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August 7, 2011, 5:58 am UTC
The success of the no-frills classified portal offers some invaluable lessons in branding and success
In today’s world where almost every company wants more profits and to perennially expand, this company is a study in contrast. Not many in India perhaps have heard of it but with just 32 employees this web portal offers its services in close to 600 cities in over 50 different countries. The company in question is Craigslist a centralized network of online communities featuring free online classified advertisements with sections devoted to different subjects.
Craigslist began rather innocuously in 1995 when a computer programmer Craig Newmark began an email distribution list for friends featuring local events in the San Francisco Bay Area. The service became web based in 1996 and expanded to other classified categories in the same year.
Today, the site serves over 20 billion page views per month thus making it 37th among global website and 10th in the United States with over 49.4 million unique monthly visitors in the US alone and 80 million new classified ads every month. The company has a turn over of US$ 100 million and is valued at $5 billion.
This is phenomenal considering that the site offers nothing but simple classified ads with simple design, simple texts that do not have any graphics, no animation or pop-ups, banners or logos. The site today looks more or less the same as it did when it began its life in 1995 and yet manages to grow. What does it have to teach marketing professionals?
Firstly, the most important reason for the popularity of Craigslist despite its no frills approach to everything, is that it puts customers first. It does not advertise itself, and nor does it charge money for most of the ads, especially personal ones (it has a payment for only corporate ad listings for a few cities in the network). However, in offering simple, free ads to individuals, it provides an invaluable service to its reader base that has continued to grow over the years.
Thus, though the international popularity of the portal has led many others to enter the global classifieds markets like Ebay Classified, Olx, Adsglobe, Adpost, Locanto etc., many of them with fancy layout and designs and colours, none of them have even been able to touch the popularity of Craigslist giving new meaning to the old saying that if you shut up and continue doing good work, sooner or later you will get noticed.
The other important lesson is to not give way to temptation. In today’s world endless profits seem to be the goal of most companies. Craigslist however has resisted the temptation for profit and has stayed surprisingly close to their original goals and objectives. According to many market estimates, if Craigslist were to allow even simple banner ads and charge for just a few more of their services that they today offer free, their revenue would multiply manifolds. However, Craigslist has decided to keep it simple and it is this simplicity and adherence to their original purpose that has become one of its core strengths.
And it is this clear value system and the ability to stick to ones original business model despite the odds and temptations that has been the greatest strength of Craigslist, something which most modern companies, could do well to follow.
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