"Premium" offers aren't only good for you – but for your suppliers too!
Make more revenue & provide a more high-quality service, will giving suppliers another motivators. Magical, isn't it?
Following up on the topic of “how to keep suppliers on your platform“ of last week, I wanted to continue talking about premium layers.
Last week I wrote that in order to motivate your suppliers and make sure they stay on the platform, you could “Offer premium jobs/levels/orders to your best suppliers.“ Sounds great, but what does it mean exactly?
At some point in the lifetime of your marketplace, you are going to find that your suppliers belong to one of three categories.
There are bad, lazy or minimalistic suppliers. They don’t get amazing reviews, need a ton of assistance dealing with angry customers and should get sorted out at some point.
Then, there’s the big average cluster. They will often get good reviews because they are doing exactly what is expected from them. For most people, that does the job exactly.
And finally, there is your cream of the crop, the top 1%, 3% or 5%. The suppliers that go the extra mile and make your customer share the experience with other. Makes sense to try and keep them, right?
Today, if you are willing to pay the extra rate for an Airbnb Superhost or Uber Black driver, you are experiencing service from that top group. For reference: an Uber Black driver makes around 4x the money per ride than their Pop/X counterparts!
It’s needless to say, most Airbnb hosts and Uber drivers are striving to get onto those programs, so hosting/driving elsewhere is increasingly less attractive.
Likewise, if you are looking for a mentor and go for a MentorCruise Coach, you are getting service from the very best and experienced mentors out of a marketplace of over 500.
And the fact that this segment seems to go so much above and beyond shows in the statistics!
At MentorCruise, our coaches facilitate mentorships that go almost twice as long as the average, they have a 20% higher trial conversion and only half as much churn. While the average rating for mentors even on average is excellent at 4.74, coaches improve that with an average rating of 4.91.
Introducing a premium layer like this is difficult. For example, you will undoubtedly receive questions as to why someone didn’t get that premium status yet or you will meet suppliers that are a perfect fit but want the premium status right away.
With situations like this, making the “rules” and progress of the premium layer public are a must. For example, at MentorCruise coaches need to have an above-average rating of 4.9 to be considered. They need to have a rather long history of working with mentees on the platform, need to have sub-24 hours response times and need to have a spotless success rate.
Not reaching those metrics? No premium!
So, let’s put things into perspective and get an overview:
a premium layer can help give your suppliers something to work towards
well-designed premium programs will have lower churn and better conversion
you can charge upmarket prices for these services, e.g. at MentorCruise the pricing limit for coaches is 50% higher
the better the premium program, the less attractive for suppliers to jump ship
Sounds great, right? I am a big fan of this marketplace mechanic and now that you’ve learned about it too – hopefully it’s something to think about.