On-demand gig economy has changed the way people run their homes. You don't have to spend a lot of time for cleaning your house or doing the laundry - now you can instantly book these services online.
If you want to contribute to this fast-growing market - pull yourself up as the competition is strong. However, thorough planning and market analysis will help you to break through.
You can use this guide as a blueprint for a successful project launch.
You will learn how to create a business model, customer journey map and user flow for this type of project and how it will help you to come up with the features your customers need.
Online on-demand home services market
A global home services market is saturated with companies of different types and categories. Take a look at this map, this is only a small part of them.
According to CBI insights, these startups have raised roughly $1.5B in funding. Sounds inspiring, doesn’t it?
Well, there’s good news and there’s bad news. The good fact is that the on-demand home service market grows and there is a need for these services. However, this also means that competition doesn’t sleep.
If you want to stand out, you need to create a value innovation in your niche.
“Value innovation is the cornerstone of blue ocean strategy. We call it value innovation because instead of focusing on beating the
competition, you focus on making the competition irrelevant by
creating a leap in value for buyers and your company, thereby opening
up new and uncontested market space. Value innovation places equal
emphasis on value.”
Quote from the book “Blue Ocean Strategy” by Renée Mauborgne and W.
The first step on the road to value innovation is to know your audience like the back of your hand. Here is what to start with.
How to create an on-demand service marketplace your audience needs
Often business owners have a vague idea about their business model and target market. They rush to a development company with a desire to launch a website as fast as possible.
However, well-thought out business model is a foundation not only for business but for the technical aspect of your product as well.
If you know your product and problems it solves, a development team will come up with technical solutions that align with your business goals.
Now, based on real-life examples, I will show you how to do a detailed business analysis of platform for home services. It will help you to develop a competitive marketplace app.
Learn your customers
Who are my customers? This is the first question you have to ask yourself before marketplace development. Vague understanding of this aspect will break your whole strategy from the beginning.
Home service marketplace usually serves two customer segments: service providers and people who need to outsource some task.
Here are some of the questions you need to answer for a better understanding of your target audience.
Based on the answers, create a buyer persona template for each type of user. Imagine that you know these people, their problems, goals, and values. And the most important - you want to become their friend and help them.
Here is the template you can use for this.
Advice: Focus on one сustomer segment first.
TaskRabbit first promoted its services to just one customer segment - mother's group in Boston and expanded from there later.
Create a strong value proposition
What is the unique offer your customer will get? After brainstorming ideas with your team, come up with one or two statements that will represent your mission at its best.
Advice: Here are some of the tips on how you can сreate a unique value proposition.
- Analyze alternative niches
Don't limit yourself by analyzing only your direct competitors. You can get more insights by focusing on alternatives your customers choose between. For example, if you want to create an on-demand moving and delivery marketplace, analyze not only online marketplaces, but the traditional moving and delivery companies as well.
- Focus on additional services and products
Think of what people do before or after they use your product. What if you can include it in your services as well?
- Analyze not only functional but also emotional aspects of your product
Focus not only on a standard process a service provider should do, e.g. move a sofa or clean a house. What about bringing positive emotions and personalized experience, such as giving a small present or using a scented cleaning product?
Use cases: Here are value proposition examples of famous on-demand marketplaces that make them different from competitors
Save users time and increase productivity by providing cost-effective and safe solutions for chores and tasks.
We take jobs that many movers don't see as lucrative. Small deliveries and reverse logistics are our bread and butter.
Leveraging technology to decorate your space virtually – you spend some time chatting with your designer, send over some pictures and measurements, and we produce a beautiful design plan for you.
Analyze your competitors
Сreate a list of your direct and indirect competitors, analyze their strengths and weaknesses, and find areas for improvement.
Advice: Don’t try to outperform your competitors, but find a unique value you can give to your clients that is not used by others.
Use cases: Here is the example of how Give&Get analyzes its competitors' pros and cons.
Think about revenue streams
What value are your customers ready to pay for? How would they prefer to pay?
Advice: Focus on one revenue stream at a time. Think about how you can bring value on your platform to stop users from circumventing your payment system.
Here are the revenue models examples of some on-demand marketplaces:
- Taskrabbit - commissions from each transaction
- Thumbstack - lead fee model (customers post requests on the site, and providers pay in order to make a bid for these customers)
- Alfred - subscription model ( lets you hire your house help for 22$ per week)
Map out the customer journey
Customer journey is a visualization of user interaction with your product. It will help you to get into the shoes of your customer, learn about their goals and make sure that your product helps achieve them.
“You’ve got to start with the customer experience and work back toward
the technology, not the other way around”
Advice - Start working on a journey map only after you’ve analyzed your target audience and learned about their problems and needs. Without knowing who is the traveler, you’ll not be able to build the right path.
When mapping a user journey, concentrate on the following 4 aspects:
In what circumstances will your customers use your product? What does your user feel when engaging with your product? What emotions do they relive?
What is the reason behind using your product? What motivates your customers to turn to your product? Why is it better than competitors?
- Mental models
What are the customer’s predictions about your system’s behavior?
- Pain points
What are your users’ challenges? How does your product help to overcome them? What obstacles may your clients have when using your product?
Now you can proceed to journey map creation. It doesn't have to be perfect. You can even create it with the help of sticky notes and marker.
Write down all the actions a customer will take on your website. What pages will they interact with?
Think about their emotions, questions, and decisions on each stage of the journey
Map the pain points underneath a corresponding touch points
Analyze the general picture. What are the biggest pain points and doubts a customer can encounter? How can you make the journey more smooth and effective?
Here is an example of how this can look like.
Background: Jack has bought a house in a new city. He needs to move a large sofa there and has no one to help. Jack is looking for a person who can do it quickly and at a reasonable price.
Search in Google for on-demand service platform
Land on your website
Navigate to the “Post a task” page
Fill-in the requirements, date, and suburb
Get a quote
The prices offered by service providers are too high
Include a field with an “expected budget”
Include all the steps Jack will take until he finds a service provider and pays him for the task done.
Create a user flow
User flow is a path taken by a user on a website or app to complete a task. Unlike user journey map, user flows don’t focus on the user’s feelings or multiple layers of the solutions. Instead, they indicate an accurate path a user takes from point A to point B.
Initially, user flows were in the form of the flow chart, but now they are enriched with such visual elements as wireframes or mockups.
Bonus: Learn more about the importance of wireframing in this article.
Benefits of user flow
Test your idea on real customers
Get insights into each component of your app and its influence on the overall interaction with your product
Decide on the most important functionality
Make changes in the product before its production
Now when you know about the needs and wants of your users, it’s time to transform them into features.
Decide on the features of on-demand marketplace for home services
If you’ve done the analysis described before, you have definitely got insights about your target customers and how your product can solve their problems and make their lives better.
If you ignore the previous steps and jump into creating features immediately, you risk to develop a product that doesn't have a market need. I think it's not what you strive for.
When there are no one-size fits all features for such kind of platform and everything depends on your product, I'd like to help you and describe some basic features on-demand service marketplace should have.
Dashboards with info about current and past tasks, job status, payment methods, and notifications
Task estimation tool
Tracking task status in real time
Integrated payment solution
Map and list view
Reviews and ratings
For service providers
ID, qualifications, and licenses verification
Dashboard with jobs history, notifications, payment status
Scheduling tools, where taskers can organize their working hours
Statistics and analytics tools
Remember that you don't create features, you create benefits. Here is a nice quote from the CTO at Airtasker
“It's not all about dealing with feature, feature, feature. We'd much
rather focus on that customer journey that everyone uses rather than
trying to build a new feature that only 10 per cent of users
potentially might use"
What you need to know before creating on-demand home services marketplace
Focus on one niche first and do not expand too fast
One of the ways to escape competition is to focus on one niche first. In your case, this can be focusing on a certain city, group of customers or service category. Don’t try to serve all the possible jobs at once. Expand only after you’ve gained insights on how this market operates.
That was one of the reasons why Exec- on-demand marketplace for jobs failed. They’ve hired a lot of service providers, which turned out to be very costly. Moreover, they haven’t been able to balance the demand and availability, that's why they couldn't provide services to all their customers.
Create multiple user acquisition channels
This point in your business plan is worth attention. Brainstorm with your team and create a list of all possible channels where you can reach your customers.
For example, Tutorspree - on-demand marketplace for teachers was dependent on a single channel to get customers and didn’t have a budget to promote their product further. That's why it’s important to plan your customer acquisition costs along with the channels where you can reach them.
Speak with your target audience
This is actually a golden rule of any product development. Business plans, wireframes, prototypes, and hypotheses are a solid foundation for your product. However, nothing can compare to talking to your customers and finding out if a problem really exists.
Remember one thing: when people say that they like your idea doesn't mean they will use your product. Your task is to find out if a problem you try to solve with the product is strong enough and make sure you are solving anyone's problem!
I want to conclude with the framework used by Handy to identify priorities of things for on-demand marketplace. Concentrate on these points when you start building your strategy.
To wrap it up, here is the pillar of successful on-demand marketplace for home services (and not only):
Detailed business model
Buyer persona portrait
Customer journey map
Benefits in the form of features
The most important thing is to know that you solve anyone's problem and offer a value your customers will appreciate.Have any questions on how to develop a marketplace for home services? Share it below and we'll be glad to help you!