An On-Demand Home Services App isn’t simply a convenient tool for ordering plumbers, cleaners, electricians or handymen. The major challenge for startups becomes much simpler – how to earn money from the platform.
A well-structured On-Demand Home Services App can monetize through various channels not limiting itself to service booking. Commissions, subscriptions, featured listings and premium services the appropriate monetization strategy can help the business to grow.
It is important to develop a Home Services Business Model which would be beneficial for all stakeholders, customers, service providers and the platform itself. Here we’ll look at 10 efficient revenue streams which would help to convert an On-Demand Service Marketplace into a sustainable business.
Why does an On-Demand Home Services App Need Several Revenue Streams?
A single income channel may not give you a clear and reliable way to earn from the app. An On-Demand Home Services App can become even more profitable combining different monetization schemes for its customers, service providers and business partners.
The value of services can greatly differ. While simple cleaning booking gives a small transaction fee, a renovation or repair job may be worth a much higher amount. Moreover, demands can be changed due to seasonality, geography and customer preferences.
Thus, the multi-service app revenue model is very useful for the business. Apart from commissions for booking, there are several ways to earn money from the customers using their value.
1. Earn from the Service Provider Commission
A Service Provider Commission is the most popular type of income model for an on-demand platform. The platform receives a portion of the transaction or fixed amount when a customer completes the booking process. The percentage of the commission may differ depending on the type of service or agreement with the provider. But businesses should be clear and transparent so that the providers know what charges the platform takes and what their earnings are.
2. Service Provider Subscriptions
Subscription plans can generate regular revenue and provide value for service providers. In other words, it would strengthen the Home Services App Monetization since the business would get income independently from the bookings. But providers should get some additional value for money.
3. Featured Listings for Improved Visibility
In case of competition, service providers can hardly differentiate themselves on the platform. The featured listings give providers or businesses the possibility to pay extra for better visibility within certain categories of services.
Featured listings can become another source of income for the Multi-Service App Revenue Model without increasing the price for each booking. Again, it is important to keep transparency so that customers would still be able to make their decisions.
4. Introduce Customer Convenience/Platform Fee
A small fee or commission can cover the costs of running an On-Demand Service Marketplace. The fee would be displayed when a customer makes the payment. It is vital to stay transparent and inform customers about any fees in advance so that they wouldn’t feel unpleasant surprises at checkout.
5. Create Customer Membership Plans
Membership plans can motivate customers to use the service more often and provide regular income for the company. The plans may include:
- Discounts for the platform
- Priorities during booking
- Additional bonuses
- Exclusive offers
- Faster customer support
It could be highly efficient for customers that order cleaning, maintenance, beauty, or repair services on a regular basis. In this case, membership is one of the effective means to transform occasional users into loyal clients for an On-Demand Home Services App.
6. Monetize By Charging Service Provider Lead Fees
There could be some service providers who will find it better to pay for qualified leads rather than subscribing to the site. Thus, for instance, there is a client who needs air conditioner repair. The platform finds the right professionals that could charge lead fees for access to verified customer requests or submit their offers. It would be highly effective in case of services that include:
- Home renovation
- Interior services
- Painting services
- Big repairs
It is one more monetizing tool for a Home Services App.
7. Generate Revenue from Advertising and Partnerships
A Home Services Marketplace could generate some income with the help of relevant partnerships. The platform can collaborate with those businesses that target the same market (customers or service providers). Such potential partners might be:
- Appliances manufacturers
- Companies that specialize in home improvement
- Insurance companies
- Hardware companies
- Cleaning product companies
For instance, some appliance companies can promote maintenance services. Hardware companies could want to reach professionals that use the platform. Partnerships could improve Home Services Business Model, however, advertising has to be relevant and it should not negatively influence the user experience.
8. Provide Premium Business Tools for Service Providers
An app could provide more than just booking options for providers. They could need some premium business tools such as:
- Performance reports
- Customer insights
- Automatic scheduling
- Staff management
- Digital invoicing
- Income reports
- Marketing tools
It could create an additional stream of income while providing service providers with useful options. When professionals use the platform to manage their business, they have more reason to use it.
9. Implement Fair Cancellation or No-Shows Policies
Late cancellations can be detrimental for the providers because they will have to cancel their appointments or will travel in vain. In this case, the clear cancellation or no-show policy could help to establish a fair system. According to the business model, applicable charges could compensate service providers and help to maintain the platform. However, this policy should be transparent. Customers should know about the rules before accepting a booking.
10. Create Corporate and Bulk Services Packages
Not only individuals may become sources of revenue. There may be some corporations and organizations that need some recurring maintenance and professional services.
The app will be able to provide custom packages for cleaning, maintenance, repair, and facilities services. Such B2B agreements can produce bigger deals compared to individual bookings. For an On-Demand Home Services App, corporate packages can provide an opportunity to increase revenue and become less dependent on daily demand.
Conclusion
To create a successful On-Demand Home Services App, not only a good booking process is required but also a well-designed and versatile strategy for generating income.
Service provider commission, subscriptions, premium membership, advertisements, business services, and corporate packages are just a few different approaches that can be used for earning money. The best Home Services Business Model will not try to charge all its customers and providers for all things. Instead, it will create many opportunities while providing its customers and service providers with value. Start with something simple, study how your marketplace works, and add extra revenues as you progress.
FAQs
1. What type of revenue model should I choose for a new home services marketplace?
A service provider commission model can be a great choice since the platform earns when completed services provide value to its users. However, it depends on your market and provider network.
2. Is it possible to use several monetization models in my app?
Yes, many marketplaces use service provider commission, subscriptions, featured listings, convenience fees, and premium features.
3. Will charging service providers decrease providers’ activity in the marketplace?
Yes, it can if the providers do not see enough benefits. Proper pricing, good leads of customers, useful tools, and convenient payments can attract service providers.
4. Can an On-Demand Home Services App earn money from B2B customers?
Yes, some corporations and organizations can require some recurring maintenance and home services.
Chirag Darji is the CEO of V3Cube, specializing in building on-demand mobile apps and providing mobility solutions for companies around the world. With extensive experience in strategic planning and innovation, he helps entrepreneurs worldwide launch, scale up, and grow successful digital businesses.