In marketplace models, it's consumers first, customers second

In marketplace businesses, distinguishing between customers and consumers is vital. While the two may be identical in some business models, in many cases, especially in marketplaces, they may be distinct. Understanding this dynamic is crucial for creating value, as the primary objective of serving direct customers often hinges on effectively catering to the consumer experience.

At Weedmaps, dispensaries represented the direct customers, paying for leads and increased exposure to their end users – the consumers. These consumers, not directly contributing to Weedmaps' revenue, were distinct from the customers. The dispensaries’ success, which was pivotal for Weedmaps, depended largely on engaging these consumers. However, discussions with dispensaries often centered around their spoken concerns, such as visibility on the platform, rather than their unspoken need – acquiring more leads. This focus on addressing the immediate needs of the dispensaries meant Weedmaps inadvertently overlooked optimizing the consumer experience, contributing to a decline in user engagement.

This situation at Weedmaps called for a strategic shift. Realizing that the dispensaries’ ultimate goal was to attract consumers, it became clear that prioritizing the needs of these end users was essential. By enhancing the consumer experience on the platform, Weedmaps could indirectly meet the dispensaries' goals, thus enriching the value proposition for both parties.

Weedmaps' strategy needed a rebalancing, moving away from a sole focus on backend features or visibility enhancements for dispensaries. A more consumer-centric approach, aimed at improving the overall consumer experience, would have been more effective for the platform's long-term sustainability and would ensure value for both dispensaries and consumers.

Weedmaps’ experience highlights the importance of aligning product development strategies to cater to both customers (in this case, dispensaries) and end consumers. Understanding and meeting the needs of consumers can indirectly but significantly satisfy the requirements of direct customers. This dual focus is crucial for the long-term success of marketplace businesses, but I would argue it needs to be consumers first, customers second. The key takeaway is clear: regardless of who the direct customer is, prioritizing consumer needs is essential for initiating and sustaining transactions in a marketplace.