SV’s Ultimate Guide to Building Trust (Happy Clients) in an Online Marketplace.
By Siddharth Choksi, Analyst at Samaipata Ventures.
As illustrated above, trust is a pillar that varies depending on the good or service that is being transacted, therefore a marketplace for books will naturally have a drastically different policies to ensure trust within their platform than a marketplace for e.g. babysitters.
Therefore, there isn’t a golden rule on how to gain trust from your user base. There are numerous variables one must consider to determine the level of trustworthiness their platform should measure up to.
In this article, we’ll be sharing our viewpoint and going through a couple of tools which we believe are crucial for any form of online business model to build trust amongst their user base.
FACTOR 1: RATE AND VERIFY YOUR USERS.
Two simple, yet greatly, important and effective methods of ensuring trust amongst users, is by implementing a public rating system on user profiles and verifying the legitimacy of users’ data.
Firstly, hearing the experiences of previous users for the product / service you’re intending on buying is greatly powerful, and can often be the tipping point for users.
Implementing a public review system puts pressure on the suppliers to offer a high quality service, and allows demand-side users to evaluate the product prior to purchase. In fact, BrightLocal, a UK-based analytics company, has shown that 88% of consumers trust online reviews as much as personal recommendations.
Moreover, another key to gaining trust is to verify each and every user that joins the platform; which can be as simple as email verification with a one-click step, or more complicated like proof of address, identity, phone number, etc.
Verifying users serves as an advantage for all parties: demand-side users gain trust, suppliers don’t need to worry about fraudulent users, and the platform won’t be affected by users that join merely to take advantage of the system (e.g. by opening several accounts just for the discount).
FACTOR 2: FOCUS ON USER EXPERIENCE.
Having a clear, easy-to-use and easy-to-navigate interface is a necessity for any type of online platform let alone marketplaces.
Back in 2012, Harvard Business Review published an article that emphasised this point exactly: complexity provokes insecurity. In order to gain trust from your user base, it is essential to stimulate an inviting environment / interface by e.g. replacing jargon with conversational language.
Furthermore, an article by Forbes we see that user friendliness and platform usage are positively correlated, and at the end of the day, customer retention is a sign of trust.
FACTOR 3: FOSTER CUSTOMER RELATIONSHIPS.
The rationale is that users tend to trust online services more knowing that the people behind the platform are there for them in case something doesn’t go to plan; it more or less comes down to a sense of reassurance. To help facilitate this, bots can be implemented for both pre- and after-sale care.
Another simple, but vital tool is to have a comprehensive, well-constructed, and easy-to-navigate FAQ-section in order to instantly answer your customer’s doubts and clear any uncertainties.
Moreover, we highly recommend you to construct your own so-called “Fair User Policy” (FUP), as by committing yourself to a document that explicitly establishes your standpoint on fairness within the user base can truly enhance your platform’s image for new users.
FACTOR 4: CURATE YOUR CONTENT.
Content curation is common practice for virtually all major marketplaces; it’s implemented with the aim of leveraging user’s appeal of the platform.
It’s true that one occasionally still finds the odd “questionable” listing on some of these major platforms i.a. Airbnb, however, they only really tend to emerge after some digging!
This is due to the fact that nearly all of the Internet’s largest platforms tend to filter/curate their listings making the best rated / most attractive ones emerge on top of the rest, thereby instilling appeal amongst the user base.
Also, depending on the nature of your platform, generating curated content for pre-purchase information (e.g. a blog, or newsletter) can significantly increase trust, especially in industries such as health and travel.
FACTOR 5: ENCOURAGE SOCIAL INTERACTION.
Interaction amongst users and the so-called “humanisation” of online profiles is incredibly powerful and should be fostered and stimulated in order to create an increased sense of comfort.
“Build something 100 people love, not something 1 million people kind of like.” — Brian Chesky, CEO of Airbnb
Building a sense of community can prove to be a tremendous asset. Not only will it increase your platform’s value, but it will also lead to organic growth if one is able to foster the community.
It’s worth noting, that encouraging your user base to interact and form a “community” is a greatly effective way to push organic growth.
A great example of this is BlaBlaCar, the Paris-based carpooling app, who received a tremendous amount of word-of-mouth marketing due to the integrated community formed within its user base.
FACTOR 6: ALWAYS BE TRANSPARENT.
“A lack of transparency results in distrust and a deep sense of insecurity.”
— Dalai Lama
Transparency is probably the most obvious factor for building trust as the two go practically hand-in-hand, however, with i.a. the number of different intermediaries goods go through on certain platforms, and the hidden costs that aren’t always fully disclosed to the user until the time of payment, transparency has become ever so important.
In order to truly gain your customer’s trust, it is crucial to always have full disclosure and provide them with all the necessary information in the most convenient manner (i.e. through chat bots, email, etc.)
For platforms that sell goods online, be it e-commerce or marketplace, it’s key to always provide your customers with regularly updated information on the stance of their shipment,- i.e. where the package is, its estimated time of arrival, etc.
FACTOR 7: LIQUIDITY
As we have mentioned in some of our previous posts, building liquidity is a key concern for emerging marketplaces. However, this can, more efficiently, be achieved by initially focussing on supply in order to stimulate the consequent demand.
From a user’s perspective, a platform with wide supply and, more importantly, liquidity, is far more attractive as it emits a certain level of legitimacy.
As the saying goes: monkey see, monkey do! 🐒
FACTOR 8: GUIDE YOUR USERS ON ADVISED BEHAVIOUR
What this does is it explicitly establishes your (corporate) standpoint on inter-platform behaviour, which can be a crucial point of clarification for new users. Moreover, it establishes a certain level of needed governance. Which brings us to our next point:
FACTOR 9: PUNISH USERS WHO DO WRONG
It is crucial to clearly state and consequently implement a set of so-called “ground rules” along with a number of clearly explained retributions in order to establish a sense of control.
Furthermore, by instilling discipline onto your platform you reduce the chances of leakage, as the sole threat of being kicked out of the platform if caught is on its own a tremendous leakage prevention tool.
Therefore, users that indulge in illicit activity, mislead others, misuse or simply take advantage of the platform, should and must be punished for their wrongdoings.
FACTOR 10: ENSURE DATA PROTECTION.
With the ever-increasing number of hackings and data breaches, it is incredibly important to assure your user base that their information is securely protected.
Despite the fact the vast majority of governmental bodies, organisations, online platforms and businesses are legally enforced to adhere to a comprehensive set of data protection laws, it is still worth explicitly reassuring your users that their information is secure and won’t be tampered with!
In fact, studies have shown that startups and SMEs are often targets of cyber-attacks as hackers know they’re more vulnerable. Therefore, a clear understanding of the importance of IT and server security is of the essence.
FACTOR 11: WATERTIGHT INSURANCE IS ESSENTIAL.
When it comes to marketplaces, a highly effective way assuring trust is by insuring! Customers need to be rest assured that they have something to fall back on in case something were to go wrong.
Therefore, it is essential to create incredibly clear and comprehensive policies when it comes to insurance, cancellations, and refunds. These policies need to be incredibly clearly stipulated in a form that must be accepted by all new users when looking to join the platform in order to avoid any legal inconveniences in the future.
The strictness or leniency of these policies is completely up to you; it’s dependent on i.a. the type of service you offer and the image you seek to portray towards your user base.
FACTOR 12: HAVE A TRUSTED PAYMENT SYSTEM.
Lastly, but certainly not least, it’s crucial to have a trusted payment system. If there’s anything users tend to be possessive / worrisome over, it’s money.
Therefore, in order to combat this fear, it’s key to assure your users with a trusted, safe, and verifiable payment system with end-to-end encryption that’ll keep their payment and credit card information safe.
Example: take Airbnb — when booking a listing, guests pre-pay their stay on the platform, that sum is then stored in a secure cloud (usually third party) using escrows, and is later transferred to the host once the guest has left.
Additionally, in platforms like BlaBlaCar, the escrow payment method serves as a prevention strategy from last minute cancellations or “playing” with different supply users as the platform, unless stated otherwise, is entitled to retain a predetermined percentage of the total fee.
For this reason, it is key for the user to enjoy the platform stress-free by knowing that their payment will be correctly dealt with and, more importantly, won’t be meddled with whilst in the cloud.
PS: of course, there are numerous other measures platforms can undertake to generate trustworthiness, this is merely a short list of 12 factors we believe online platforms should consider exploring.
As usual, feel free to leave us a comment / send us feedback, we will be more than happy to get back to you!