As discussed in the previous chapter — How to Design a Reliable Payment Process — it’s important for you to decide on a payment flow and to know how to manage the financial risks and regulations related to transactions on your marketplace. By now, you should have decided on a payment method and transaction flow.
As a marketplace operator, you’re aiming to reach high liquidity on your platform, and one of the ways to convince your customers to make a transaction is through a seamless checkout and review process. You’ll find that sites with the best designed checkout and review pages can improve conversion rates.
The checkout process
Once your customers have committed to buying a product or service, you should be getting them through checkout as swiftly as possible. For a customer, the checkout process entails inputting information — name, shipping address, and other details to complete the exchange — and making the payment, if online payments are used.
Your checkout flow should be simple with as few steps as possible. The simplest checkout can be a one-page experience, with essential elements such as order summary, highly visible checkout buttons and credit card logos and security seals for assurance. You’ve probably heard that one page e-commerce checkout pages have higher conversions as compared to a two page checkout, although you should always do an A/B test for a one page versus multiple page checkout flow to see which one caters to your audience best.
Checkout page with a clear order summary and security seals. Photo credit: econsultancy.
Traditionally, the most popular checkout experience involves a shopping cart, like the one Amazon uses. The customer can add products to the cart, review what’s in their cart, and proceed to checkout when they are done. The shopping cart is a great choice if you expect your users to make multiple purchases in one sitting.
The shopping cart checkout model can be inefficient when applied to certain marketplaces. For example, if your marketplace offers rentals or services, your customers probably going to only decide on just one provider. Take Carousell or Thumbtack, for example — a shopping cart in their context may seem to get in the way more than helping to facilitate the transaction flow. The shopping cart introduces an extra step by requiring them to add the product to the cart before being able to proceed to checkout. When using Booking.com, once you’ve decided on a service you’d like to book, you move to the booking page instantly.
Studies show that more than 50% of potential customers abandon their shopping cart, and one of the most common reasons for abandonment is forcing users to register their details before they checkout. Companies such as Apple provide a guest checkout option to its users instead of making it mandatory for them to fill forms to create an account. How simple or complicated your checkout process is can determine if your users are going to follow through with a purchase.
Reasons for abandonment. Photo credit: WorldPay.
Having said that, it’s crucial for you to decide whether registration should be mandatory during checkout. Popular marketplaces like Etsy and Airbnb still require you to sign up or sign in before you can make a purchase. Even though removing that step makes checkout easier, you might be forgoing the opportunity to acquire new users and to get them to make repeat purchases.
Other than confirming the order, you can also give customers the option to create a new account after checking out. Lastly, if you decide to spread the process across multiple pages, don’t forget to add a visual indicator of how far your customer has progressed.
The review system
Testimonials and reviews are important for the success of your platform as it aids users in their decision-making. Highly visible ratings motivate sellers to ensure the quality of their products and services. Having a review system in place also makes it more likely for your customers and providers to use your payment system, as receiving reviews and having their good reputation on display adds value in itself.
A good review system has a quantitative and the qualitative aspect. You can ask users to give an overall numeric score or star rating for different aspects of the transaction, and to leave their comments in the text section. A similar system helps Booking.com customers to differentiate different accommodation offerings.
Photo credit: Booking.com.
Booking.com’s scoring system is designed to capture multiple aspects of a service or property. Its review system also includes open-ended questions, one to highlight positive experiences, and one for complaints and aspects that can be improved on. The final review score is derived from all the individual scores, giving users an overview of the property’s service quality.
You can instruct your customers to leave a review after the transaction is complete. It’s also common for marketplace operators to solicit reviews after the transaction has taken place. Booking.com sends out e-mails to remind those who have booked a room with them to leave a review of the property after their stay.
Avoiding inaccurate reviews
By incorporating users’ social media accounts and allowing only those who have used the product or service to leave a review, you reduce the probability of users creating fake reviews to boost their reputation. As such, your platform needs to be able to track when a transaction has been completed. This can be done automatically — in Booking.com’s case, at the end date of the stay or rental.
As your marketplace grows, you need to closely monitor the quality of reviews. Beware of users engaging in feedback extortion, which is basically giving a bad review of someone who has left you with a bad review. Airbnb avoids this issue by employing a “double blind” review system, in which both parties have 14 days to leave the review, after which both reviews are published simultaneously. Once the reviews are published, they can no longer be altered.
Once your marketplace platform is all set and ready to go, we can move on to the launch phase. In the next chapter, we guide you through creative pre-launch and launch ideas and prepare you for the unique challenges in this particular phase.