How to streamline marketplace success with in-app communication

Using an embedded messaging platform to reduce friction and drive marketplace sales

By Lacey Riddick – Community Support Specialist

September 12, 2022


Online marketplaces face the unique task of getting two strangers to transact with each other. The scale and degree of this interaction vary based on your marketplace, but at the core of any marketplace is a connection that leads to a transaction between a customer and merchant. The overarching determinant of marketplace success, marketplace liquidity, is the frequency at which your marketplace can accomplish transactions from these connections. Providing buyers and sellers on your platform with a safe and efficient channel to interact on is the first step towards generating transactions and maximizing your marketplace’s liquidity.

The ability to communicate with the person you intend to make a financial transaction with is central to a user’s decision-making process, especially when the merchant has the most accurate information on whatever product or service is being exchanged. No matter how cutting-edge Airbnb’s support team is, the homeowner will always be the most effective person to answer specific questions about the house and stay. This sentiment holds true for Etsy creators, Wag dog walkers, and Turo car renters. Having a functional and reliable peer-to-peer chat tool is foundational to running a marketplace platform and streamlining sales.

Benefits of in-app chat for marketplaces

1. Reduces friction in the order process

Merchants can address a customer’s reservations in real time and speed up the process of placing an order without having to disclose any personal information (phone, email address, etc.) via an embedded chat tool. Also, depending on the marketplace, buyers and sellers can negotiate deals like lower prices, free shipping, and local pickup via direct messaging.

2. Increases accountability for marketplace operators

In-app chat provides transparency for marketplace operators to proactively monitor for unapproved behavior. Trigger words can be put in place to minimize disintermediation. For example, keywords like 'phone', 'email', 'PayPal', 'Venmo', or 'cash'. Also, monitoring for other bad actors like harassment or bullying.

Customer support representatives can also view direct messages between the buyer and seller to more efficiently handle order-related issues. This can help provide context and a full timeline on the situation and better inform the customer service agent on how to resolve the issue. Also, having a written account of these interactions can help product managers locate repeating pain points that may go unnoticed otherwise.

3. Boost trust between the merchant and customer

When making a deal with a stranger, direct messaging allows the customer and merchant to manage any doubts directly. This process humanizes the buyer and seller. Once a rapport is in place and a positive interaction has occurred, the buyer will likely feel more comfortable both with the seller and the platform itself in the future.

To build or buy

As a marketplace operator, the decision to build or buy a chat tool for your platform involves several key factors. Especially in the early days, developing a chat tool in-house can be a time sink for your engineer(s). When there were no better alternatives, this was just part of creating a new platform. However, as SaaS tools become more accessible, integrating a third party chat tool lets your engineers focus on what makes your platform unique to your users.

In addition to saving hundreds of hours of engineering time (and money) with existing APIs, your team can save even more time and ship faster by using pre-built (but customizable) UIs.

A chat tool will also allow users to make connections and generate transactions quicker and more efficiently. For example, some chat tools allow users to reply directly to email notifications. While this isn’t a requirement for a chat tool, this feature helps streamline communication between the buyer and seller and reduces friction in the order process.

Another point to consider when deciding to build or buy is that A P2P messaging system should go beyond serving as a communication channel between the supply and demand. Marketplace operators  need to be able to monitor this communication for support and to prevent abuse. As an example, the Marketbase dashboard empowers operators to proactively monitor their community’s conversations at scale. This helps operators combat disintermediation and understand the overall context around a user’s decision-making process.

Final Thoughts

An online marketplace requires an efficient channel for its users to communicate directly and safely. When deciding between integrating a third-party chat tool or creating your own, consider your time, financial situation, technical abilities, and what will provide the best value to your users. If you decide not to go the fully custom route, we encourage you to also check out the Marketbase messaging monitoring platform designed by and for marketplace operators. Marketbase is how marketplace teams monitor for abuse, identify bad actors, and organize all of this information into one sophisticated dashboard while saving months of engineering effort.

Read more articles like this on our Marketplace Insights blog.

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