What makes Sharing Economy businesses successful? Why do some innovative concepts take off and others never make it out of the hangar? It can easily be said that customers drive business, whether it is a conventional mom-and-pop’s corner store, or a car-sharing business that depends on reciprocal input of local membership.
So understanding what motivates customers – whether they are members of a cooperative, clients who share an office space by the hour or professionals who share the administrative costs of an accounting and booking service, is an essential for any successful business. And the answer, not surprisingly, lies at the heart of what propels the Sharing Economy itself.
Remember: Sharing is all about trust
Remember those schoolyard days with best friends when everything seemed conveniently sharable? Your mom’s best turkey sandwich, your favorite bike, even your treasured toys could be shared with your buddy, who in turn, never failed to divvy up her lunchbox treats and share her own best toys.
After all, you had a common bond that underwrote everything you did together: trust. You knew your best friend would never steer you wrong because in a sharing world, we respect the other’s opinion of us, and want them to keep on sharing as well.
“I value something more if I share it,” explains Ted D’Cruz Young, co-founder of New York’s popular meal-sharing cooperative, Mealku. And we value it because we inherently value the ability to trust and share in that experience.
So a person who wants to be able to rent a room in his house to a complete stranger has to be able to trust that his things will be respected during that two-day stay. And a person who orders a meal on a meal-sharing network has to be able to assume that that the bouillabaisse that’s been prepared in a private kitchen by an unknown cook is going to be as good, if not better, than a restaurant meal.
Nothing engenders trust more than the positive values we promote in our own business dealings. Remember that it may be just as hard for your customer to trust a total stranger as it is for you.
Support other businesses within your sharing community
Remember that in many ways, your success depends on others’ support of collaborative consumption.
“You can’t just have one thing shared. There have to be many things that are shared to make the sharing economy really work,” says Katie Stafford, corporate communications manager for Car2Go .
Airbnb succeeds because there are others who believe in its philosophy and provide mutually supportive services in the area; Car2Go thrives in cities where there is a compatible transportation network that links well with a shared vehicle system.
And when you’re online don’t be afraid to share the PR, too. Social media has taught us that reciprocal shout-outs have valuable consequences, and even more so in a community that is based on sharing good experiences.
Give something to get something
The Little Boxes Black Friday event in Portland, Ore. demonstrated this by making shopping on Black Friday fun, intriguing and accessible. More than 160 stores across the Portland area linked together on Black Friday, offering discounts and incentives to “shared” customers. The more stores that the customers visited, said Betsy Cross, co-owner of the retail store Betsy and Iya, the more potential discounts they earned on their purchases. The “shared” process benefited everyone involved.
Car2Go has exhibited this principle by rewarding good neighbor practices, like topping off the tank (with the company’s gas card) with free drive time and using similar promotionals that attract new customers who want to try out the service.
Mealku takes care of all of the fuss and muss by proving transport service, and “paying” those members who cook, or do other tasks for the benefit of the community.
WeTeachMe co-founder Kym Huynh puts it another way: “Not only talk the talk but walk the walk.”
WeTeachMe is an innovative sharing economy model in Australia that provides services to self-employed instructors and teachers. They’ve particularly been popular with foodies who provide cooking classes, but are branching out into other sectors of education, such as language instruction.
Huynh said his business model is structured so that “we won’t grow if you don’t grow.” In other words, says Huynh, “Pay it forward.”
The Sharing Economy isn’t so much set by its altruistic values, but by its practical appeal. Stafford says that one of the guiding principals that has made car sharing so successful is its functionality in the urban landscape, where two paycheck earners may have opposing transportation needs, or where downtown parking costs make it impractical to drive to work. Before putting your idea into drive, consider how well it fits with the practical and functional needs of your target customers.
Collaborative consumption takes a change of perspective
Remember that the Sharing Economy is a “change of mindset,” says Stafford. The collaborative consumption defies the old convention of “the one who has the most toys wins.” Or, as Neal Gorenflo, founder of Shareable, explains in his interview with Grist Magazine, “You don’t want the drill, you want the hole.” It’s all about the results you’re seeking: getting to your appointment, relaxing with a good meal or being able to teach the courses you’ve always wanted to teach and share your knowledge with others. And it’s about sharing the road with others.
Manage your reputation
Remember that your reputation is important to those who participate in the Sharing Economy, says Adam Spector, CEO of Virtrue, an online identity verification company based in San Francisco.
“The collaborative consumption movement has brought user accountability to services that were previously unable to hold bad actors accountable,” says Spector. Remember that what you say or the way you behave online on one forum or discussion may be accessible to potential customers and while publicity is good, disparaging behavior can undermine a new customer’s impression of your business. “Manage your Google footprint, and remember (if) there is vexing information about you out there that you can’t remove or alter, then be prepared to address this up front in your transactions.”
Need a bike? image is courtesy of Jason Tester.
Swap poster image is courtesy of The Swap Team.