Strategic Coupon Allocation for Increasing Providers' Sales Experiences in Two-sided Marketplaces

TL;DR

This paper presents a personalized coupon allocation strategy in two-sided marketplaces to increase the number of providers with sales experiences, thereby enhancing platform competitiveness and provider retention.

Contribution

It introduces a new provider management perspective focusing on sales experience distribution and proposes an optimization method for personalized promotion strategies.

Findings

Coupon allocation strategies significantly increase providers' sales experiences.

The method ensures fair opportunities for all providers to achieve sales.

Experimental results confirm the effectiveness of the proposed approach.

Abstract

In a two-sided marketplace, network effects are crucial for competitiveness, and platforms need to retain users through advanced customer relationship management as much as possible. Maintaining numerous providers' stable and active presence on the platform is highly important to enhance the marketplace's scale and diversity. The strongest motivation for providers to continue using the platform is to realize actual profits through sales. Then, we propose a personalized promotion to increase the number of successful providers with sales experiences on the platform. The main contributions of our research are twofold. First, we introduce a new perspective in provider management with the distribution of successful sales experiences. Second, we propose a personalized promotion optimization method to maximize the number of providers' sales experiences. By utilizing this approach, we ensure equal opportunities for providers to experience sales without being monopolized by a few providers. Through experiments using actual data on coupon distribution, we confirm that our method enables the implementation of coupon allocation strategies that significantly increase the total number of providers having sales experiences.