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On Demand Businesses 101

How Did Airbnb and Uber Attract Their First Customers?

Hi Entrepreneurs. In the last article, we discussed the steps for building a minimum viable product for your marketplace. Once, you have built your lean marketplace product, the next task for you is to attract your first set of customers.

Attracting Customers

Okay, Let’s face it. There is just too much competition in the market for online marketplaces. Attracting customers on any e-commerce website is not a cakewalk anymore. Even if you succeed on getting them on the website, unless you have some salience to provide it is going to be difficult capturing the share of mind. This gets even more difficult in case of marketplace websites. In a marketplace website, you are dealing with two sets of customers: merchants and users.

So how do we bell the cat?

To start with running a great customer attraction strategy, you first need to be clear about your product positioning. Once you are confident about your product positioning, you may some of the below enlisted strategies to attract customers.

Lesson 1: Experience is Everything

“First Impression is The Last Impression”

As discussed in the last article, never assume that just because the MVP is a minimum product, it doesn’t have to look good. If your website is not visually appealing, users will never stay on your website for more than 3 seconds. Build your online marketplace website keeping in mind both sets of customers.

Attracting Customers On Website

While designing the website, User Experience is as important as the User Interface. The customer should find what he wants easily on the website. If it is tedious to find things on the website, you will have a huge bounce rate and low returning users.  

Attracting Customers On Website

Designers Brian Chesky and Joe Gebbia couldn’t afford the rent on their San Francisco apartment. They decided to turn their lodge into a lodging space. This was how Air bed and Breakfast (now Airbnb) started. Lack of money dictated that they enlist their property on Craigslist. But they chose a more expensive option and created their own website. As Gebbia explains, “We didn’t want to post on Craigslist because we felt it was too impersonal. Our entrepreneur instinct said ‘build your own site.’ So we did.” And it worked!

Lesson 2: Go Social, Go Global

Yes, we still love traditional media. But if you want to capture the attention of a wider audience, social media proves to be a better platform. One good part about social media is the opportunity for Organic Growth (translates as FREE).

The one important aspect while considering social media is awesome content. If your content is good, then people will talk about you. Social Media platforms such as Facebook, Twitter and Instagram are proving to be great customer acquisition and engagement platforms.

If you plan to capitalize social media, you MUST:

  1. Try posting regularly. Well I don’t mean everyday, but enough that your users don’t forget you. The Quality of content is equally important.
  2. Try to be active on social media. Reply to comments quickly, try being witty so that people like you, and do not take customer grievances lightly. Do not let your competitors swoop in and take away an unsatisfied customer.
  3. Use more graphics; images are found to be more shareable than text.

Attracting Customers ON Webiste

Zomato, the food discovery and delivery app, uses social media to regularly engage with their customers. The content is witty and aptly focuses on their target audience. Now a significant number, The social media awareness makes it easier for them to communicate new offers and promotions to their followers.

Lesson 3: Not User Base, Build A Community

This is where most entrepreneurs go wrong. Due to the large focus on raising money and showing graphs of user growth, most entrepreneurs forget the very basic reason of starting the marketplace; Solving A Problem For The COMMUNITY. Building a community is all about providing enough salience to your existing customers that they reach out to more people and recommend you.

Attracting Customers on website

One great way is to incorporate testimonials of your happy customers. The theory of Social Proof explains that ‘when in doubt, we follow others around us.’ In Marketing terms, it is easier to attract more customers by creating examples.

Another great method is to emphasise on ratings and review system. When was the last time, you ever bought an item without reading the reviews of past purchasers? It is found that marketplaces that provide ratings and reviews, generally see more repeat customers.

Attracting Customers on website

If you want to build a community, meet people and don’t expect them to just come to you. During their initial phase, Tinder’s CMO Whitney Wolfe planned a tour that would take her to popular college campuses across the country.

  • She would go to different sororities, do her presentation, and have all the girls at the meetings install the app.
  • Then she’d go to the corresponding brother fraternity—they’d check the app and see all the cute girls they knew.
  • Tinder had fewer than 5,000 users before Wolfe made her trip. When she returned, there were some 15,000.”

Lesson 4: Keep Innovating

While it is safe and good to use traditional media for attracting customers, you got to find newer, novel techniques if you want to make a huge impact.

Attracting Customers on website

Airbnb started the Cap’N McCains and Obama O’s campaign. The founders bought tons of cereals and boxed them in special edition election packages during the summer of 2008. They sold it at convention parties. This not only helped them gather a lot of money but also got people talking about the venture.

In a 2013 hyperlocal expansion strategy, Uber offered free rides to Boston Public School students stranded by the bus strike. This campaign helped them achieve a 18% growth in revenue per month.

Lesson 5: Everybody Likes To Be Rewarded

I saved the best for the last. Or is it really the best? Promos and referrals are considered to be one of the easiest ways to attracting customers but recent consumer research studies have proven that they can be fatal too. Consumers get used to the promotional prices that they refrain from paying full price in absence of promotions.

Attracting Customers on website

During their promotional phases, Airbnb offered $25 travel credit when new members completed their first trip and a $75 credit when they hosted guests for the first time.

Attracting Customers on website

Yelp adopted a different tactic. In a non-monetary promotional campaign, Yelp offered special recognition to users who were first to review a business, and let other users give kudos for reviews that are useful, funny, or cool.

Promotions and Referral strategies depend entirely on what you suits your business model the best. Online Marketplaces Platforms Like Tiger help you manage promotions and referrals through the admin dashboard. You could either launch a global promotion like 70% off during Black Friday or generate personalized promotions if and when you need them.

Wrapping It All Up

As you can see, you do not need to spend a lot of money on attracting your first customers. The above mentioned lessons are just some guiding principles based out of experience. You need to be clear about what your value proposition, choose the right communication channels and then be super creative in the way you reach out to people. What works the best is out of the box thinking and relentless efforts.

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