Understand Supply Growth Tactics — Marketplaces
This piece is aimed at the service marketplace founder or supply community manager.
The biggest asset in growing a service based marketplace is building a quality pool of suppliers to connect and exchange value with buyers. I believe a common (yet unappreciated) reason marketplaces don’t find scale is due to specifics in the onboarding process deeply rooted in behavioral psychology. Marketplace founders will make decisions in forming the onboarding process that will shape future of the company. A real understanding of who suppliers are and how to quantitatively and qualitatively filter them will act as your engine or your anchor.
Getting your suppliers to commit to you is a big shift in their lives (in most cases). They all have a job history that doesn’t involve you and in most cases you’re asking them to make a big change. In return you must do two things, (1) offer them a reward big enough to justify their effort and (2) make sure they don’t leave you.
We obsess over our caregiver “Hero” onboarding process. When we started HomeHero, we went through the onboarding process for every on demand service marketplace we could find. We learned the intricacies of each and used that knowledge to build HomeHero’s supply on boarding process. This is something that came up regularly in investor conversations and Chamath and Jason Calacanis talk about it here.
Below are a few characteristics and approaches to think about when constructing a supply-side onboarding process. It’s my goal that by sharing our findings and insight, you’ll gain a better understanding of the tools and options available and hopefully build a better company.
Below is an outline of 10 marketplaces with screenshots of their apply processes. Each one is different and yet none are perfect. In conducting this research keep an open mind to the potential that there are aspects of the onboarding process that were unbeknownst to us and happening “behind the scenes”.
Click this link for the slideshow: http://gohe.ro/OnboardingSlideshow
Researched Marketplace Companies:
Supply Pool Qualities
The first step is to understand the qualities that define a successful supply pool. Here are few questions to ask yourself when thinking about what the supply needs to look like:
- Commoditization — Can suppliers be interchanged?
- Value — How much value will a supplier provide to customers? How much to you?
- Risk — How much could go wrong if a supplier does a bad job?
- Responsiveness — How quickly do you need a response from your suppliers?
Individual Supplier Psychology
This step is usually overlooked as it doesn’t seem immediately valuable, but trust me, it’s worth stopping to deeply understand your target supplier. My favorite exercise here is to imagine your target demographic supplier and write down their day eyes open to eyes close. This will open your mind to understanding where to place advertising, what messaging to use, how to build a referral system etc.
You should know everything about this person — what wakes them up in the morning (cats, kids, alarm, wife etc), what time they wake up, where they eat breakfast, how they get to work (car, bus, uber, bike etc)… and follow that until they go to bed.
A few defining questions to understand who your suppliers are:
- Personality type (Myers Briggs)
- Age (30–45)
- Gender ratio (85% female)
- Income level ($30–45,000/year)
- Technical aptitude (medium low)
- Urgency — Do your suppliers need results ASAP or can they set it and forget it?
- Trust — Do they need to trust you with their SSN, banking info, and or home address?
- Impact — Is this a side gig for them or will they rely on you for primary income?
- Behavioral shift — Is this experience similar to something they know or totally new?
- Career ambition versus contracting — Do they want tasks or a career with you?
Your Supply Funnel Options
Service marketplaces have a few defining properties that shape how you should influence your onboarding process. Below are areas of consideration.
It’s important to choose the best experience at your current stage, and consider using services like Onboardiq when starting up. The large marketplaces of the world evolved over time and did things that didn’t scale in the beginning. Growth is a journey and should constantly evolve, the fuel for evolution is inspiration.
Constructing narrative— Messaging is the easiest area to improve yet most often overlooked. People pay much more attention to the words you choose then the font you use. An absolute requirement before launching is to invite a supplier into your office and watch them go through the signup process. Then ask them to explain what your messaging means to them, I bet you’ll be surprised.
Are you a completely new service or a better version of something that already exists? The answer to this question should change the words you use and the entire sign up process.
Sourcing — Think a lot about where the best suppliers hang out, both online and offline. Then use the best channels to reach that population. It may be church ads, attending meetup groups, partnering with schools, or creating a brand ambassador program. Don’t limit your creativity here, Google and Facebook’s ads aren’t good enough.
In person or virtual — This is a big question and has a big impact on the culture of the company. If the decision isn’t obvious, it’s always best to start as manual as possible then work to scale. I personally interviewed each caregiver 1–1 when we started and was able to vet our initial caregivers to ensure quality, later we evolved to group onboarding locations that use algorithms to match locations with supply needs across cities.
Should you record phone screens, manually conduct phone screens, hold virtual video screens, or in person interviews?
- Uber — both online and in person
- Lyft — in person (with a Lyft driver mentor)
- Airbnb — virtual, but offers free photographer
- HomeHero — in person orientations
- Handy — in person, group orientations
- Dogvacay — virtual, phone screenings
Choosing your platform — What tools do your suppliers use? When deciding Should you build the application process for mobile first or web first?
Screening Personality — Your customers won’t remember what licenses a supplier has, but they’re remember if they smiled and were on time. Find small things that have big tells.
- Do suppliers have to pass an aptitude assessment?
- Online custom quiz (Instacart link)
- Recorded video questions (Taskrabbit)
- Recorded phone questions (HomeHero)
Order of operations — In the onboarding process at HomeHero, we have an online field for caregivers to enter their bank account information, so we can pay them. We also collect SSN for background checks. At some point we tried switching the order of these steps and asked SSN before bank info. People generally have issues with putting bank info on a website (understandably), but when we asked SSN first, they felt more committed to the application process and conversions jumped 14%.
These areas should act as a compass for building an onboarding process, the keys to success are iterative testing and feedback.