I have been a passionate follower of the penny auction market for a few years now. First coming to know them in the heydays of Swoopo, I was immediately hooked.
However what I have failed to see, is one site absolutely dominate, clean out and become universally know. In the UK, the closest company to that is MadBid and when I asked my internet savvy friends if they have heard of MadBid, most just looked at me blankly and shook their head.
In a age were the remote gambling and e-commerce sector is undergoing dramatic expansion, Penny Auctions should be riding this wave of growth, but what we see instead is sites either clinging on with the tightest of profit margins or getting in and out of the market fast, some even revert to dubious practices in order to remain competitive.
It is well documented that the underlying stop gap, the issue that is threatening PA's competitiveness is customer retention.
Central to customer retention is trust and many consumers still see the Penny Auction market as a cowboy industry. They are worried they are being jibbed or auctions are being artificially inflated and flee the service permanently. This can blamed somewhat on the numerous number of criminal sites looking to make a cheap buck but things need to change, and they need to change fast.
Customer retention is key and no Penny Auction site has come close to the rates bingo sites or slot machines are achieving.
How can we win consumers trust back?
Do penny auction sites need to be regulated to be trusted?
Is there any stamp of approval Penny Auction Sites can display to prove they are legitimacy?
Is their a model that is more transparent?
If the odds were fairer, would it solve the issue or just reduce profit margins?
I am keen to get your thoughts.
I have been mulling these questions over for some time now and recently launched an attempt to try and fix some of these issues. The concept's aim is to take the PA idea and turn it on it's head. It retains the excitement of purchasing high value items at negligible prices, but makes it fairer and more transparent. Although it's early doors and the site needs a bit of a make over, I am getting some encouraging results come through. Please take a look at squaremarket.com and let me know what you think.