1/ For b2c transaction/mktplace businesses, founders need to understand that $100 order value x 1times/yr is not equal to $10 order value x 10 times/yr. Here’s why.
2/ Large ticket purchases are usually more ‘considered’. Consumers like to wait and think a lot more before large purchases. E.g. if you’re buying a car, you’d want to see it, test drive it. Vs ordering food.
3/ Large tickets create a high friction to transaction – causing more drop offs, bloating CACs and limiting market (CPG cos figured this out with detergent sachets, and SaaS cos abandoned licenses!)
4/ Low transaction frequency = low recall. Very hard to acquire user at the right place at the right time. If someone is buying a house, very hard to target ‘in that moment’
5/ More frequent transactions means more delightful moments for your suppliers. Quicker time to RoI means greater supplier retention. Better retention equals superior service, shorter turnarounds and improving customer experience.
6/ High relevance --> high cross sell --> become a platform. Your could finally get that *coveted* app real estate on the home screen!
7/ So if you're building a new transactions platform, think about 1) what category could give me greatest frequency of transactions? This is likely to be the best point of entry to the market and 2) How could I break up one large ticket to multiple smaller dose transactions.
