AirBnb, GoCarShare, and YourParkingSpace are all examples of popular “collaborative consumption businesses” that give consumers the benefits of temporary ownership while reducing personal burden and cost. A key part of this business model is that the business itself doesn’t actually own any resources; it is simply redistributing resources within a community to better meet a need. AirBnb, for example, offers more than 800,000 listings in 190 countries without actually owning any of these listings (or even personally managing upkeep). Unlike other businesses in the sharing economy that actually own the physical resources being shared – Netflix owns DVDs, Car2Go owns cars, for example – these businesses don’t.

This lack of ownership is a Catch-22: for companies like AirBnb, not having to own or maintain rental property is the very essence of why the business is so effective. But the lack of a physical resource to provide from day one, also means that collaborative consumption businesses face two major challenges: (1) acquiring providers and (2) acquiring consumers, both of whom are ultimately the business’s customers. Smart content marketing and social media outreach is key to addressing this major marketing challenge and overcoming hurdles that can stop early adoption dead in its tracks.

  1. Build trust with testimonials. Admit it: the first time you heard about renting a room from a total stranger you thought, “Well, this won’t end well!” For many of us, using AirBnb is now commonplace, but getting over that initial hump (showing up in a stranger’s home to stay for a few days or handing your own house keys over to someone you’d never met) is inherently a risky activity. Testimonials mitigate this risk. Just ask Harrison Woods, the Managing Director for YourParkingSpace.“Affordable parking is nearly impossible to find in London,” says Woods. “We wanted to apply the same concept of a temporary flat share to parking. If you have a space and don’t use it, why not see if someone needs it for the day? Even though the risk in letting a parking space is less than letting a home, it’s still there. We found that customer testimonials were key to building trust on either side of the equation.”
  2. Build organic word-of-mouth referrals. Once you’ve started building a customer base, it’s time to get the word out over social media. Don’t assume word-of-mouth will happen organically; successful word-of-mouth marketing requires smart strategic planning from day one. Target influencers for your key demographics along with your existing customer base. In the case of YourParkingSpace, Mr. Woods says his company focused on their customer base, identifying regular customers who were either letting out their space or regularly booking and parking in other spaces.“Building word-of-mouth can be as simple as motivating early users to like your brand page on Facebook and then post about their experience,” says Woods. “The key is to open up dialogue by engaging with your top customers in a meaningful way from day one.”Another way to encourage word-of-mouth is to offer some type of rewards system for any referrals that are given by current users. ReferralCandy offers a way to create and seamlessly add this referral rewards system to an online storefront or app. Being able to automate this process provides an easy way to market the collaborative consumption business while also tracking the results of these marketing efforts.
  3. Incentivize early participation with free trials. How do you get those first 500, 1,000 or 10,000 folks to rent their homes, cars or parking spaces? Your solution: free trials. Sharing economy companies like Uber, TaskRabbit and YourParkingSpace have all mastered this simple strategy. “As soon as a customer signs up or completes their first space rental, we send them a unique code they can use to refer other customers,” says Woods. “Since the referral is coming from a friend or colleague, there’s inherently a level of built-in trust, in addition to organic word-of-mouth. Plus, everyone is incentivized to participate since the referee receives a bonus offer when the person they referred joins.”

Bottom line:

Collaborative consumption gives people the temporary benefits of ownership while reducing personal burden and, in many cases, lowering environmental impact. And while the idea of collaborative consumption is popular in theory, getting people on board with collaborative consumption in reality isn’t always easy. Companies like the aforementioned are paving the way by changing how we think about ownership and resource consumption. Have a great business idea for the sharing economy? Strategic content marketing and social media outreach from day one can help you build a robust customer base of providers and consumers.