What is a Marketplace? Business Model To Accelerate Growth

Online marketplaces are taking over the Internet. In the next year, online marketplace sales are expected to reach $350 billion, which would mark an all-time high in the e-commerce world. And it’s no wonder. The convenience and ease that online marketplaces provide for consumers means that more and more of them are popping up each and every day.

What is an Online Marketplace?

An online marketplace, also often called an e-commerce marketplace, combines products or services from other companies to bring everything together in one, convenient spot. Big-time examples of online marketplaces include Amazon, which purchases products from other retailers and then takes care of payment and shipping when it sells them back to consumers, and eBay, where private sellers are the product providers. Craigslist is also an example of one, often providing services in addition to products. The goal of an online marketplace is to curate products or services from other vendors so that consumers can easily purchase them.

This provides a complete solution and economies of scale, so companies focus on their products and services opposed to overhead business services. This delivers commodity services to companies, including an online storefront, marketing, payment processing, shipping, support, etc… However, the challenges of launching a marketplace are exponentially more compared to a direct online business. It is called the “Empty Room” dilemma, since you have to target 2 markets to make it successful. Balancing the growth of buyers and sellers creates a unique hurdle to solve in a go to market strategy. For example too many buyers with limited products or Too much product with no buyers will not grow the marketplace.

Why is an Online Marketplace Beneficial?

An online marketplace is beneficial to everyone involved. The consumer receives the conveniences — and often discounts — of shopping for a specific category of product or service, all in one place. Many online marketplaces also offer faster shipping than the service or product provider.

The service or product vendor wins, too. They receive additional business from the marketplace, which is bringing their products to a new group of consumers they may not have otherwise engaged with. In many cases, getting picked up by an online marketplace also means a steady stream of business.

What is the Upside of Having a Marketplace for Sourcing Data?

Products and services are some of the most commonly sold items online, but just as they can be curated and presented to consumers, so can data. A data marketplace saves marketers, journalists, government organizations and business people the trouble of collecting data through surveys or interviews. A marketplace that specializes in data connects people who have data — or can easily access it via digital scraping, mass surveys and more — with those who need access to the numbers.

By hosting a website providing data to those in need, an online data marketplace creates a bridge between the data vendors and the person or organization who is in need of data. This type of online marketplace provides convenience and speed to its consumers in the same way that Amazon or eBay appeals to shoppers. The only difference is that e-commerce consumers are after clothing, goods and products, whereas data shoppers are after the numbers.

The convenience that online marketplaces provide for consumers makes them a go-to destination for shoppers around the world, as well as an industry that will continue to grow in the future. But while this traditional e-commerce approach has dominated the industry for years, a data marketplace brings numbers to those who need them and it is a high growth area for the future. In addition, it provides additional educational content and tools to source the right data at the right price.

In a digital age, in which we so heavily rely on technology and data-driven numbers to make decisions, an online marketplace that provides the information its consumers are hungry for will continue to make waves in online industries. Data marketplaces are changing the way we think about the online world and provides access to more information than ever before, right at the consumer’s’ fingertips. As consumers, companies and organizations continue to hunger for information, online data marketplaces will thrive.

Sources

http://www.bloomberg.com/ss/08/11/1107_ecommerce/1.htm
http://www.forbes.com/sites/groupthink/2014/08/20/why-online-marketplaces-are-booming/
http://www.webretailer.com/lean-commerce/statistics-marketplace-seller-survey/
http://www.ebusinessguru.co.uk/10-statistics-online-marketplace-seller-survey-infographic/
https://www.pixelmedia.com/blog/5-ecommerce-stats-trends-you-should-know-about
http://whatis.techtarget.com/definition/data-marketplace-data-market
http://www.bizjournals.com/boston/blog/startups/2015/03/online-marketplace-experfy-now-has-1-100-data.html

What Is a Platform? Blending Technology And Collaboration

Inspired by the increasingly collaborative and interactive digital marketplace, the platform business model encourages consumers to not only purchase products and services but also contribute value to the organization. According to technology analyst Sangeet Paul Choudary, platforms allow users to “create and consume value”; YouTube, eBay and PayPal are just a few examples of a platform business model where customers are more than consumers — they are also contributors.

Platform Basics

The Harvard Business Review explains that a platform business is a multifaceted approach that incorporates consumers into the model in never-before-seen ways using cloud technology, social networking and mobile apps. With these methods, your platform can connect different customer groups and allow them to interact. On eBay, for example, buyers connect with sellers using the website as their base, while PayPal allows two groups of users to exchange money using its website and mobile app.

The Allure of the Platform

The platform business model is appealing to modern-day business owners because it capitalizes on what’s popular right now: interactivity, social media and the always-connected mindset of millennials and beyond. Potential customers always have a smartphone in hand, and they interact with friends through a variety of web- and cloud-based sources. Thus, creating a platform that makes the most of digital connections, technology and mobile apps seems like a smart and current way to elevate a business.

However, a platform alone does not guarantee success. For your platform to succeed it must attract enough interested producers and consumers to contribute their business, and it must be well-designed, focusing on efficiency and ease of use. Building connections is the key to success for your platform model, but not all business focus on this important step before launching their platform with sub par results.

Platform Benefits for Your Business

A successful platform business model cultivates connections before going live, and it builds a base of interested consumers and producers who want to add value to the business with their contributions. Using the eBay example, a lack of products for sale — that is, not enough sellers — will fail to attract interested buyers, resulting in a floundering platform.

When your platform is well-established, your business can enjoy a number of significant benefits.

Broader Contributor Network

You don’t have to develop everything in house when you have a bustling platform; instead, you will have contributors, such as app developers, from across the globe helping to expand your business. This rich network of contributors can respond to industry and customer demands, delivering the products and services that customers want at a more efficient pace. As a result, your business can accelerate growth thanks to its efficient and ever-growing network of contributors.

Extensive Marketing

Contributors to your platform will share their developments with their digital circle. App developers, for example, might tweet about their newest creation, while content writers might share their latest blog post on their Facebook page. As a result, your growing contributor network will deliver extensive — not to mention free — marketing for your business. This marketing can help build your customer base and see your business grow.

Limitless Potential

Web- and cloud-based networks offer limitless potential for your platform. You can continue to recruit developers and customers via the web and mobile apps, since tapping into this rich network allows you to reach beyond regional boundaries and engage with customers from across the globe.

Platform Practicality

Blending technology and collaboration, the platform business model capitalizes on modern-day trends, including social media. Choosing this model for your business can lead to growth and success if your network is well-developed, your contributors are talented and your customers are engaged. Working toward a platform doesn’t happen overnight, but the effort to build a platform can result in long-term benefits and growth.

Sources:

http://www.wired.com/insights/2013/10/why-business-models-fail-pipes-vs-platforms/

https://hbr.org/2013/01/three-elements-of-a-successful-platform

http://sloanreview.mit.edu/article/how-to-win-with-a-multisided-platform-business-model/

http://www.inc.com/phil-simon/why-your-company-should-build-platform.html

Service as a Service

First came PaaS then came Saas. But if we told you there is an additional SaaS in town? Service as a Service. That’s right! You might already be investing in software to enhance your business model and create new service revenue streams but do you know if you’re fully optimizing the use of that software? Are you aware that your teams may lack knowledge or aptitude for understanding the nuances of that software? This is where Service as a Service enters:

Filling the Gap

There’s a big gap between companies integrating technology to streamline business processes, spark collaboration, and fuel growth both internally and externally and the internal capabilities to execute these tools. For example, there are a variety of CRM tools, inbound marketing tools, link tracking tools, social listening tools, internal communication tools and the list goes on and on. The problem? Most these tools are all integrative and we end up on this never ending hamster wheel constantly trying to figure out which combination will help us be more productive and increase overall margins. The bigger problem? Most internal teams aren’t adept for understanding a vast majority of complicated tech tools and end up ‘throwing them away’ so they can ‘get back to work’.

This is where Service as a Service comes in. Let’s say your business is trying to increase productivity by integrating a CRM tool with an internal project management tool. (ie. Hubspot + Slack or Greenrope + Wrike). The challenges are you’re relying on your team to:

  1. Be able to quickly adjust to new internal company policy, and changes of current habitual communication processes
  2. Relying on individual aptitude for understanding the array of features provided by these tools and to optimize them.

Service as a Service helps companies

  1. Construct a plan of success to meet the company’s goals
  2. Implement the tools that will actually help them achieve their business goals
  3. Train employees how to use these tools effectively
  4. Be ‘on-call’ when there is a problem, and to consult on the nuances of the tech

The key to filling the gap is the expertise of an outsider to understand the ‘nitty gritty’, and recognize when the company isn’t optimizing tools, and will help them get the most value out of the tools they are using.

Automation isn’t always the Answer

Automation is seen in email marketing, social media, prospect nurturing and much more. However automation isn’t always the answer. Before you automate, it’s crucial to understand the in’s and out’s of the manual process. For example, do you remember the Coca-Cola automated tweet campaign during the Superbowl that went horribly awry? Here’s what happened: in an attempt to engage with negative tweeters during the superbowl by automatically retweeting and turning it into #MakeitHappy, Gawker recognized the automation and exploited it.

The lesson to be learned: automation isn’t always the answer. So how does this fit in with the Service as a Service scenario? Simple. Most social media teams aren’t technology experts and most technology experts don’t understand the behavior taken place on social media. Having a middle man that can offer insight into both worlds, could save a company from a campaign that could backfire by understanding all the loopholes and nuances of ‘where it could go wrong’.

Ultimately, if you’re going to spend time investing in technology, make sure to invest in optimizing the process and the people with the expertise as well.

 

Sources

http://www.networkworld.com/article/2293084/software/12-issues-you-need-to-know-about-software-as-a-service.html

http://searchcloudcomputing.techtarget.com/definition/Software-as-a-Service

http://www.computerworld.com/article/2516032/enterprise-applications/5-problems-with-saas-security.html

https://www.rickscloud.com/most-common-problems-with-the-adoption-of-saas-and-how-to-overcome-them/

http://www.businessnewsdaily.com/7838-choosing-crm-software.html

http://www.superoffice.com/blog/crm-software-statistics/

Agile Marketing

Agile methodology is commonly seen in software development and some project management styles. The method is gaining ground in marketing due to the changes that digital channels and new technology are bringing to the table. Agile marketing utilizes real-time data analytics and feedback, empowered teams and collaboration to drive a more responsive marketing strategy. An agile methodology is more than a way to speed up your reaction times to a changing marketing world. The Agile Alliance reports that companies have used agile methods to improve profits by up to 30 percent.

The Agile Manifesto

An agile marketing strategy following the principles of the Agile Manifesto and revolves around being able to react quickly to market disruptions. The biggest priority is to build the plan with change in mind. You don’t solely rely on a plan to guide your team’s actions. You adopt a flexible framework that can accommodate quick project shifts. You’re controlling planned chaos, in a way. You use real-time data analytics and other feedback sources to adjust your marketing efforts to optimize your competitive advantage. Finally, you adopt a strong focus on collaboration among the marketing team and throughout other departments, such as sales and customer service.

Trial and Error in Modern Marketing

Software development uses an agile methodology for iterative and incremental development. In modern marketing, you use this model for the trial-and-error process. You have the resources and support to test out marketing methods and gauge your successes and failures. An example of this, is A/B testing. If you’re developing a campaign, you can use an A/B test to see how the market responds to a variety of combinations of text and images. By using an A/B test you can quickly see how well campaign A is doing as compared to campaign B. Once determined, you can adjust quickly and continue with the stronger campaign to optimize your budget.

This concept of trial and error with agile marketing, enables instant feedback so your marketing can quickly adapt to your audience and deliver marketing messages that resonate with your audience and drive conversions.

How Agile Marketing is the Way of the Future

In traditional marketing, you follow a plan created months in advance. You have little, if any, leeway to change the plan to react to current events or other market disruptions. Your team has set duties without cross-functionality, and the marketing team may lack the ability to collaborate with other departments.

Agile marketing has recently formed the Agile Marketing Manifesto and utilizes collaboration, technology, and flexibility to create a marketing strategy capable of surviving in a world with constant market disruptions. Instead of falling behind on the latest social media trends, you can take advantage with agile marketing and fuel your modern marketing efforts. This new methodology is also known as empirical testing. Empirical means that you have a hypothesis based on observation or actual experiment and then you have tangible results derived through testing. Agile marketing creates opportunity to test marketing intuition and derive empirical results to support or counter those hypothesis. Because Agile marketing shortens the time span between the planning and execution stages, it’s now much easier to adapt on-the-fly and be able to continuously improve campaigns moving towards content personalization.

About Diggen, Inc.

Diggen is a data marketplace to help marketers become and manage data driven enterprises. Data driven marketing initiatives accelerate growth, since it improves key performance indicator (KPI) metrics and increases revenue over 19%. However, marketers have monumental technical challenges accessing data assets, sourcing data providers, and integrating into their marketing technology stack.

Our platform uniquely combines a data marketplace to source all marketing data with middleware to integrate into all marketing technology stacks. For example use our intuitive web interface to append gender, age, location to email addresses and integrate into an email service provider. Therefore, marketers segment their audience for newsletter emails, which creates relevancy, more engagement, and increases conversions.