It might sound obvious, but there’s a direct correlation between online marketplace trust and conversion rates.
It’s not hard to see why – after all, people do business with those they know, like, and relate to. But how, as an online marketplace owner, can you establish, build, and maintain user trust?
Let’s take a closer look at the nature of trust online, how it helps improve conversions within online marketplaces and classified sites, and how these businesses can increase user trust.
Defining trust for Online Marketplaces
Trust is complex. It’s part-rational and part-emotional. It’s something that can be earned, lost, reinforced, and rebuilt. It’s an enabler; an empowering force. It’s also tough to define; so let’s be clear about what trust means in relation to online marketplaces and classified sites.
Respected economist, author, and online trust expert, Rachel Botsman, put forward the idea – in one of her TED Talks – that technology and the sharing economy encourages us to place an enormous amount of trust in complete strangers and marketplaces.
While on the surface this may sound counter-intuitive, her assertion that humans constantly take ‘trust leaps’ in the digital world is persuasive. In order to take these leaps, Botsman argues, we need certain reassurances – which is where her concept of a ‘Trust Stack’ comes into play (watch our webinar for more on this).
There are three parts at work in Botsman’s Trust Stack: trust in an idea; trust in a platform; and trust in the other user. Now, it’s easy to presume that online marketplace owners should just be concerned with the second point. However, all three are equally important:
- Trust in an idea is essentially social proof – that the marketplace has a legitimate purpose and regular user base; and that there’s evidence elsewhere that this is the case – testimonials, good PR, social media links etc.
- Trust in the platform is the reassurance that the marketplace is accountable; that the information provided is true, accurate, and designed to benefit the customer; and that there are fail-safes in place to protect their interests.
- Trust in the other user is the confidence that the content others post on a marketplace reflects the actual product they’re selling. They need to know they’re transacting with a real person – and that that person has an equally vested interest.
Ultimately, all three of these layers can be addressed by marketplaces and classified sites – and need to be aligned in order to establish this complete Trust Stack.
But, this is easier said than done when your business operates across multiple countries, has listings in various languages, and has a business model that’s reliant on user-generated content from a myriad of users.
However, there are numerous proactive steps that marketplaces can take to ‘trustproof’ the way they do business – which we’ll now consider.
Building a better basis for Marketplace Trust
Building a solid trust foundation for an online marketplace or classified site involves addressing the entire user experience. Some aspects are more obvious than others, so let’s begin with the most evident.
This is probably what springs to mind immediately when the idea of ‘online trust’ is mentioned, and it is an important consideration. But it’s not just a question of choosing a reputable third party payment partner.
Payment preferences differ across national borders. Digital wallets, credit and debit cards, and cash on delivery are among the many different payment types used by a variety of marketplaces. Providing the secure payment option that your user base feels most comfortable with is a great trust builder – and plays into the wider user experience (more on that below).
Ease of payment is also just as important where trust is concerned. According to a survey, some 70% of users abandon their online shopping carts, and over a quarter (26%) do so because of complicated payment processes – directly affecting marketplace conversion rates negatively.
Policies & Guarantees
Most marketplace users won’t read the small print or the terms and conditions you set. But that doesn’t mean they can be neglected. When something goes wrong, users will immediately start looking to find out where they stand – so make sure your Service Level Agreements, moneyback guarantees, and data privacy policies are clearly labeled.
From a trust perspective, offering total transparency on consumer rights is very important. For example, guarantees – like eBay’s money-back policy – give customers the confidence to purchase on your marketplace; like a safety net.
Another great example is online shoe retailer, Zappos, which offers a ‘no questions asked returns policy – for unused items – up to a year after purchase. This (and other aspects of Zappos’ exemplary customer service) has become something of a ‘feather in the cap’ for the business. Putting the customer first is a key component of building a solid trust foundation.
User experience – or UX as it’s more commonly known – might be a bit of a technology buzzword at the moment, but for a very good reason. Ensuring that users easily and safely can find the information, products, and services they’re searching for has to be a priority for any marketplace owner.
Everything from the way a marketplace is designed, the content, the icons deployed, and the ease of navigation from one page to the next should be considered core parts of a site’s overall user experience too.
But how does UX relate to trust? Thinking back to Botsman’s Trust Stack, accessibility, user-friendliness, and online safety are crucial components in both the first (trust in the idea) and second (trust in the platform) layers.
Overall, UX is about reassuring users that they’ve made the right decision – at every point in their journey. Any UX action that enhances user trust helps smoothen the user journey towards conversion.
Safety and security doesn’t just mean making sure the right payment processes are in place. Sure, money is a huge part of the security equation; but even more important is ensuring users aren’t subjected to fraudulent, criminal, or unwanted sexual, racist, hatred, or violent content on your online marketplace.
Sadly, scams are all too prevalent online (see our previous blog): from catfishing to identity theft; as well as fake ads selling everything from high-value items at low prices, to seasoned classifieds scammers posting genuine ads in bulk to disguise fake ones.
This is where a clear content moderation policy and strategy can pay dividends. For example, setting clear rules for what ‘good’ and ‘bad’ content look like on your platform is a great place to start – and that information should always be clearly communicated to your users.
In addition to preventing criminal activities and inappropriate material, content moderation is also crucial for ensuring overall site hygiene. For example, it’s important to ensure that listings are placed in the correct category and that imagery used accurately reflects the descriptions given. In a study on classifieds listings we conducted a few years ago, we discovered that on average 15% of the listings are posted in the wrong category every month.
Similarly, employing dedicated moderators to ensure consistency and identify anomalies is now standard practice for many online marketplace owners. However, when the scale of UGC becomes too much for a manual moderation team to manage alone, there are moderation technologies out there (like ours!) that use AI and machine learning to moderate and approve content. By implementing automated moderation, be it filters or AI moderation, from the very beginning, your marketplace is equipped to handle the increased volumes as you grow.
Marketplace Trust & Conversions
As you have discovered; a great deal needs to be addressed in order to get trust right. That’s why it’s important to keep the end result in mind: creating safe online experiences that increases conversions and sales. But what overall impact does trust have on a marketplace’s success?
Again, looking at our user study on classifieds, several key stats give us an indication:
- 100% of the participants found irrelevant items in their search results
- 75% of participants found duplicate posts
As mentioned above, anomalies don’t play out well from a trust perspective. They not only cause confusion, but they also demonstrate to users that a site isn’t what it claims it is which can diminish their trust levels.
We also discovered that:
- Only 20% would buy the product in an ad with poor description and 73% were unlikely to return to the site: compared to 56% and 37% for a good listing.
In a similar way, a lack of clarity in the listing itself does little to inspire buyer confidence. However, the most telling stat from our study nicely summarizes the link between trust and conversions:
- 75% who saw a scam on a site said they would not return
It stands to reason that you can do a great deal to ensure your marketplace works well, is fast, reliable, and well-designed. You could also spend hours perfecting your UX, onboarding the right payment partners, and ensuring your customer service is top-notch. But if your site doesn’t exercise enough caution from a fraudulent and poor content perspective, the trust foundations you’ve worked so hard to build can quickly crumble.
This is the risk you take when the majority of your sales activity is driven by peer-to-peer interactions and user-generated content (UGC). It’s a delicate balance and can be tricky to get right. But done correctly, online marketplaces can propel their businesses to huge success.
However – it’s always worth remembering that while trust can take a long time to build, it can be lost incredibly quickly.
Want to find out more about building trust in your online marketplace? Take a closer look at our ‘Trust Stack Checklist’. If you have any queries about online safety and content moderation, please get in touch with our team.