and lack of safeguards to protect users from scams. It only takes one negative experience to hit the news and scare users away for good.

Craigslist is no stranger to such stories, and that’s one of the reasons it’s been losing popularity over the past few years. If you take a look at modern consumer services marketplaces such as HomeAdvisor, Thumbtack, and TaskRabbit, you’ll see that these companies have various measures in place to provide peace of mind—most notably reputation systems to hold sellers accountable for their actions.

While there’s no golden rule to ensuring the safety of your consumer services marketplace, there are a variety of methods you can use to ensure you’re able to build a trustworthy service provider base for your marketplace.

With that in mind, let’s touch on 3 ways you can build a marketplace that attracts high quality service providers, while keeping bad actors at bay.

1. Understand perceived risks

Perceived risks are common fears your marketplace users might face. They can be realistic, or farfetched. For example, a buyer might be afraid of letting a stranger in their home due to fears of an assault, or their fears might be more oriented towards property damage. Whatever the case, you need to effectively understand the risks so you can choose the safeguards that are best suited for your marketplace.

The first step to evaluating perceived risks is to ask yourself, what is the worst case scenario that can happen on your property? You’ll also need to consider how trusting your target user base is, and the scope of a transaction. For example running a marketplace for babysitters is going to have a higher bar for trust than a platform to find and hire contractors.

Think of it this way, in order to develop an effective safety strategy, you need to imagine the worst case scenarios that can happen, and then prepare for those accordingly. You can do this by answering common questions on an FAQ page and setting up a 24/7 hotline to help buyers/providers make the most of your platform.

While implementing safeguards and techniques will cost time and money, you can’t put a price on safety.

2. Develop a sound foundation for buyer/seller success

As mentioned earlier, although unmanaged marketplaces used to dominate the web, today the most successful properties are ones which provide a baseline level of support (e.g. FAQ’s, live chat, phone support) to help buyers and providers when things go wrong. Providing customer support for all stages of the transactional journey—before, during, and after the transaction—goes a long way in helping to improve the quality of service providers within your marketplace.

Still, providing great customer service only gets you so far as it’s more of a reactive rather than proactive approach to addressing problems that might come up. In order to stop problems before they come up, it’s best to establish ground rules and standards so service providers know what to expect when working with your marketplace.

If you’re looking to stand out from the competition, you could explore offering a happiness guarantee to encourage usage of your platform. Although many marketplaces disclaim themselves from provider liability, many marketplaces, such as TaskRabbit, offer some type of guarantee. These come into play should something go wrong (like a scratched floor or a dent in the wall), and the buyer/seller are not able to resolve the issue themselves.

3. Foster trust between buyers and service providers

Without actively working to build trust between your buyers and service providers, you’ll fail to achieve liquidity. As mentioned earlier, establishing ground rules for your marketplace users goes a long way in providing peace of mind for buyers, but it also helps improve buyer quality for providers.

Another way to improve service provider quality is to have the providers humanize themselves by creating profiles to showcase their backgrounds and expertise. Combine this with verification systems and reputation systems, and you’ll be providing peace of mind to buyers by adding another way to keep service providers in line. UrbanSitter for example is very hands on, and runs background checks on service providers. On the other hand, Upwork is slightly more hands off by enabling the community to self-police itself through two-way review systems.

Finally, as a marketplace operator, you can use messaging solutions to remind buyers about the safeguards implemented within your marketplace to ensure user safety. For example you can send messages to a buyer along the lines of “Thank you for your purchase. Your service provider, John, is scheduled to arrive on Monday at 10am. Note that all providers on our platform have undergone background checks before being allowed to offer their services.”

Making sense of it all

When it comes to developing a customer services marketplace, safety is priceless and doing everything you can to provide a perception of safety is paramount also. By vocalizing your rules and making sure your buyers/services providers know that your company cares about them…. it can serve as a great differentiator when safety-conscious buyers/service providers are vetting potential platforms to conduct business.

In order to effectively build a trustworthy supplier base, you need to focus on building with user safety in mind. By adding features such as seller verifications and reputation systems, you can help keep service providers accountable while providing peace of mind to your end users.

All that being said, technical functionality only helps so much. In order to effectively build a trustworthy base of suppliers, you need to ensure you have clear rules and standards to keep order within your property. By building a culture of trustworthy suppliers, the pieces of your marketplace should fall into place.
To learn more about how the marketplace business model can help improve your profitability, check out The Kahuna Blog. Simply click the button below!
Kahuna for Marketplaces

Sign Up to Receive The Big Kahuna

A Bi-Weekly Newsletter Focused Exclusively on Online Marketplaces

  • This field is for validation purposes and should be left unchanged.

Author: Charles Costa

Charles Costa is a content marketing manager who specializes in helping companies grow, one word at a time. Prior to Kahuna, Charles worked with brands such as Airbnb, Iron Mountain, and IBM on their content marketing efforts.

Charles' work has been featured in the Huffington Post, and he also was a contributor to the developer publication, Sitepoint.

View all posts from this author