Ten years ago, how would you have reacted if someone told you that they were going to fly to another country and stay in the house of someone they met on the internet?
And yet, today, thousands of people have opened their homes to complete strangers.
In a relatively short amount of time, people have grown to trust people they have never met.
This is the brilliance of the sharing economy.
And the principles of trust and transparency that underpin the entire system are the two greatest keys that we, as marketers in “traditional” business structures, can apply to our own work.
Open source software (Linux) begat open source information (Wikipedia), which in turn inspired peer-to-peer selling (eBay). As social media sites like Facebook became commonplace, if not necessary, we began, in a way, sharing our own identities with the world on Facebook.
Today, the sharing economy –- made up of companies like Uber, Lyft, Airbnb, ThredUp, and more -– makes up a rapidly growing part of our economy.
Nineteen percent of the US population has already engaged in the sharing economy (PWC).
For those of us who are working within the architecture of traditional businesses structures, the sharing economy is an invitation and a challenge to rethink how we do business.
Here’s what you need to know to attract a little sharing economy star power to you.
- Successful models are based on trust and transparency
- Peers trust their peers most
- Design and usability matter
- Agility, particularly in the sense of rapid prototyping, is key
Just Be Yourself: Identity, Trust, and the Sharing Economy
Now, I’m getting back around to talk about how important trust is within the context of the sharing economy.
The fifth tenet of Facebook’s guiding principles illustrates this:
People should have the freedom to build trust and reputation through their identity and connections[…]
You know it to be true; trust is based around who you are as a person and who the other person is as a person.
Whether you’re picking up your first Uber passenger or swiping right on Tinder, it’s important that the person you are about to meet is who they say they are.
These identities are verified through social networks, then reinforced by a system of reviews. Airbnb guests rate their hosts, but hosts also rate their guests.
In this way, a person’s reputation precedes them, and good behavior is rewarded with greater levels of trust by the community.
One bad review may not damage one person’s reputation forever, but multiple two star reviews will start hurting their ability to engage in the sharing economy.
The community is self-regulating in that way.
Follow the rules, and you get to be part of the community. Behave badly and the community stops inviting you to the party.
This is the reason many, if not most, sharing economy companies require users and providers to provide verifiable identities, not pseudonyms.
Happily, this is one of the easiest peer-to-peer strategies that you can adopt as a company.
Peers Trust Peers
This should come as no surprise to you. Most people trust other people, not advertising or marketing content or even celebrity endorsements.
In fact, that number could be as high as 92% (Joey Little).
When you are looking for a recommendation for a place to eat, a city to visit, or a hotel to stay out, you will turn to your friends, family, and colleagues.
The pioneers of the sharing economy made a gamble. Would someone like you trust other people -– people who were outside of your immediate network -– on the internet?
The answer is yes, absolutely.
From products on Amazon.com to theme park reviews on TripAdvisor, normal people are trusting the recommendations of other normal people.
The sharing economy has turned peer-to-peer into an art form.
What Can B2C and B2B learn from Peer-to-Peer?
If every person is a peer, then every customer is a peer. Which means, every business is made up of peers. No matter what industry you are in or how your business is structured, you are working in a peer to peer environment. You just didn’t know.
If peers prefer connecting with peers, then what is the best way to incorporate trust and transparency into your business?
One way is to leverage online reviews. We’ll address why a lack of anonymity is important in the next section, but until then, know that authentic reviews, input, and feedback are integral to a company’s success.
Take peer feedback in stride. Proudly display positives, and respond to and work to fix the problems that cause negative reviews.
(Customer satisfaction surveys are a great way to catch negative reviews before they happen, and addressing issues quickly can turn unhappy customers into evangelists.)
You can have the cleverest, most viral ad campaign of all time, and yet if your company is ignoring negative reviews, then you won’t survive.
Social media will likely be your canary in the gold mine.
Train your social media managers to listen in and respond to frustrated customers in a timely manner. The best marketing is good customer service.
Incentivize and reward your customers for sharing their positive experience with their peer network, whether through giveaways or reward programs. This way, you’re tapping into one person’s entire social group because your service was great, not because you paid a bunch for an ad campaign.
Hello, I am a Real Person. How Can I help?
One of the things people love most about ridesharing services like Uber and Lyft is the fact that the drivers are their peers, not their servants. While one is providing a serve, drivers and riders are on equal footing.
Drivers and riders are, for the duration of one car ride, friends and allies.
Anything can happen when you’re in the car with friends.
A Backstreet Boys sing along on the way back to your hotel? Yes.
An in-depth conversation about geopolitics on the way to the airport? Yes.
Businesses can be a little more like this, too. When service providers and customers feel like they are on the same team, then both sides benefit from a friendlier, happier, more meaningful connection.
One important way to do this is to give your employees, from marketing to customer service, the room to be themselves. Allow them to identify themselves by their first name and, just as importantly, to do the same to the customer they are interacting with.
It’s important for the relationship to be a two-way street. Think about the last time you talked to Comcast on the phone. Did you feel like a person? Or were you just a ticket number?
My guess is the latter.
And my guess is that you don’t feel particularly happy about paying for Comcast. Wouldn’t it be nice if there was a customer friendly alternative? (I’m looking at you, Silicon Valley. If you can do this, you can do anything.)
Design and Usability Matter
When Airbnb branched out into New York City, they found that listings there weren’t performing as well as expected. When they dove into the customer experience, Airbnb realized that the reason locations weren’t being booked was simple: the photography was terrible.
Hosts were taking photos with their phones and using those to advertise their open rooms.
So, they took matters into their own hands. The founders rented a camera and took professional-quality photos of each space.
The result? Revenue for New York City doubled in just a month (GrowthHackers).
The lesson for you? Good design matters because it makes your site or service easier to use and more trustworthy.
Potential guests didn’t want to stay at Airbnb sites whose photos left much to be desired. But once the photos accurately represented the space, guests started booking their stays.
This can work for your business, too, no matter what it is you’re selling.
Real photography is always better than stock photography, but make sure your photography is high quality and professional.
In addition, think about the experience a customer or potential customer has when they visit your website or brick and mortar storefront.
What’s better: standing in the rain trying to hail a taxi, or entering your destination into an app and pressing one button. This is the key to Uber’s popularity.
Don’t make your customers stand in the rain.
Agility: Prototype Until You Get it Right (Then Keep Testing)
In manufacturing, rapid prototyping exploded in popularity as 3D printers became more accessible, cheaper, and easier to use.
It’s my favorite analogy for how teams across many industries are working and succeeding in today’s markets. From developers to designers, they have adopted the rapid prototyping mindset.
Agile methodologies help make rapid prototyping available to marketers.
Social media and search engine algorithms are constantly changing, which means you need to adapt, too.
And you can’t always wait until the next groundbreaking thinkpiece is posted on your favorite marketing blog. Your audience is unique, so what works for you is going to be different from what works for anyone else.
Think of the sharing economy.
The leaders in this new kind of commerce did not follow the rules set down by traditional business practices. Instead, they forged ahead, updating their services constantly until they hit on the right balance of people-centric service, trust-building, and design. And, most importantly, they haven’t stopped innovating.
Airbnb now employs professional photographers to take photos of listings (GrowthHackers).
Uber is already testing self-driving cars (Quartz).
Ask yourself: what could be the next big opportunity for marketing? Is it Snapchat or embedded video? Or something else entirely?
Accepting the Challenge of the Sharing Economy
People have been sharing for as long as there have been people. Communities are, in a way, groups of people who share things, like food or childcare or power tools.
The social act of sharing, in short, is not revolutionary.
Building an entire economy based on sharing goods, services, resources, and knowledge sharing, however, is.
What do you think? Are you ready to act more like the sharing economy, or have I missed my mark? Let me know in the comments.