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Four Customer Acquisition Strategies in the Sharing Economy

Shareable
Shareable | Wednesday February 27th, 2013 | 1 Comment

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customer parkingBy Neal Gorenflo

So you’ve built a sharing economy service. You’re ready to take it to market. But who should you start marketing it to first? Where to start?

Every business needs to start somewhere. Amazon started by selling computer books to IT professionals. eBay started by helping collectors sell collectibles. The short-lived social network Tribe started by connecting people in the Burning Man community.

A business’ initial market is often called a beachhead market. It’s where you start. If you pick well, you can expand quickly like Amazon and eBay did to other communities and categories. If you pick poorly like Tribe, you’re dead.

The type of asset you’re helping people share will often make the choice of beachhead market easy. If you’re helping people share boats like Cruzin, then you know that outreach in marinas will be important. Sometimes, however, the choice isn’t so clear. Below are four beachheads where other sharing companies have had success. One or more might be right for you.

College campuses

For better or worse, a lot of marketing happens on college campuses. The high concentration of young, open-minded adults in beginning stages of forging an independent life makes them extraordinarily attractive to marketers. It’s also a place where a lot of sharing already happens. In fact, communal living is what makes the campus life so thoroughly fun.

So it should be no surprise that a number sharing economy companies have jumpstarted their success on college campuses. Zimride is a perfect example. John Zimmer, co-founder of Zimride, enlisted some of their first student users at his alma mater, Cornell University. At first, the administration would not promote the service. Then he hatched the idea to sell colleges a private, white-label ridesharing service. The added trust and security of a private service appealed to Cornell and other colleges.

Importantly, colleges were willing to pay around $10,000 a year for the service. Zimride was off to the races. After selling the service to scores of colleges, Zimride expanded into the corporate market, then launched a city-to-city service. Their most recent product is a real-time urban ridesharing service, Lyft.

Coworking spaces

The idea for a shared workspace for independent workers was first manifested in San Francisco in 2005 with the founding of The Hat Factory. Since then, coworking has boomed. According to Deskmag, there are an estimated 2072 coworking spaces worldwide, up over 245 percent in two years. Like college campuses, coworking spaces are places where people gather to share.

They also are attracting attention of sharing entrepreneurs as places to get their first customers. Enter Scoot Networks. Scoot is the Zipcar of electric scooters. They officially launched their service in September of 2012. Scoot was incubated at GreenStart, but shortly thereafter joined HUB SoMa, coworking to build a team and pilot their service.

Scoot took full advantage of marketing opportunities through the HUB during their pilot. The team sat at the same desk almost every day near the entrance to the space all decked out in their logo jackets, a brilliant form of free advertising. They recruited their first customers there, gave trainings, and stored their shared helmets in cubbies in the back of the space. The last time I spoke to Michael Keating, the founder and CEO of Scoot, he said this strategy worked so well his next move was to expand to other coworking spaces.

Cities

As Lisa Gansky, author of The Mesh, would say, cities are the ultimate platforms for sharing. From the streets and sidewalks to public transportation and parks to a shared identity and culture, much of what defines city life is what’s shared. The high population density also makes sharing necessary as well as more convenient than in ‘burbs or rural areas.

Car sharing could not have started anywhere else but cities. Traditional, fleet-based car sharing is capital intensive. To justify the expense of owning and maintaining a fleet of cars, high utilization is necessary. Traditional car sharing companies need at least six hours of use per car per day to be profitable. That’s only possible if a large number of members are close by. This is why Zipcar, the world’s largest car sharing service, has placed a large majority of cars in urban cores where they’re accessible to over 10 million people within a 10 minute walk. Car sharing exemplifies why sharing is cost effective and convenient in cities.

Social media

Sharing services are the next evolutionary step from social media. Conceptually speaking, there’s not a big difference between sharing a YouTube video and using an online service to share a car. Many of the same product features used in social media are used by sharing companies – profiles, reviews, rankings, collections, wish lists, and more. This is undoubtedly deliberate. These similarities make their services familiar to social media users, which now number in the billions. Familiarity helps entice prospective customers to become users.

Airbnb is the master here. Their brand could be easily mistaken for a social media brand. Like social media leaders, their brand values are hip and youthful. In fact, Airbnb’s recent site redesign is eerily reminiscent of Pinterest with their collections and big, high quality photos of accommodations.

Not to mention that all of the leading services built a significant portion of their initial audiences on Twitter and Facebook. Social media is perfect for attracting the early “beta” users needed to get feedback and improve offerings.

Some have used social media more strategically. For instance, Zipcar’s Low-Car Diet challenge, in which participants pledged to give up their personal cars for 30 days, was tailor made to be blogged, YouTubed, and tweeted. It was so successful in creating buzz, they ran the challenge in the four years before selling to the company to Avis in 2012.

These are four important beachhead markets for sharing services. What would you add to my thoughts and this list?

[Image credit: Lulu Vision, Flickr]


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  • Harris Loeser

    Profit motive and (clever) incentives are key to growing P2P industries with realistic cost of customer acquisition.

    For example, in car sharing, there is marketing to car owners and car renters. A very good situation exists when a car owner also has the motivation, skill, energy and incentive to market their own car to their (carless) neighbors.

    Assume that those “super owners” are 10 per cent of all carsharing owners. Their incentive to market their own cars is high utilization and revenue from their own cars. It seems to me that with individual promo codes and minimal revenue overrides or spiffs, some of those “super owners” will also fill other available cars on their turf at low cost of customer acquisition.

    Are you listening Wheelz, Relayrides & Getaround?