How Local Service Marketplaces Are Bridging the Gap Between Professionals and Consumers

Is this business trend just a fad, or is it something more?
How Local Service Marketplaces Are Bridging the Gap Between Professionals and Consumers
Image credit: Todor Tsvetkov | Getty Images
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A few decades ago, if you wanted to find service providers, artisans, stores and more in your area, your options were limited. You could consult your local phone book (remember those?) or ask friends for advice. That was about it.

The advent of the internet made it a bit easier to locate these businesses near you, but at first, it was still a glorified (albeit digital) phone book.

Similarly, businesses were limited in how they could connect to potential customers. You could advertise or use a door-to-door selling model, but you didn't have a lot of choices.

Local Service Marketplaces (LSMs) like Thumbtack or Home Advisor now seem to be the preferred way to forge a connection between everyday customers and service professionals near them. LSMs integrated into websites and apps allow businesses to list their services and lets customers read reviews, make an informed choice and contact one of those businesses.

It makes sense that LSMs have been growing exponentially, and more people realize the benefits of such marketplaces.

Related: 22 Qualities That Make a Great Leader

Examples of good LSMs

Chances are, if you are a web-savvy consumer, you have used one of these platforms, even if you did not realize it at the time. For instance, Thumbtack and Home Advisor are two of the most popular LSMs in the United States. In India, UrbanClap is leading the LSM industry with over 50,000 trusted professionals and more than a million customers.

However, you might not think of sites like Airbnb and VRBO as LSMs, but they are -- on these sights, customers connect with a very specific type of service provider. Similarly, a service like Uber connects consumers with drivers. It is not a typical LSM, but it's still based on the LSM model. ZocDoc is another where people can seek, learn, and make appointments with local healthcare providers.

The precise nature of these LSMs is important because you cannot find what they offer through a simple Google search. Although searching online may fetch you some results and numbers of local plumbers, the people you find there absolutely won’t come down to your house in ten minutes. LSMs bridge a very clear gap and provide standardized services.

Related: How to Start a Business With (Almost) No Money

Visibility & lead generation for professionals

For business professionals, LSMs are an outstanding way of increasing visibility and lead generation. By using LSMs, service providers can reach a wider audience and that too directly. There are better odds that people will search for a service on a curated platform than elsewhere.

Win-win for professionals and consumers

Thanks to these sites, both service providers and customers can benefit from each other. 

Businesses can advertise special deals that are available only through a certain LSM. Plus, LSMs can process payments for professionals for a small (but worthwhile) fee. Thus, service providers can do great work and leave the financials to someone else.

At the same time, customers enjoy many perks when they use an LSM to find businesses. They can find information, read reviews and book appointments in one location. Some LSMs also allow project bids, list fees and process payments, making the process more transparent.

Initially, a major drawback of LSMs for consumers was the membership fee. However, almost all LSMs are now free to users, as the paid subscription model just wasn't as lucrative as anticipated. Even Angie’s List, one of the first LSMs, dropped its customer subscription fee after 20 years.

Related: 8 Reasons a Powerful Personal Brand Will Make You Successful

Slick user experience (UX)

A distinct benefit LSMs offer over company websites or even a traditional Google search is the user experience or UX. An intuitive, easy to use, well thought out, and sleek UX can be the key determiner of retaining the customers or losing them. For LSMs, a good UX is their key product, and it drives the connection between the customers and the service providers.

Finding the saturation point

With new LSMs coming online every year, the numbers are rising and the specificities are increasing. Now, the situation begs the question -- has the market hit its peak for LSMs? Many of them offer unreliable services and customers can feel (or get) cheated. Also, most professionals just don’t have time to set up profiles on every LSM out there.

A few LSMs will fall by the wayside, but expect those with good UX and product differentiation to stick around. Platforms that actually both consumers and service providers are always going to make a difference.

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