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Service marketplace: The various strategies and goals
08 July 2021
Miniseries E-commerce features Part 4
Welcome to the chapter 4 of our series dedicated to service e-commerce. This episode is about the various strategies and goals behind a service marketplace.
In this episode, Hugues Odasso, Channel Manager at Cocolabs will explain the various strategies and goals behind a service marketplace. The marketplace model can be used in various business models, such as a B2C marketplace, a B2B marketplace or a C2C marketplace which can be used for collaborative economy.
First of all there are five main of the various strategies and goals behind a service marketplace.
1. Services e-procurement
The first strategy is e-procurement of services. The marketplace model can be useful in this sector to improve the management of internal purchases. A platform improves the experience for users and external providers and gives them the possibility to have a best in class service.
This strategy is mainly about improving operational efficiency of the company and has three main objectives.
Improving the activity management
Indeed, thanks to eprocurement marketplaces purchasing departments have a 360° overview of all the purchases made internally. It increases the number of data available and they are more accurate. It allows to reduce and automate the low value tasks of the procurement department
Easing the purchasing process for internal teams
Services e procurement platforms look like B2C ecommerce ones. So it makes it easier and faster to buy even internally, by adapting the B2B experience to the standards expected by users in their everyday life. The internal customer will be more willing to use an easy internal purchasing tool. Therefore it will prevent shadow purchasing.
Improving sourcing of services providers.
Indeed thanks to the marketplace model the detection, the onboarding and the selection of new service providers is eased. The purchase department can manage them, as well as receiving a good overview of the providers who are sollitated and attractive. The marketplace model helps having a better global overview of the activity.
As mentioned before purchasing departments, as well as administration and public services and freelancing industries might be concerned by the strategy.
Read our page about e-procurement marketplaces to learn more about this strategy and how Cocolabs could accompany your company towards that goal.
2. Digitalization of an existing catalogue
The second strategy is the digitization of an existing catalogue which is the case when a company already provides services but does not sell them online yet. This marketplace model strategy is a good way to better manage the activity, reach customers and / or access new markets.
This strategy helps cover two main goals : the operational efficiency and the customer growth and loyalty. It covers three main levels:
Develop and better manage the activity through a new channel
Indeed thanks to the marketplace model a company can reach more customers by improving the offer’s visibility as well as its presentation and therefore its understanding. It is also a good manner of generating qualified leads and sales with low effort. The third advantage is to automate low added value tasks.
Scale the activity and extend an offer catalogue
As previously mentioned it is a good way to access new clients and create new cross-selling opportunities through new offers. The marketplace model gives the possibility to grow externally with the lowest cost and risk strategy.
Adapt to customers’ needs and enrich knowledge
The marketplace operator can access direct and real-time data to strengthen customer segmentation and knowledge. It is also a good manner of piloting the activity in an agile way and of testing new approaches and offers directly with the customers.
The companies potentially concerned by the strategy are the personal service industries, the professional service industries, the installation & repair industries, the administration & public services as well as the software providers.
3. Developing a new business model around services
The third strategy of launching a service marketplace is to develop a new service business model. The aim is to launch new services either around an existing offer (product or service) or around a sector of activity.
This strategy covers three strategic goals: customer loyalty, external growth and disruption prevention. It has three objectives and benefits:
Increase customer loyalty and value
Developing services around an existing offer can help reduce pain points. It is also a good way to grasp unaddressed cross-selling opportunities. And finally the brand image and preference is improving thanks to the marketplace model.
Explore new territories and reach new customers
A marketplace could be a good way to develop new services around the core activity. Thanks to it its operator could grow externally with the lowest cost and risk strategy. It would also be a tool to test new approaches and offers directly with the customers.
Shift the organization and extend the offer catalogue
Finally the marketplace model helps developing new business models and sources of revenue. It reinforces the organization’s customer centricity by making decisions based on customers behavior. Its operator could be able to anticipate market shifts and disruptions.
This strategy is especially relevant for retailers, bank and insurance companies, manufacturers for example for installation and repair services, personal and professional service industries.
4. Unification & federation of an existing network
The fourth of the various and goals strategies behind a service marketplace is the unification and federation of an existing network. In this case a marketplace can help leverage connexions and build a network effect through a new online distribution channel.
This strategy covers four strategic goals which are the following: the customer growth and loyalty, the external growth, the disruption prevention and finally the network effect. This strategy serves two objectives and benefits.
Monetize an audience and build a network effect
Thanks to the marketplace model a company can identify gaps and synergies to build a win-win-win strategy as described in our article 3. A services marketplace helps increase brand fidelity for both clients and partners. It also helps improve positioning and to be at the centre of the ecosystem.
A disruption can occur from a competitor or an external actor. A marketplace can consolidate market-share and customer loyalty by strengthening the value proposition. Finally the operator can identify and fulfill gaps in the value chain to protect and or increase its margin.
This strategy can be used in the following sectors: bank and insurance, professional service industries, lobbies and industry groups and finally administration and public services.
The fifth and last strategy that we identified is to create disruption. A company can create disruption through a marketplace by creating a new service or a new offer that it doesn’t offer yet, nor its competitors. Thanks to those new offers a marketplace operator would be able to shift completely its market and bridge the gap between him and other companies.
There are various strategies and goals behind services marketplace if you want to learn more about the service marketplace model, don’t hesitate to request a demo.
Sources : E-commerce Nation – Top 100 E-commerce and INSEE – Les TIC et le commerce électronique dans les entreprises en 2019 / enquête de 2013 à 2019
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