Creating an online marketplace requires a lot of adaptability. In order to develop your platform, you will need to build user loyalty around your website. To do this, beyond its commercial aspect, your marketplace must become a real community where people who share a common identity, values and standards come together. If you still doubt the usefulness of a community for marketplace, you should know that platforms like Airbnb, Etsy or Blablacar have already adopted this strategy. At the end of this article you will know how to build and manage your own community.
Why build a community for your Marketplace?
Before we dive into community building strategies, we need to ask ourselves “why” this is necessary for your marketplace business and what are the tangible benefits that an engaged user community can bring to a marketplace?
Let’s see now what are the benefits of building a community for a marketplace platform:
A strong community to improve conversion and retention on your platform
Creating a marketplace site that has a community is the best solution to build user loyalty and increase transactions on your platform. Feeling that you belong to a community creates more trust among users who will not hesitate to come back and make transactions on your marketplace. The notion of trust is the more important as some matchmaking sites such as Airbnb or Blablacar put strangers in contact with each other and the platform is the only common link. The marketplace thus becomes the guarantor of all its users. Keep in mind that “if there is trust, it will always work!
Etsy is also a great example of this. In 2022, 44 million customers made an average of 5 new purchases on the platform. Of those, eight million made an average of 13 purchases. These repeat purchases indicate the good health of Etsy, which, remember, defines itself as, “More than a marketplace, but a community of artists, designers, collectors, thinkers and makers.”
A loyal community keeps the competition at bay
When users feel like they belong to a community, they are less likely to jump ship, even when a competitor tries to entice them with lower prices or other perks.
For EatWith, the largest community of local hosts offering dining experiences in more than 130 countries, it was important to build trust by creating a community. In an interview with EatWith’s launch manager, Joel Serra, said that they could have easily ten or twenty thousand chefs in a few months, given the overwhelming demand. However, they preferred to grow slowly and get to know their community. They opted for an almost personal approach with each member of their community. Knowing each host around the world, whether it’s through a Skype conversation or by attending their event, creates a level of trust that many platforms in this space do not. This slow, community-driven strategy has allowed EatWith to raise $8 million in funding and become a leader in an otherwise extremely crowded industry.
Take into account the suggestions of your community to improve your marketplace
By taking your users’ suggestions and complaints into consideration, you can get ideas on what your marketplace is missing. Building a marketplace website is a continuous learning process, so your users’ feedback plays a crucial role in understanding the needs of your community. If your users are more engaged, they are more interested in your product and are more likely to make suggestions for improvements or report bugs. This feedback is the best way to help you prioritize what needs to be worked on in your marketplace.
Word-of-mouth acquisition from the community
Word of mouth is an effective communication medium (referrals from friends and family) and inexpensive compared to other advertising mediums. Etsy, Airbnb, or Eatwith are all successful companies that have spent very little on traditional advertising and have relatively small marketing teams compared to established brands. Their main credo to get known? invest part of their resources to maintain their communities. In doing so, they have turned their most engaged users into ambassadors, who constantly spread positive information about their brand, driving growth in their marketplace.
Take advantage of members’ reach on their social networks
The community allows you to exploit the different media used by your users. It is about promoting your marketplace through different social networks such as Facebook groups, influencer accounts, online forums… These platforms where people with similar interests gather are all relevant communication tools to find new prospects. Etsy and Airbnb are examples of companies that benefited greatly from implementing such strategies during their first period of growth, notably by being very active on social networks and by organizing contests or forums.
This community-based strategy consisted in creating a “viral circle” that multiplies the number of users and facilitates interaction with the marketplace. it can be wise to encourage these exchanges by organizing events or by publishing yourself the first posts. You can do that through comments on profiles, chats, Twitter hashtags, Facebook groups, Telegram, Discord or other platform adapted to your target.
To sum up, the reasons why you should build a community for your marketplace are:
- increase your transactions with improved conversion rate and retention
- better resilience against competition
- better user feedback
- save on your marketing budget and improve acquisition through word of mouth and member communication on social networks
Build a loyal community for your marketplace in 7 steps
Once you’ve seen the benefits of creating a community for your Marketplace, here are some tips on how to successfully create and maintain your community:
Define your mission
Although it may seem obvious to you, this point is often overlooked by some marketplace designers. Defining what you want to stand for, and what change you want to make in your users’ daily lives, will help you create the identity of your future community. In fact, if you want your users to identify with your marketplace, they need to identify with your goals. Airbnb has put a lot of effort into understanding and getting people to understand their primary mission. As Brian Chesky, founder and CEO of Airbnb, says:
“For a long time, people thought Airbnb was just renting out houses. But in reality, we’re trying to provide homes for our users. You see, a house is just a space, but a home is where you belong. And what makes our community so special is that for the first time ever, you can belong anywhere. That’s the idea at the heart of our business: belonging.”
At the same time, it’s important to know that when you stand for one principle, it usually means you stand against something else. In the case of Airbnb, we oppose impersonal hotel experiences. For Etsy one has traditionally opposed industrial mass production. So don’t try to have goals that resonate with everyone. The result is likely to be a vague idea that no one really identifies with. Instead, be bold, and don’t be afraid to displease some people.
Once you’ve clarified your mission, stay true to it and don’t change your goal along the way, as this can alienate your community and lose their trust. Etsy recently switched to industrial items to reap more profits. This decision caused many original sellers to abandon the site and damaged Etsy’s reputation.
Set up discussion platforms on your marketplace
Once you have found the people who identify with your mission, you need to help them communicate with each other. You need to provide some sort of communication platform that allows people to interact freely without having to engage in a transaction. This allows them to realize that instead of being alone, they are surrounded by like-minded people with the same mission. If your marketplace is in its infancy, starting with a lighter approach may be enough; perhaps a Facebook group, or even just a hashtag on Twitter or Instagram. You can also adopt the strategy of Airbnb, eBay, Etsy or Uber by offering dedicated forums for your users.
During the first days of your forum, you will face the same problem as with your marketplace: it is not very active and needs users to function. In the beginning, you have to feed the forum yourself by starting threads. A great way to get people talking is to ask them questions. People like to talk about themselves. Create a thread where each new user who offers (or even asks) can introduce themselves and explain why they joined the community.
It’s not not only about keeping the community alive, but it’s also about helping people trust each other by hearing each other’s stories and realizing that there is another human being behind that avatar. Priming also helps set the tone for the community. Others will follow the lead of the first users. For example, when Reddit first launched, its founders outright created fake accounts and had conversations with each other, just to show what a conversation on Reddit could look like.
When your users start creating their own forum threads, make sure that each thread gets a response. People want their voices to be heard.
Focus on communities that already exist
Instead of creating a community from scratch, see if a community already exists around your cause. As Mark Zuckerberg, founder of Facebook, said when asked how to create an online community, “Communities already exist. Instead, think about how you can help that community do what it wants to do.”
For example, you can unite the jogging community by bringing together those who sell a watch that measures pulse and those who sell running shoes. Wallapop, a Spanish classifieds site, uses its platform to create a union between users who sell similar products. Ditto for Etsy, which was born out of a need for an existing community. As one of its co-founders, Chris Maguire, explains, before Etsy, their plans were to revamp an online forum for crafters, GetCrafty. The founders became active members of the forum and quickly realized that many forum members wanted a place to sell their creations online outside of Ebay. Thus, Etsy was born and was able to take advantage of the GetCrafty forum community.
Reward your most loyal users
You need to create a reward system for your most assiduous users. Those who buy and sell the most should feel loved, these people are your “power users”, your ambassadors. Offer them discounts, gifts and offers. Promote their backgrounds and stories. Obviously, these stories communicate the benefits of your marketplace, but they also serve another purpose: by reading a few stories, you get a basic understanding of the type of people who belong to your community. More importantly, you can also decide if these are the kinds of people you would feel comfortable with. This helps promote the usefulness of the marketplace and get a sense of who is using it.
BlaBlaCar, for example, highlights stories from its users on its BlaBlaStories site. Studiotime does the same on its Instagram account. Airbnb has a SuperHost program that rewards hosts who provide an excellent experience for their guests. SuperHosts receive travel coupons, priority assistance and other similar perks. On eBay’s side, they have a PowerSeller program that rewards sellers who reach certain sales volumes.
Stay on top of what’s happening in your marketplace
The rules are there to be respected and to create a healthy community. If someone goes too far, it’s important to take action. According to Nish Nadaraja, the creator of the Elite program at review site Yelp, when creating a community, one of the first things to do is to set up a conflict resolution mechanism. Also, keep in mind that conflicts are inevitable, so it’s a good idea to establish clear ground rules and set an example by being active in the community yourself and deleting inappropriate content.
Note: Don’t confuse moderation with censorship. If you want to remove users who are aggressive or malicious towards other users, you should not remove users or content that criticizes your platform or your customer service. This will backfire. This type of action will not go unnoticed and users will interpret it as an attempt to silence valid criticism. A better way to respond is to address the criticism politely but firmly and explain your position.
Meet your community
In some cases, building the online community is not enough. Interacting with people in real life can be a much more effective method of building loyalty. Rebecca Rosenfelt, product manager at Airbnb, explains how the marketplace uses “contact strategies” whenever they need to build community in new areas. They put together teams of two or three people and send them out to talk to locals, hold information sessions, hand out flyers and set up booths at local events. She says the customer acquisition cost (CAC) of this strategy (physical presence) is five times lower than Facebook ads. In addition, markets where Airbnb had a physical presence continued to grow twice as fast as their other markets.
The same process was used by Lyft, an Uber-like transportation service marketplace, which created the ambassador role to give users the opportunity to promote the platform in their city in exchange for money. Ambassadors can earn $10 per referred passenger and up to $750 for each referred driver.
You can also organize events to bring your users together and strengthen the community-marketplace connection. Many marketplaces organize launch parties every time they expand into new countries and cities. For its part, BlaBlaCar organizes cocktail parties and visits to different regions to build brand awareness and maintain strong ties with its community.
To sum up, this is how to build and maintain a community on a marketplace:
- Define the mission and goals of your marketplace
- Take advantage of existing communities
- Reward the most loyal users of your marketplace
- Moderate your marketplace without censoring
- Meet your community
- Set up discussion platforms to facilitate the exchange between community members
- Organize events to meet your community.
