Boost two-sided marketplace revenue by increasing user confidence in posting

Summary

We increased the client’s ARPU by 30% by giving users an alternative flow to convert. A user can either post a job and wait for bids from contractors, or select specific contractors and offer the job only to them. The first flow is offered by default. The second flow has to be selected manually. We gave users the option to choose one of the two flows more easily. This move resulted in a 30% increase in ARPU.

Overview

Kabanchik.ua is a two-way marketplace that connects users looking for a specific one-time job and contractors offering their services based on professional skills:

• A user can post a job on the marketplace and wait for contractors to bid on it;
• A user can select specific contractors based on ratings and profile description and offer the job directly to them.

Our task was to increase the revenue per user (ARPU) metric by working with the conversion rate (CR) and average order value (AOV).

Research

When we looked at the breakdown of revenue allocated to each of the two conversion flows, we found that the vast majority of users chose the first conversion flow that was offered by default: the flow where a user posts a job to the marketplace and waits for contractors to bid on it. This was the natural flow for users because it allowed them to see bids from multiple active contractors and choose the best one.

However, we also conducted user testing and user surveys and found that about 20% of new users wanted to know more about the selection of contractors on the marketplace before posting a job. New users wanted to know if contractors were qualified and trustworthy enough to do the job. Finally, new users wanted to evaluate whether it was worth their time to post a job on this marketplace.

Solution

Our solution was to combine the two conversion flows into one, allowing users to either post a job and wait for bids, or select specific contractors and offer them the job based on their ratings and profile. To do this, we introduced the “Popular contractors in this category” block on the job posting form.

Control variation

Alternative variation

We have done two things with this solution:

1. We allowed users to explore the selection of active contractors on the marketplace by easily identifying and visiting their profiles. Users used reviews from past jobs to explore contractors’ trustworthiness and expertise. This UX increased user confidence and motivation to invest time in posting a job.
2. We made it easy for users to find contractors who match their idea of a perfect job and offer them the job directly. Based on our logic, this would also increase users’ motivation to invest time in posting a job.

Validation of the hypothesis

To validate this hypothesis, we conducted an experiment that measured the impact of the new UX on CR, AOV, and ultimately ARPU. The experiment had the following characteristics:

Type of experiment: A/B test

Traffic split: 50/50

Key metric: ARPU

Number of users who participated in the experiment 4,137 users

Number of conversions recorded during the experiment: 1,465 conversions