Ten Rules of Building Successful On-Demand Service Apps

Today, we spend a significant part of our lives on smartphones. No, we don't talk about teenagers who cannot go five minutes without updating their Facebook status or posting a photo, video or story to Instagram. And no, we don't mean game addicts who spend hours playing games online. We are talking about businessmen, students, office workers, doctors, housewives, sales managers, aircraft pilots, cooks… People like you and me who use their smartphones for dozens of tasks every day.

We use mobile applications to schedule time, plan goals, manage bank accounts, send e-mails and messages, solve business issues, do shopping, count calories, learn languages – you name it. Nowadays, there is a mobile application virtually for anything. Among this variety, there is a category which is becoming increasingly popular – on-demand service applications. But what is an on-demand service app and how is it different from dozens of other software types out there?

If asked to describe on-demand service apps in one sentence, we would say that they sell time. They take over some small tasks which we either forget to do, have no time to do right now or would just wish to offload on somebody else. You can love cooking and sometimes spend hours looking for recipes, shopping for ingredients and, finally, creating a wonderful, delicious meal for your family. However, if you are late from work and had a flat tire on the way home, you will have no time or energy to cook. There are still several options – grabbing a takeaway dinner in the nearest fast food restaurant, eating out or ordering a decent, nutritious meal through a mobile app. If you order a meal to be delivered to your house, you will get a full healthy dinner for the whole family for less than the price asked at a restaurant with absolutely zero time spent. Let someone else do the cooking and enjoy a peaceful hassle-free dinner at home.

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[Image source: GrubHub]

Meal delivery is by far not the only service on-demand apps can do for you. Walking your dog, parking your car, doing your laundry, delivering your packages – these are just a few things which come to mind. The specific of on-demand apps is that they don't require any strong commitment from you – they are just there when you need them. Their main function is finding a service provider close to you within the shortest time. They charge on the pay-as-you-go basis without any subscriptions or plans.

From the business point of view, creating an on-demand service app is a great startup idea. Just look around and find something that people do often. Maybe, you can turn it into a service?

However, even if it seems quite simple and straightforward, development of an on-demand service app requires careful preparation, thorough discussion, and smooth performance. The problem has two sides – organizing the actual service and creating the application, and you have to do your best in both aspects. You will have exactly one chance with each of your customers-to-be. A confused business lady won't spend too much time figuring out a cumbersome beauty application when she urgently needs to get her hair done for an important dinner. She will just find another one with a friendly interface and intuitive navigation. So, we have come to the important question – what is the strategy of building a successful on-demand service application? – Let's draft a comprehensive business strategy together.


1. Select the service you are going to offer

What are the most common business niches which you can offer on-demand services in? The first one to come to mind is, of course, taxi service and Uber in particular. Yes, the general idea is that Uber was the father of all on-demand service applications. If you Google into the subject, you will come across such phrases as «Uber-like beauty application», «Uber for dry cleaning» and even «Uberification». Indeed, Uber was the first application showing available taxis close to you when you urgently needed a taxi ride. The concept has spawned hundreds of other users of on-demand service applications:

  • Delivery services, including food, liquors, flowers, personal packages, etc.
  • Beauty services
  • Dog walking
  • Health services, such as doctor appointments, remote consultations, house visit arrangements
  • Household services, for example, laundry, dry cleaning, house cleaning and decoration
  • Sport and fitness, finding available groups and coaches according to your preferences
  • Car parking
  • Errands

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[Image source: TheStylisted, Inc.]

This is just a short list of services which can be offered on demand via a mobile application. Usually, on-demand services are focused on one industry only with apps combining several services being very rare. However, if you can find reliable providers and create smart service packages – why not? You can, for example, offer specialized medical consultation or doctors' appointments as your main service and also provide with taxi transport to and from a hospital.

2. Make Sure Your Service is Solving an Actual Problem

This can be a tough one, as sometimes the service you offer may be something people don't want. For example, offering to walk dogs in a green, peaceful area where the majority of residents are retired people is probably not the best idea. Your prospective customers will prefer to walk their dogs themselves because for them it is not a chore – it is an exercise, a possibility to socialize with other people, a time well-spent. On the contrary, busy office workers living in apartment buildings will appreciate if someone else took their pets out on weekdays when they are late from work and the nearest park is three blocks away.

3. Do a Market Research and Analysis

A thorough market research, both primary and secondary, can help you make the grade with the service you are planning to start. Find other on-demand service providers on the outskirts you plan to work in. The analysis of the existing on-demand services will give you an idea of what is popular and what is not, what is offered in abundance and what is hard to find. Besides, this way you may also find the right range of prices, so that not to be too much below or above your competitors.

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4. Engage Reliable Service Providers

Your entire business centers around service providers – no matter what type of service you offer, you will be only as good as people who actually do the work. Find enough providers to cover the demand and to be able to serve the entire geographic area which you plan to operate in. Offer attractive terms and conditions to your providers, but don't forget about the rating. Your customers should be able to rate the service level they have experienced simultaneously bumping the best service providers to the top of the list and increasing their chances of getting further orders. As a separate feature, add customer feedback section for people to describe their impression of the service they've received.


[Image source: iMore]

Another channel of engaging service providers with simultaneous expansion of your customer base is cooperation with retail businesses. They already have their loyal customers which they can bring to you. Offer a similar service that people are accustomed to, but bring it to their doorstep and at a slightly lower price. You will kill two birds with one stone – getting both the providers and the customers with the hard work of finding customers done by your retail partners.

5. Set Reasonable Prices

The price of your services should be a balance between the absolute minimum, which is free of charge, and the average price for the same service by regular providers. Besides time, your price is another factor which should persuade customers to opt for your service over others.

At the same time, don't forget the incentives for your top contractors. You have been lucky to get professionals doing high-class work and making your customers come back to you again and again – then make your providers feel valued and respected. These investments will surely pay back, as quality service will attract more clients.


[Image source: Wag]

6. Start with an MVP

The analysis of the Minimum Viable Product will show whether you are generally going in the right direction. With an MVP, you will be able to evaluate your prospective business opportunities at minimum investment. Do a really cool landing page with a link to your price list and see how many clicks and sign-ups you are getting. You can even do a bit of the «Wizard of Oz» act doing the service manually to estimate the demand before you actually add the technology.

Related story: Workable Strategies for Engaging Your App Users


[Image source: Netflix]

7. Support Convenient Registration

Even though your service requires no commitment from your customers, still, registration is needed for user profiles, rating, personalization, etc. Add an easy and straightforward registration functionality, preferably, also supporting registration/login with social media accounts. The registration page is the first thing your customers see when they try your app, so make it as user-friendly as possible.

And, of course, don't forget the registration form for your new providers. If you want your service to grow, you need to have enough professionals to meet the increasing demand.

8. Add Geolocation

Accurate geolocation is a very important feature of an on-demand service app. The main emphasis within your service is the time it can save your customers, so service provider has to be geographically close. The customers need to see where their provider is and how long it will take him to arrive. And in the delivery and transportation services, geolocation is a must-have to allow specifying pickup locations and destinations. Besides, customers love watching their taxi approach on the map. So, make sure you include geolocation in your on-demand service app development plan.


[Image source: Uber]

9. Include Easy and Reliable Payment System

Of course, since you are providing paid services, you have to provide payment options. People tend to be extra careful when it concerns their money or identity, so make sure that your payment system is as transparent and secure as you can get. The best option would be to use one of the well-reputed services, such as PayPal, Stripe or Braintree via an API, or to include a secure credit card payment engine with multifactor authentication.

10. Use Advanced Technology

This point is the last on our list but, in fact, it may be one of the most important things you should consider if you want to create a truly successful on-demand service app. We have already mentioned geolocation, payment engines and easy registration as the convenient elements which make your service attractive to customers, but your application must be generally usable, reliable and available. A good application must sit on a solid technological foundation. Choose adequate tools and environments both for your frontend and backend to ensure proper performance of your application, scalability, and security. Try to estimate and forecast the demand peaks and provide sufficient resources to manage the increased load. There are various cloud-based solutions which can serve this purpose while keeping your on-demand app cost at a reasonable level.

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As a bottom line, we would like to repeat that developing an on-demand application is a great startup idea. Today's world is rushing forward at a dizzying speed leaving us very little time for everyday chores. Having other people do the things for which we have no time can bring genuine comfort and peace of mind – the work is done, no time or effort is spent and, what is absolutely priceless, we feel no guilt or anger at ourselves for “poor time management”. This is why on-demand services are on the rise now and why this market offers tremendous business opportunities. You can start a small local business and, of course, if you have done your homework properly and developed your product with care and attention to details, you will soon be able to expand further. The famous Uber that has started the concept of mobile on-demand service applications has begun with offering premium class cars in just a few areas of the US. Now it is a global company present in 632 cities worldwide and worth $70 billion. Not every company can grow to Uber's scale, but if your business brings you profit, if your partners and customers are satisfied and if it makes you happy – isn't this the definition of success?
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