Successful digital marketplaces develop their gravitational pull from network effects. Simply put, this means that the more vendors and resellers join a platform, access to more choices attracts more customers who pull in more product and service providers – and this virtuous circle keeps spiraling outwards.
Clearly, it is critical to ensure that vendors and other partners can join a digital marketplace and become operational as painlessly and quickly as possible. Doing this well can have spectacular results: For example, BT, the UK’s largest telecoms service provider, reduced its average partner onboarding time from six weeks to two days. Streamlined processes and standard APIs are foundational to supporting high degrees of automated self-service for the onboarding itself, and transactions.
Conversely, partners might look elsewhere if the onboarding process is not quick and straightforward. There is a danger of the marketplace losing momentum because network effects work in reverse too. If influential partners and vendors decide it’s easier to do business elsewhere, the marketplace’s appeal diminishes, and customers defect, so other vendors have exposure to fewer customers.
This is why getting it right from the start is critical. Onboarding is not only about admitting a partner or vendor to the digital marketplace ecosystem. It is also about getting the necessary integrations in place so that the partner is up and running quickly and efficiently, without delays and retro-engineering.
But that’s only the beginning. The key reason companies join digital marketplaces is to:
- Shorten the timeline from concept to cash for their product and services
- Short circuit the traditional linear supply chain approach
- Mix and match those products as tailored offers to customers (perhaps with those from others)
- Extend their reach and addressable market in the quickest time possible
Why onboarding counts TWICE
Angela Duckworth’s global best-seller, Grit, describes why effort counts twice: “For talent to become skill, you have to apply yourself. So, talent times effort equals skill; skill is not enough.”
Talent x effort = skill
She adds, “Once you know how to play piano or do math, you have to apply that skill…then you need effort a second time to apply that skill and to create things to achieve things. It's skill times effort that creates human achievement. So…effort counts twice.”
Skill x effort = achievement
Respectfully adapting Professor Duckworth’s formula, onboarding is all about applying talent (a company’s products or services) to the marketplace by joining an e-commerce system.
Products & services x effort = Entering a digital marketplace
Simply joining a digital marketplace is not a guarantee of success. Ensuring the right integrations are done correctly and quickly from inception not only gets someone ‘on’ the market fast, but also massively improves their chances of success because it makes them easy to do business with.
Participating in a digital marketplace x effort = Success at speed and scale
In both these adapted equations, APIs are intrinsic to the ‘effort’ element and can multiply what it achieves massively because they are the most pragmatic, speedy, and economical way to achieve many necessary integrations. This means onboarding is completed quickly and painlessly through standardized and consistently applied APIs.
Ongoing API management means the APIs are replicated and reused at every opportunity, reducing IT costs and minimizing time to market over and over again. They are also centrally managed to ensure they are maintained, applied, and updated in a cohesive, consistent way to present a consistent look and feel of doing business with customers and avoid broken processes, smoothing the path to repeat business and profitable transactions.
Behind the mask
The essence of a digital marketplace is, from the customers’ point of view, to seamlessly blend the attributes and resources of the marketplace with the services and products on offer from the vendors or other partners. That way, the vendors expand their reach rapidly, without high upfront cost, and customers get more choice at the click of a mouse.
Onboarding vendors and partners is a complex business – the trick is to mask the complications and make it easy for them. A good analogy is driving a car – the average motorist doesn’t need or want to know anything about the intricacies of the engine; they just want it to perform as expected, every time.
To hide complexity from vendors and partners during onboarding, the digital marketplace owner needs to:
- Create a single end-to-end experience for those onboarding
- Integrate onboarding steps with internal assets and external systems
- Use simple, uniform application programming interfaces (APIs), applied consistently
- Capture any document as part of the onboarding process
- Enable all participants to see the status of onboarding activities
- Minimize the time spent on manual tasks for onboarding.
Using and reusing standard APIs at every opportunity is arguably the biggest success factor, which is simple to say, but needs centralized structure, management, and governance to leverage and maintain the benefits.
Making things appear simple to ‘onboarders’ and, further down the line, to those onboarded partners’ customers is complex.
The marketplace provider needs to have a really good understanding of the experience of all the platform’s participants – and smooth, properly set up onboarding is foundational to both. Onboarding isn’t just about getting a partner admitted into the ecosystem; it’s about how well it is integrated into the platform, which, in turn, dictates how well it interacts with other participants, as partners for reselling or bundling, and with the end customers.
Other onboarding requirements
The onboarding process must be secure, preferably through integration with a secure platform that validates identities. It must also allow new joiners to customize the onboarding flow and experience without disrupting other parties’ settings and arrangements, supporting different operational and business models and practices.
The vendors’ onboarding teams must be able to collect, upload, and sync documents digitally, and, of course, the time between inception and being ready to trade should be as short as possible. However, this will vary as the platform owner does not control the onboarders’ systems and processes.
In the interests of speed, security, uniformity, and cost – and to avoid the unnecessary expense and learning curve of reinventing the wheel – companies should consider using a tried and trusted platform that can get them started almost immediately.
In the next section, we look at the steps in the onboarding journey.
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