You don’t want a fear of being let down to stop transactions from happening. This can manifest itself in many ways – what if my product doesn’t arrive after I’ve paid for it?; what if the item I’ve rented out gets damaged?; what if my credit card details aren’t safe?
Not only do customers and vendors have to trust each other, they have to trust your marketplace too. That’s a lot of trust to build, and there’s a few common ways you can do this.
Work out what they think the risks are
Some risks are real, some are imagined and unlikely to actually occur. Identify these perceived risks and work out how to make people comfortable that they won’t happen. If you have a very small marketplace website there is less of a need to worry about this as people are more likely to be comfortable transacting within a small group.
If your transactions are for relatively small amounts of money the perceived risk will be less than if for large amounts. There are also some groups of people, for example, older people, who are less trusting of dealing with strangers.
Finally, what’s the worst thing that happens if trust is broken? This is another factor to take into consideration.
How to build trust on marketplace websites to overcome risk
The first and easiest thing to do is to have a simple set of rules as to how your marketplace works. That way everyone knows what is expected of them from the outset and everything should run smoothly. This simple set of rules might be all that is required for a level of trust to be set.
In addition, encourage customers and vendors to talk about themselves so everything is transparent. People like to know who they are dealing with so profile pictures and bios from vendors should be used, they are proven to give customers confidence.
Make it easy for vendors and customers to communicate with each other. Often allowing them to chat via a messaging system is all they need to feel comfortable and trusting of each other.
That level of functionality isn’t always going to be possible though, but there are several other ways to validate people to limit the possibility of marketplace fraud. The easiest of these is basic email marketplace verification. Nearly all marketplace websites that have an option to set up an account using email verification. Not fool-proof as people can set up fake email accounts, but it’s a good start.
Similarly, it’s easy to perform phone number validation. Usually done via SMS with a code that the user then inputs into your marketplace. Again, not fool-proof but a good basic step.
Other ways of verifying someone’s identity is through a passport or driving licence check, if you think that is important for your marketplace to work. Likewise, if background checks are important (for example if your marketplace involves hiring people for work of some kind) then you can conduct these via an existing online system.
Even after all these precautions, sooner or later there is bound to be an ‘incident’, for example, a vendor failed to send an item to a customer or there is an attempt of fraud. The best, and traditional way, to eliminate the chances of this is through a reputation system – both for customers and vendors.
If reviews are left after each transaction, a picture will soon be built up of the person involved. This review should be quantitative (a star rating) and qualitative (a text section). Vendors with better reviews are often able to charge more than those less impressive reviews as people know they can be trusted.
The great thing about a review system is that it is just as valuable to vendors and customers as it is to you, so they will work hard to behave in such a way that they will be recommended.
Just a few things to note about reviews. They are not error-proof. Accounts can be made purely to leave reviews. What’s more, negative reviews are likely to receive one in return which isn’t necessarily justified.
Finally, people tend to leave reviews if they are extremely happy or extremely unhappy and not so often if it’s somewhere in-between!
Having looked at trust between customers and vendors, we’ll now move on to trust with the marketplace i.e. you.
Along with ensuring your marketplace security is as strong as it can be, it’s important not to forget the importance of a good first impression. A good solid design will naturally instil confidence in both vendors and customers. We can’t reinforce this enough. If your site is unattractive, clunky and full of errors (be they typos or poor photographs) people will think your offering will be the same. We’ve written more about this in How do I successfully communicate my value proposition?
In the initial stages you’ll be focusing on quality over quantity so it will be easier to monitor everything that happens on your site and indeed, you SHOULD be monitoring everything that happens. Once it gets bigger consider using content moderation tools.
Never lose sight of the fact that online marketplaces are there to solve problems and no matter how big they get, they need to be constant in doing that or its reputation will suffer.
If you do have issues you need to deal with them swiftly and keep communication levels open. Never be afraid to apologise if an oversite from your marketplace resulted in a bad experience and ensure that it will never happen again. Reimburse the vendor or customer that has been affected and leave them feeling like you did everything you could to make things better. If you deal with it well your reputation may actually improve.
Want to learn how to build trust on marketplace platforms?
Alternatively, reduce marketplace risk without needing to build trust
Depending on the business you are in, it might be that your customers and vendors don’t need a trusting relationship between each other, they simply need to trust your marketplace business. There are a number of ways you can do this by reducing any perceived risk that goes with performing transactions on your site.
Make sure the transaction experience and payment methods are simple and safe, and let it be known that you will cover things on the off-chance they don’t go to plan.
Use a secure payment system and add value with, for example, refundable deposits, insurance, protection etc This will have the added bonus of making it less likely that vendors and customers will want to complete their transactions away from your site, why would they with all that added protection?!
In the future the use of a different payment system, such as digital currency, will negate the need to worry so much about trust, and transactions will take place securely without involving credit cards or banks, thereby removing the chance of fraud and stolen credit card details. Technology innovation is advancing quickly, so is something you may want to look into for the future.