Customer Success in Marketplaces
Marketplaces are amazing models. In economic terms, a marketplace curates both supply-side and demand-side to help businesses and consumers make purchases or connections. The example we're most familiar with - Amazon. Amazon sellers can quickly and easily post products to their website, collect payments, and have Amazon handle logistics. As consumers, we can buy paper towels, new headphones, or a NSYNC retro poster in a couple of minutes, with Amazon acting as the broker. For customer success, this is an exciting model, as we have many levers and pulleys to drive customer success. However, there are also key challenges - namely, ensuring you deliver proper outcomes to both your supply and demand side, or else customers might go Bye, Bye, Bye - and never come back.
Before getting into some tactical advice for launching a marketplace success team, lets discuss strategy. Principle 1: Understand why everyone's at the party Your suppliers and demanders are on your platform for very different reasons. If you're going to design a proper system around ensuring both sides have a delightful experience, you need to understand why they came in the first place. Lets go back to our Amazon example, first looking at suppliers. If you're selling products, there are a few things you look for: 1. Customer Acquisition. It's expensive to drive leads to a bespoke website. While facebook and google have helped small business access world-class advertising, it's still pricey to drive conversions. And, if customers don't come back and buy more, your CAC:LTV will be unsustainable to thrive in the competitive retail space. Amazon carries the load of advertising and driving traffic, solving this problem, and allowing vendors to focus on reducing cost and driving reviews. 2. Logistics and Payment. Once you sell something, you need to collect the funds and ship it out. This can be a complicated value chain for vendors, with multiple technologies balancing inventory, logistics, and accounting. Amazon handles these services, so vendors can focus on sourcing new products, and growing sales. 3. Speed-to-Market. Launching a website can be time consuming. If you're warehousing products, the time you spend not making sales is pure cost. With Amazon, vendors can have products to market in weeks (or hours for drop-shippers), reducing the time it takes to start offsetting initial purchasing expenses. Consumers want something very different, in the case of Amazon. 1. Selection. Find what you're looking for, gain information, and make the purchase, fast. 2. Trust. Know that you don't have products containing Uranium-238, and your vendor is going to deliver. 3. Speed and Price. Jeff Bezos has said the two things he can't imagine customers saying are "I wish this was more expensive" and "I wish this took longer to arrive." Amazon uses design thinking to solve these problems. Making it easy to upload product information ensures a wide selection for consumers, and speed to market for vendors. Product reviews drive sales for vendors, and build trust for consumers. And, an open marketplace model with in-house logistics gives both vendors and consumers access to a competitive marketplace and world-class delivery times. Principle 2: Identify strategies that work for everyone
Marketplaces often bring together multi-billion dollar brands and mom-and-pop sellers. Understanding that your upmarket users have different needs than your small businesses is essential. For example, vendors are likely more concerned about margin than small businesses. After all, they have more channels to move product. Offering more bespoke advertising solutions, and at-scale logistic solutions (or allowing vendors to manage logistics themselves) creates an environment that makes Amazon as attractive for Nike as it does for Sue's Puddin' Pops. Importantly, take care of consumers. Your consumer facing product should be as robust as your vendor product. Properly understood, the consumer product is actually why most vendors by. Focus on doing things faster and cheaper for your demand side. make support easy, and think in terms of LTV. As mentioned above, if your platform isn't the go-to for your demand side, its not gonna be fun. Principle 3: Technology is your force multiplier Working in marketplaces presents a unique challenge for product and success teams. Balancing supply/demand-side wants and needs, as well as focus on both SMB and Enterprise segments. Data is essential here, understanding where you are seeing demand/supply drop early, and quickly remedying. Close collaboration with product and UX is key. Using a mixer of professional services, seasoned CSMs, and tech touches can help provide the nudges and relationships you need to minimize churn on both sides of your equation, and provide the enterprise support your largest clients need. Principle 4: LTV is everything
Unlike early-stage SaaS, where LTV "can" be fixed down the road, this is much more difficult in a marketplace economy. Having LTVs on both supply and demand side complicates this equation. Collecting as much data on vendors and consumers is essential. This allows customer marketing to re-engage at the correct time, and suggest other products in your ecosystem that may be a match for them. It should be noted that monetization is a trailing metrics, and initial experience is key here. To reference Amazon, your AI/ML driven marketing component won't get customers to buy their new product if they had a crappy first experience. They'll just open a new browser and go on to their next retailer.