Introduction
The online rental market has grown in popularity over the past couple of years. According to the latest report, online rental market revenue grew nearly 37% in 2020, surpassing .5 billion with a compound annual growth rate of 22%. As it continues to grow, it’s important for markets to focus on sales and profitability strategies.
In this article, you’ll learn some of the best strategies to increase your sales and profitability from your online rental marketplace. Keep reading to discover the powerful strategies that will help you get the most out of your online rental market.
Leverage data-driven targeting to acquire new customers
A successful online rental marketplace requires leveraging data-driven targeting to acquire new customers. This involves using tactics such as targeted advertising and marketing campaigns, using digital services such as search engine optimization (SEO) and pay-per-click (PPC) methods. These campaigns help raise awareness and drive traffic to your website.
Tips and tricks:
- Design targeted campaigns based on potential customer demographics, interests and behaviors.
- Advertise your rental marketplace product online on relevant channels, involving mobile, video, social media and display.
- Use data to optimize your campaigns, for example to refine the audience and measure the effects of your tactics.
- Make sure your products and services are easily found and your customers have the information they need to make an informed decision.
Using data-driven targeting can have a huge impact on the success of your online rental market. It allows you to target specific audiences, rather than blindly posting products to a broad audience. This helps ensure that your advertising dollars are used in the most effective and efficient way possible. It also helps establish your brand and increase customer loyalty.
A good example of this is an online vacation rental marketplace that targets people interested in beachfront rentals. By targeting visitors who are already interested in beachfront rentals, the marketer is able create more effective campaigns and increase their chances of success.
Using data-driven targeting can have a positive impact on your sales and profits. After all, you are acquiring more qualified customers for your online rental market. According to HubSpot’s 2019 report, companies that use data-driven target audiences acquire 57% more conversions than those without targeting. For example, if your current conversion rate is 1% and you want to double that rate, you will need to acquire a total of 200 new customers to achieve that goal. Then, assuming each of those customers spends an average of 0, you’ll need to generate ,000 in additional sales to be profitable.
Create a loyalty program to reward existing customers
When you run an online rental market, it is essential to ensure that your customers remain loyal to your service. A loyalty program can be a great way to entice customers to stick with your business because it gives them something to work for, as well as providing rewards for making repeat purchases. Here are some tips and tricks for setting up a loyalty program for your online rental marketplace.
Create clear goals:
When creating a loyalty program for your online rental marketplace, it’s important to provide members with something to work with. This could include offering discounts, free rewards, or other incentives as they make more purchases through your marketplace. Setting clear goals will motivate your customers to make more purchases, which will increase your sales and profits.
Incentivize by rewards:
When creating a loyalty program for your online rental marketplace, it’s important to offer rewards to customers who respect your service. This could include offering discounts, free rentals, additional services or other incentives. This will encourage customers to make more purchases, as they will be rewarded for their loyalty.
Set specific deadlines:
In order to keep customers engaged and motivated to use your service, it is important to set a specific duration for your loyalty program. This could come from a short-term offer of a free rental for a week, or a long-term incentive of a discounted price for six months. By setting specific time limits, it will encourage customers to make more frequent purchases, which will increase sales and profits.
Calculate your costs:
When creating a loyalty program for your online rental marketplace, it’s important to consider the cost associated with loyalty rewards. For example, if you offer a free rental for every 10 rentals purchased, it will cost you to provide this reward. As such, you should always calculate the costs before setting up a loyalty program, to ensure that it is financially viable for your business.
Track your progress:
Once you have a loyalty program in place for your online rental marketplace, it is important to track the progress of your program to gauge its effectiveness. This could include tracking sales numbers, customer feedback, or any other data that allows you to gauge the success of your program. By tracking the progress of your loyalty program, you can identify any areas for improvement and adjust your strategy accordingly.
Calculation example:
If you offer a free rental for every 10 rentals purchased and you have an average of 10 rentals per month, the cost of the reward will be per month. However, if you can increase your sales to an average of 20 rentals per month, the reward cost will be halved to per month. This will lead to increased sales and better profitability in your online rental marketplace.
Provide delivery installation and maintenance services
In an online rental market, providing delivery, installation and maintenance services can be a great way to increase sales and profitability. Product delivery can add an extra layer of convenience for customers and allow them to further personalize their orders. Additionally, installation services can also be provided, allowing customers to have their items quickly and properly installed. This can be essential for items such as appliances, outdoor furniture, and electronics, which may require professional installation. Maintenance services also provide convenience to customers and can extend the life of their items. This can be a great option for premium products with higher price points, as customers may be more likely to invest in a product with additional services in the package.
Example: Financial Impact Suppose a rental market offers delivery and installation services for large electronics at an additional charge of 0. On average, 20 orders will be made that require these services each month. This adds an additional ,000 in revenue to the business each month, which can quickly add to results. Moreover, the labor savings in combination with the additional income can make these services quite profitable.
For a reduced version, maintenance service can be offered at a lower price. This can be a great option for customers looking to extend the life of their purchases and can again help increase profitability while forming a more valued relationship with the customer.
In summary, providing delivery, installation and maintenance services to customers in an online rental marketplace can have a significant impact on sales and profitability. It can add convenience for customers, and the extra revenue and savings can be very beneficial for businesses.
Focus on customer experience when onboarding new users
When it comes to the success of your online rental marketplace, customer experience is key. Investing in your customers’ first sign-on and onboard experience is a key strategy to ensure not only happy customers but also increased sales and profitability.
Tips and tricks:
- Make registration an easy and intuitive process that only asks for the necessary users to facilitate the transaction.
- Develop an integrated survey to gain an understanding of your users’ needs and use it to inform your product features.
- Welcome customers with meaningful follow-up emails or messages.
- Include email templates for customer service to ensure quality interactions.
- Use online chat to engage with customers quickly and easily.
- Adapt user experiences to increase customer satisfaction.
Investing in customer experience can lead to increased customer satisfaction, returning customers and referrals, ultimately leading to increased sales and profitability. For example, if your online rental marketplace has 1000 total customers and you increase your customer satisfaction rating from 4 out of 5 stars to 4.5 out of 5 stars, you can expect to increase your monthly sales by 5 %. Assuming your monthly revenue is ,000, this would result in an additional ,500 in monthly revenue and potentially higher annual profits.
Focus on customer retention and incentive referrals
Customer retention is critical to the success of any online rental marketplace, both in terms of incremental revenue and profitability. Studies have shown that increasing customer retention by 5% often leads to a 25-95% increase in profits . So, it’s important to focus on loyalty programs, discounts, and exclusive offers for your current customers that will help them retain and keep them engaged.
In addition to customer retention, incentivized referral programs are also essential for increasing sales and profits. Studies have shown that referral programs generate an average of 25-40% of total sales , and it’s even higher in some industries. As such, you should focus on developing a referral program for your online rental marketplace that rewards the referrer and new customer for successful referrals.
When it comes to implementing either strategy, it pays to be creative and think outside the box. For customer retention, focus on highly valuable rewards for your customers – such as exclusive discounts, access to special features, or complementary gift cards. You can also try creating a loyalty program where customers earn points or other rewards based on their activity.
As for referral programs, consider offering not only discounts, but also rewards such as free shipping, free rental items, or free subscriptions. This will encourage both existing and new customers to take advantage of your referral program and help you generate more sales.
In most cases, these strategies have a positive impact on sales and profitability. Let’s say your online rental market has 1000 customers and 10% of them make a monthly purchase of on average. If you’re able to increase retention rates by 5%, you’ll see 50 more customers make a purchase per month, resulting in a ,500 increase in monthly revenue . If you add a successful referral program into the mix, that could result in 250 additional customers making in purchases every month – leading to a ,500 increase in sales and a ,000 increase in profits .
Conclusion
When it comes to increasing your sales and profitability in the online rental market, there are a number of strategies you can employ. Leverage data-driven targeting to acquire new customers, create a loyalty program to reward existing customers, provide delivery, installation, and maintenance services, and focus on customer experience when onboarding new users can all have a major impact on your business. Additionally, using automated marketing campaigns, expanding your reach and awareness through paid advertising, and creating content for potential buyers can also help increase your sales and profitability.
Finally, leveraging influencer marketing to reach new audiences and focusing on customer retention and incentivizing referrals can give you the edge you need to succeed. With the right strategies and tactics in place, you can maximize the potential of your online rental market and increase sales and profitability.