Growth & Lovability For Your Marketplace
Golden Path or Sticky Workflow
Every marketplace platform is going to have a “Golden Path” or a “Stick Workflow” that your Power Users go through that encourages them to return and adopt your platform to a greater extent than a casual User. There should be a metric associated with this “Aha! Moment” because it is critical to your growth and getting repeat business.
If you’re using an Adoption Analytics tool such as Pendo.io, they have an out-of-the-box widget on the Dashboard when you’re first getting started. This is the “Stickiness Metric” that can be configured to suit your business model. If you’re doing after DAUs (Daily Active Users) then you may compare it to how many return in a month period. Or perhaps your platform is an RV rental marketplace where your Renters only come back once a year? Either way, you can configure this widget to appropriately track your adoption.
You can actually ask your Pendo.io sales rep to get an interactive G-Slide that will let you compare your startup to other companies of a similar size. Now, sadly they do not break it down by industry, but it is better than nothing. For us at Ruckify, we were tracking DAUs to MAUs (Monthly Active Users) and we always hovered between 23% to 30% which is outstanding for an MVP (Minimum Viable Product).
The goal is that once you’ve determined that that special Aha! Moment is, how to get new Users to go down that path and become a Power User? Take an evening, export any of your available data to an excel sheet, and dig in for the night. Analyze, re-analyze, and find different correlations within the data. It will force you to challenge your hypothesis and back it up with data and hard evidence, plus you’ll gain a deeper understanding of your Users.
During an all-nighter, I exported more than 10,000 anonymized bookings from our rental marketplace to find out these key things:
How many Renters are actually coming back to rent?
How many Posters turn into Renters and at what point?
How much are we actually netting after promotional credit spending?
How much more do we net on a Users second or third booking compared to the first?
What are the common traits of our Power Users?
This exercise eventually turned out to be more valuable than I originally suspected because of the level of new insight I gained into Who our Users are, What they do, and When they do it. After that, it was just a matter of gently guiding our other User segments to find that same Aha! Moment as the Power Users.
As I’m sure you can relate, having clean and reliable data at a startup is next to impossible when you have data siloed in 20 different tools in your stack. It will be hard to beat a manual review of data exported from your database. At the very least, it is a great place to start!
Now, as mentioned above, this is likely to be different depending on the category or vertical your marketplace is in. It is highly important to get alignment between your C-Team and other executives on the metric you’re looking to track and maybe even hold as your North Star.
The Return Frequency may also depend on the side of the marketplace you’re looking at, either the Supply-side or the Demand-side. If you have the ability to segment your Users into Co-Horts with milestones set for your release dates, then you’re able to paint a better picture.
By using Pendo.io’s Segment Tool this can be done, and if you’ve opted for 2-way API integration, you can actually feed this data back into your database and re-direct it to your email marketing tool to send strategically planned drip campaigns.
In the event that your startup is more mature, check out Segment and their Personas feature. Combining that with your Pendo analytics is an absolute game-changer for creating a personalized UX to get these regular Users to become Power Users.
How Do You Measure a Great Product?
As Product Managers, this is a question we get asked all the time, what is the KPI you’re using to track the “Lovability” of your product? Well, just think about yourself for an example. When was the last time you had an outstanding UX from another product or service? And can you remember what you did after that? You most likely told someone how great of an experience you just had using that product or service. Of course, you can layer in a few other obvious KPIs or indicators such as NPS or User Satisfaction Surveys, but spreading the word about a product is ultimately what you’re going after when building a marketplace.
How do you measure word-of-mouth? That is called a K-Factor! For every new User who joins your marketplace, how many more new Users are they inviting who actually convert. This is when your reliable data becomes even more valuable because you want to be able to track your K-Factor to such a level of granularity that it can be by a cohort of Users, Power Users versus Regular Users, etc.
The best way to help increase your K-factor is to incentivize your Users to invite their network and share their experiences. That is where a referral program comes into play which is explained below.
Having an amazing Referral Program can do wonders for your marketplace! Just read about how Robinhood generated a waiting list of 1 Million Users before its launch. Or the strategy behind PayPal & DropBox for their referral programs, PayPal was literally giving away money to its Users who successfully referred a friend to signup and send a transfer. DropBox would give away free storage for a certain amount of time to those who successfully referred a friend. Usually, the incentive of your program relates to your business in the form of credits or free rentals.
At Ruckify, we decided to create a referral program powered by SaaSquatch that combined cold hard cash and credits. If a User successfully referred a friend to rent an item, the “Referer” would earn 10% of the booking’s value cash-back. That 10% was the rake for the platform, so we wrote it as a cheap acquisition cost. The friend who was referred would also have a $35 credit towards their first booking that expired 60 days from their signup date. The credits were meant to give this User the sense it is essentially risk-free and they would expire to generate urgency and of course to not be a financial liability for the company. We eventually achieved a K-Factor of 1.6, which means for every User we converted to rent, they would invite 1.6 other Users.
To tie this in with the beginning of this blog post, we need to dissect the data behind the Referral Program because we were essentially paying at least $45 for that referral. This is what prompted those 5 questions and endless sleepless nights!
Once a referred User converts, are they coming back, or were they just in it for the incentive?
Have you ever used Instacart? It is a phenomenal app through and through! One thing that they nailed is their post-payment UX. They allow you to set replacement or backup items for those that you ordered, and then they ask if you’ve forgotten anything and need to add those bananas you originally forgot to your cart. Next, they ask you to share your experience with your social network and list the value props of their referral program easily and concisely.
A common mistake for a lot of companies when launching a referral program is that they simply don’t promote it, and instead hide it in a menu bar. Instacart is doing the exact opposite, they’re heavily promoting it even though I skip the page every time I complete an order.
The idea of a growth loop is that after every interaction with your marketplace, you gently nudge your Users to participate in your Referral Program and spread the word of your platform!
Think of ways to gamify or create an almost competitive User Culture to get your valued Users constantly sharing and engaging with you on social media. You can have public or anonymous leaderboards to show who has earned the most from participating in the program. It also has the added benefit of social proof to get more Users to believe and see the value of the program.
There is also the route of bringing an also Instagram experience to your marketplace by letting your Demand-side rate or “like” the offerings from the Supply-side. This would help encourage a positive User Culture on the Supply-end because they will be spending more time creating quality content of listings so that they get “liked” more and therefore rank higher in search results.
Becoming The Harley Davidson of Marketplaces
I asked myself this question a lot when developing the Product Strategy at Ruckify. How do we get a fanatic community that will buy and represent our apparel and even better, get tattoos of our logo? Well, this is another great article that explains how you can actually measure the “Lovability” of your product, read it here.
How do you create this die-hard User Culture that people are willing to devote their lives to live by your brand? It is an interesting question.
Chat with me on LinkedIn to let me know what you think! Darren Cody