3 Experiments: Insights from HomeLight, TikTok and a $4B Marketplace

Today, we're unveiling three experiments conducted by HomeLight, TikTok and a thriving $4 billion marketplace. 

Experiment 1: HomeLight's 15-20% Revenue Boost through Text Communication

Applicable in: Marketplace, SaaS

Problem: HomeLight, a marketplace for buying and selling homes, sought to increase the number of real estate transactions on its platform. It qualifies clients who want to buy/sell a property. With those qualified leads, they will then share those leads with real estate agents, who will in turn try to close the transaction. Thus speed to contact is a leading indicator to the agent getting a meeting with the client, leading to more revenue for everyone.

Old Solution:
In the current solution, HomeLight qualifies a home buyer or seller over text or a phone call. Once qualified, the lead is sent to the real estate agent via email, text, and push. However, the client may not pick up immediately from just a phone call, especially if they were initially qualified over text. They would know who the number is from. As is typical for many of us, clients may ignore unknown numbers through spam apps, phone settings, phone focus modes, or just manually send to Voicemail. 

Because of this, agents would have trouble getting connected with the client and often would be ignored for hours and only leave a Voicemail (which may or may not be checked). This would have a major impact on speed-to-lead for the agent, and their conversion in connecting and scheduling a meeting with the client to buy/sell a home. 

New Solution: 

Gaurav and his product team implemented a great idea – they facilitated conversations between clients and agents through a text vs waiting for agents to initiate the conversation. 

Now when an agent looks to claim a lead from HomeLight and the client is qualified over text, they are asked to send their first text through HomeLight’s system to set the stage for their call with the client (Example FAQ). 

The new UX was better for all stakeholders:  

• Clients have context on agents contacting them and getting answers quickly. 

• Real Estate Agents have a way of establishing trust with clients before calling, therefore connecting and nurturing clients faster over both text and calling.

Impact: 

This simple change resulted in a 20%+ increase in revenue in this segment. The impact was significant, and it only required one month of engineering effort.

Learnings: 

For marketplaces aiming to connect two parties efficiently, prioritizing the speed to connect can dramatically increase transaction rates. Furthermore, text communication proved invaluable in the connection flow to set the stage for a phone call with clients, especially for on-the-go professionals like real estate agents.

Experiment 2: TikTok's 25% Increase in Creator Enrollment for Creating high-quality long-form Content

Applicable for: Social, Marketplace, Creator Economy, Fintech

Problem: TikTok aimed to encourage more creators with a minimal number of followers (ex: 10k+) to produce long-form, high-quality content within its revenue-sharing model. However, the enrollment rate for this program fell short of expectations. Creators had to complete the KYC (Know Your Customer) process, including connecting their bank accounts, to receive revenue from content engagement.

Old Solution: Creators on TikTok were initially required to connect their bank accounts to begin creating content. Collecting this information upfront led to a 40% drop-off in enrollment.
Funnel: receive notification / email / push → go in app → Creator tools → creator program beta → application (ID, payment, etc.) → wait 3 days to get approved → eligible to make content → make content → get paid

New Solution: TikTok adopted a bold approach. Creators were now allowed to begin creating content without the need to connect their bank accounts. Revenue was generated based on a variety of factors including qualified video views, and TikTok informed creators of their earnings. To claim their earnings, they had to connect their bank accounts. This change, allowing content creation before bank account connection, resulted in a remarkable 25% increase in creators enrolling in the program.
New Funnel(skipping 2 steps): receive notification / email / push → go in app → creator tool beta in app → application (ID, payment, etc.) → wait 3 days → eligible to make content → make content → get paid

Learnings: TikTok used the incentive of actual revenue to motivate creators to connect their bank accounts successfully. This approach proved effective in increasing enrollment because at this point Tiktok had built up trust with the creator.

As a follow-up phase, incorporating a time limit, such as "claim your $56 within 5 days," heightened the sense of urgency in the process.

Experiment 3: Adding a "Risk-Free" Boosts Checkout by 5%

Applicable for: B2B, SaaS, PLG SaaS

Problem: An SMB SaaS company sought to increase the number of new paying users. The customer segment was price-sensitive and hesitant to try new software.

Old Solution: Customers in this segment were reluctant to commit due to the perceived risk of not finding value after purchase.

New Solution: The Product Growth team introduced a "Risk-Free" experiment, allowing customers to cancel their purchase within 24 hours. This concept drew inspiration from the travel industry's practice of booking flights and hotels with the option to cancel within 24 hours.

How to Apply it to Free Trial Products: To boost the number of free trials, incorporate "Risk-Free for X Days" above the purchase call-to-action on the pricing page or the main landing page. Here, the ‘X’ represents the duration of your free trial.

Impact: The company experienced a 5%+ increase in conversion rate, all without any additional engineering work.

Learnings:

1. In your sales funnel, there will always be hesitant individuals. Create incentives that make it easier for users to give your product a try. As they begin to experience value, they're more inclined to stay with your service.

2. Moreover, when offering something free, like a trial, make sure your end users understand that it is genuinely $0 and entirely risk-free to try your product.

Share your thoughts, feedback, or your own experiments in the comments section. 🚀

If you found this post valuable, consider sharing it with someone who can benefit from these insights. Your support means the world to us. 🙏