Within the short span of time, the online rental marketplaces have reached to a great extent. However, there is an increasing number of failures in running the rental marketplaces. The reason for the failure depends on various factors such as improper planning, not choosing the right business models, technical complexity, poor marketing, scaling issues and more.
Understanding some possible pitfalls will help to avoid failures.
In this blog post, I am going to share some best practices to overcome the challenges of running a rental marketplace!
Best practices to run a rental marketplaces
- Supply and demand
- Customer service
- Revenue model
- Multiple payments
- Engagement ratio
- Choosing the right technology
- Geographical distribution
- User experience
1.Supply and demand
Supply and demand are the most important key factor and having an important relation that meets the needs of the customers. However, if you don’t have enough supply or enough demand, then you may face some challenges in running a marketplace. This is coined with the term called “Liquidity”. It indicates how successful the marketplace is and the ability to scale.
We have already written a detailed post on solving supply and demand in the marketplace.
The marketplace operators should know the fact that providing a positive customer experience will dramatically increase the growth and value to the marketplace. Best customer service will only gratify the customer expectations. Bad customer service will lead to a reduction in sales and generate many complaints.
For example, if the customer retention is increased upto 5% then automatically profit will increase upto 25%. Investing in customer service will automatically decrease the churn rate, overall customer acquisition cost and decrease the amount you spend on acquiring new customers.
Security is one of the major attributes that help the marketplace progress to the next level. The marketplace needs to have a strong and robust security architecture framework for protecting their most sensitive and important informative data and transactions.
For example, SSL is an essential component of the data encryption process that makes internet transactions safe and secure. With SSL protection, hackers have difficulty in obtaining and reusing information illegally.
4.Choosing the right technology
In today’s era of hyperconnectivity, technology plays a major role and it is the backbone of every online business. Hence, technology is by no means a cure to any existing problems that the marketplace may face and influences the scalability of the product and also dealt with the investment of time and money.
The choice of business model is one of the main considerations that determine the success of every marketplace and helps in making the revenue stream. There are so many types of business models that are constantly changing in their form and functions but they consist of the same ingredients.
The essential elements of a business model include a unique value proposition, target market, competitive advantage, cost structure, key metrics, revenue streams, and profit margins. You can learn more about business models in this post.
The ultimate goal of any online marketplace is to satisfy its customers by offering them a pleasant user experience. To achieve the goal, there is a need to develop an outstanding user interface where a user can easily navigate and get the most of the benefits.
What else can be done in order to satisfy the user?
- Making your website visually appealing.
- Providing a clear path for potential buyers.
- Adding suitable calls to actions.
- Avoid too many pop-up notifications.
- Fastening the website load time.
First, the customer loves the brand than anything else. It not only makes an everlasting impression but it creates an overall impact on the market.
Branding your marketplace will help all in all the prospects like awareness, acquiring loyal customers, accumulating brand equity, attaining customer recognition, increase credibility and consistency.
The idea of the single payment option seems easy but offering multiple payment options provides a ton of advantages that makes your marketplace more profitable. Hence as per research, most of the users cancel their checkouts because of the unavailability of their preferred payment mode and some of the payment gateway only works in a few specific countries.
Having multiple payment gateways increase the sales rate with continuous cash flow, business innovation, global reach and helps to deal with different currencies.
The engagement ratio is the percentage of users who remain active for a long period of time in the marketplace. Measuring the proportion of users who are engaged gives you a good analysis to understand the performance of the platform.
Some engagement metrics to track,
- Bounce rate and page views
- Average session duration
- Navigation funnel
- Average time on page
Increasing engagement ratio helps in increasing communication and interaction, limitless market potential, boosting website traffic, increase the acquisition of users
Many marketplaces desire to extend their reach beyond boundaries. Some online marketplaces are incredibly good at scaling their platforms in different geographical areas. Geographic distributions help them to deliver their services, or products across all cities or countries wherever it may concern. Therefore, extending the distribution limit can also help in solving the supply and demand problem.
You may be a marketplace operator struggling to outperform competitors (or) a budding entrepreneur who wishes to start a new venture in the marketplace business. You should make a note of these 10 best practices for overcoming the challenges in building your marketplace.
Meanwhile, if you need more assistance or need a technical solution to build the marketplace, RentALL got you covered. We worked with different types of rental marketplaces and solved customer-centric problems. Get in touch with our experts at email@example.com