When you’re building a marketplace, you’ll need to consider how people make bookings and what information the provider needs to collect from customers. A lot of careful thought and consideration needs to go into the design of your booking process. Getting it right and creating a smooth experience for both your buyers and your sellers can seriously improve your conversion rate. You therefore need to understand how your customers look for a service and how suppliers operate their business.
Before you get started, you’ll need to define five key metrics:
In this article I’m going to use a fictitious fitness coaching marketplace to take you through the considerations I would make when designing the booking process.
On-demand bookings mean that the customer can start the event at their leisure. Good examples include Coursera and Udemy where you can start or resume an online class whenever you like.
Scheduled bookings mean that the customer can book the event for a specific date sometime in the future. Think of Airbnb, where you book accommodation ahead of your planned trip.
So let’s suppose our fitness coaching marketplace is providing on-demand classes. If the class is online, you’ll need to make sure that only the person who booked it can access it so it’ll need to be behind some kind of “login” wall. Otherwise, anyone with the link could join!
Now, let’s consider how we would design the booking process for a fitness coaching marketplace offering scheduled bookings. In this case, we’ll need to know the availability of our suppliers. We’ll therefore need some kind of calendar functionality to make sure customers are not able to book a fitness class when the fitness instructor is not available.
On the customer side of the marketplace, we’ll need to collect key pieces of information from the customer like the date of the session, the start time and the duration. For example, if the fitness coach offers personal training sessions, they’ll need to know how long the customer wants to train for (45 minutes, 1 hour, 2 hours etc.).
On the supplier side, we might want the fitness coach to define acceptable booking durations. For example, a fitness coach might be happy to take a 30 minute class, or they might want to restrict people from booking more than 2 hours at a time. The fitness coach might also want to offer different prices for different durations (e.g. a half hour class might cost $50 but an 1 hour class might cost $75).
It doesn’t take a genius to know that a physical location is one with a physical address and a virtual location is one with an online address (a web page, a conference call etc.). But what are the design implications for a marketplace?
On the supply-side, if an event takes place at a physical location, you’ll need to figure out if your suppliers are always at the same fixed location (i.e. always at the same gym) or do they use many locations (i.e. going between multiple gyms or outdoor parks)? Maybe the suppliers of your marketplace visit the customer instead, in which case you’ll need to know the area(s) in which your suppliers are willing to travel.
On the customer side, ask yourself whether customers can choose their location from a list defined by the supplier, or whether they can enter their own location.
Whenever a physical address is required, I’d recommend that you integrate with a third party tool like Mapbox or what3words to ensure valid and accurate addresses are entered.
Now let’s think about virtual locations. Going back to our fitness coaching marketplace, we’ll need to know if classes will be hosted on our marketplace or held over a conference calling tool (such as Zoom)? Either way, you’ll need to think through how a virtual location is seamlessly shared with the customer. You might want to consider integrating with a third party tool or, a more simple solution is for the supplier to manually share the link to the event in a private message to the customer.
Finally, another important design consideration is when to share the location details with the customer. For a physical location, you’ll probably want to share this upfront, when the customer is searching for a supplier. This is because the customer will want to know if they are reasonably able to travel to a specific location before paying for the class. However, virtual locations are different. In this instance, you’d probably want to keep the location private until the booking is confirmed. Otherwise, pretty much anyone with an internet connection could potentially join the event for free.
Start off by developing a deep understanding of how suppliers currently price themselves and why. If we take our fitness coaching marketplace, I would arrange user research interviews with fitness coaches and ask them to tell me all the different ways they price their services, when they take payments, how they take payments and why they operate in that way. Eventually you might want to disrupt the way they operate and introduce them to new pricing models, but for now, focus on getting into the shoes of your suppliers.
So let’s take a look at the various pricing methods you might want to consider for your marketplace.
The most common one we see is fixed pricing. Fixed pricing means the price is… well… fixed. It could be fixed by time (e.g. $50 per hour) or it could be fixed per event (e.g. $1,000 per course). Either way, you’ll need your suppliers to define their “per unit” rate. Fixed pricing is the most simple pricing method to implement and I’d suggest that you start with this if you can.
Packaged pricing is similar to fixed pricing but it usually involves different pricing tiers. (e.g. 1 hour group fitness class = $50, 1 hour private fitness class = $100). In this instance, you’ll need the supplier to define each package by giving it a title, a description and a price. On the customer side, you’ll need to display each of these pricing packages and allow them to choose the most appropriate one.
Things can get slightly more complicated if your suppliers want to offer “add-ons”. Using our fitness coaching marketplace as an example, our fitness instructors might want to offer towel rental for an additional $5 or a protein shake for $8. Again, your suppliers will need to define each add-on and give it a price. On the customer side, you’ll need to enable users to select multiple add-ons at checkout. Just bear in mind that features like this might increase the complexity and cost of the build, so ask yourself if you really need this for your MVP or whether you can add this at a later date.
Finally, you might want to consider negotiated pricing. This is where customers and suppliers can discuss the scope of the job or their unique requirements in order to come to an agreed price. Negotiated pricing is usually best suited to services marketplaces where a professional is carrying out a job for you (e.g. a plumber fitting a new bathroom). In this instance, you might want to consider some kind of “chat” or “private messaging” functionality to enable the discussion to happen. You might even want to encourage them to share their contact details with each other so they can discuss over the phone. Alternatively, you might want to ask the customer to complete a form with their requirements which is submitted to the supplier to then provide a quote. This eliminates the risk of disintermediation (taking the business off the platform) which I’ll discuss in more detail later.
Quantity can refer to the number of spaces available in a class, the number of nights accommodation or the number of items you want to buy.
Some marketplaces won’t need a “quantity” aspect at all because all bookings are one-to-one. For example, if our fitness coaching marketplace was for private coaching sessions, the customer would not need to tell the supplier the number of people they are booking for. It would just be for that person.
If you do decide to add “quantities” to your booking process, you’ll need to make sure that the supplier is able to define minimum and maximum quantities where appropriate. In our fitness coaching marketplace, if suppliers are offering in-person group sessions, they might want to limit each class to 10 spaces. Alternatively, they might not want to run a class with fewer than 3 bookings.
However, for a supplier offering online fitness classes, availability might be unlimited!
On the customer-side, they will need to be able to define the quantity they are booking for. It seems obvious, but make sure they can’t choose a quantity that exceeds the availability of the supplier.
The final thing you should consider for your booking process is whether bookings should be automatically accepted or whether there needs to be some kind of review by the supplier before it’s accepted or declined.
Automatic bookings suit marketplaces where the supplier does not need to make any considerations on whether or not to accept the booking. Think of marketplaces like Udemy - suppliers don’t need to know who the customer is, when they’ll start/end the course, or where in the world they are. They just want to sell as many courses as they can.
Instant bookings can boost your marketplace conversion rate because it’s easier and quicker for customers to place orders/bookings. Plus, there’s no chance that the supplier will decline the booking. It's also the most straightforward process to implement and I would suggest you start with this if you can. However, it’s not always possible. If you do decide to go with manual reviews of each booking request, there are a couple of factors to consider.
Firstly, you’ll need to decide when payments are taken. If you take the payment upfront, you’ll need to deal with refunds if and when suppliers decline a booking. However, if you request the payment later (after the booking has been accepted by the supplier), you run the risk that the customer changes their mind and never makes the payment. One way around this is to take the card details from the customer and place a temporary hold on the card for the required funds. If the supplier accepts the booking, the payment can be completed, and if it’s declined (or the request goes unactioned), the funds can be released.
My advice is to always take the payment or card details upfront whilst the customer is “hot” and ready to take action. It will seriously help your conversion rate.
Secondly, you should consider how long you want to give the supplier to make a decision, particularly if your buyer and seller are in different timezones. If the supplier receives the booking request in the middle of the night, you want to make sure they have enough time to see the request, assess it and make their decision. If you give your supplier too long, it can cause real frustration for the customer as they don’t know whether their booking is going ahead or not. I would recommend you give your suppliers somewhere between 24 hours and 5 days. But it will really depend on the nature of your marketplace and you should make the decision through research and discussions with suppliers.
The design of your booking process is going to be heavily influenced by how your suppliers operate their business. Taking time to understand how they take bookings and receive payments during the research phase for your marketplace will be crucial in order for you to build a tool that is fit for purpose. Not all suppliers will follow the same process or operate in the same way. In this case, choose one business model for your MVP (e.g. pre-recorded on-demand fitness classes online) and add more later!
AUTHOR
With over eight years of product experience, Fiona designs beautiful, yet easy-to-use marketplace websites. What makes her unique? Well, she's an ex-marketplace founder and has previously worked for a Venture Capital firm so she has experienced life on both sides of the deal! Fiona is based in the UK and has clients all over the world.
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