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Platform Businesses: The World is Your Arena

A network effect is the phenomenon behind the success of platform businesses that have come to dominate the 21st century economy – from giants like Amazon and Airbnb, to the many thousands of constantly emerging platforms that operate on a smaller scale. 

The networks that these platform businesses enable tend to grow more rewarding, valuable and attractive as more people join and participate. This is the network effect in action – growth begets growth.

Yet platform businesses can also become a victim of their own success – in a phenomenon known as a reverse network effect. This is said to occur when the number of people using these networks scales to such an extent the platform can no longer operate efficiently. The network becomes congested, generally slows down, and multiple challenges arise.

Facilitating vast numbers of platform user engagements can be a big factor here. The more interactions generated, the more pitfalls there are. When one link in the chain breaks, the result can be downtime, missed messages, failed campaigns, customer churn, lost sales, or unfulfilled opportunities to gain efficiencies. In short, a compounding series of CX and business downsides that can spiral out of control.

But here’s an important point. The platforms that successfully

  • master the art of handling every single customer interaction, at scale
  • support users at every point of their platform engagement lifecycle
  • and reduce the complexity of their overall engagement strategy

can combat the reverse network effect and give themselves a compelling opportunity to unlock their growth potential. In fact, the right engagement strategy can set off what we describe at Infobip as an engagement network effect.

Engagement network effects

Not only is an engagement network effect an antidote to reverse network effects, it’s a platform growth hack. Think of it as the ultimate positive feedback loop:

And so on. It’s not hard to see how this virtuous circle of engagement, satisfaction and user attraction can lead to serious growth. 

But businesses often fall down in the first step of the loop: The ability to onboard customers quickly and engage them intelligently across multiple channels. Without this crucial capability to launch and handle interactions at scale, the rest simply cannot follow.

So what do businesses need to kickstart an engagement network effect chain reaction and power hypergrowth?

1. Advanced ability to scale

We’ve already discussed how fast growth can bring risk and reward for platform businesses. These risks can be mitigated by using a cloud communications partner through which all user interactions can be conducted. This approach brings simplicity and efficiency, with cross-channel orchestration, data and analytics, and a unified view of each customer, all under one roof. 

When it’s time to scale up – for example, onboarding more customers, channels or functionalities – the process is frictionless rather than fraught, because upscaling capabilities come built-in. 


The value added by the right cloud communications provider isn’t just in the software, but the technical support at hand. And using a single provider means when you need compliance expertise or technical support, the contact address is always the same. 

2. Omnichannel mastery

Leading platform businesses tend to leverage traditional channels such as SMS, MMS, voice and email, and, increasingly, chat apps such as Messenger, WhatsApp and Viber – depending on what geographies they operate in. The idea is to communicate on the channels that customers like to use, which drives customer satisfaction and retention.

The key is to deliver consistent interactions across these channels. A conversation should move seamlessly between email, WhatsApp and SMS, without information and insights being lost. If you aren’t orchestrating customer communications on the channels that suit your customers, you can bet your competitors will soon be. 

3. Intelligent interactions 

Platform businesses must manage a myriad of interactions with their users – whether authentication processes, sales/marketing moments or reminders and confirmation messages. With a unified view of each customer and their platform activities, businesses can identify the precise moments to reach out with personalized reminders, offers and other experience-enriching content. This is no mean feat when managing thousands or millions of omnichannel interactions. But the right cloud communications provider can help platforms navigate this complexity with ease.

4. Compliance and credibility

A commitment to compliance and maintaining the highest security, compliance and privacy standards is key for any platform business nowadays. While the main benefit here is reputation, compliance competency can also dramatically improve service provision. In the US market, getting approval from mobile operators to run SMS campaigns can be a lengthy process. But a cloud communications provider with close relations to the mobile operators can streamline and expedite approval. If you’re trying to launch a campaign or a communications initiative using SMS short codes, the right provider can ensure this happens in a few weeks rather than several months.

5. A single provider 

Platform businesses can try to achieve all of the above with several providers. But using one partner for any interaction can bring simplicity and efficiency, sidestepping the perils of reverse network effects.

Partner to grow

In 2022, your reach as a platform business should no longer be limited to a particular market or geography. In fact, every potential consumer or platform user in the world should be in reach. 

Tapping into this global arena can be as simple as partnering with a cloud communications provider that can help you build a platform that’s able to scale, while nurturing quality interactions at the same time. It’s worth noting that your provider needs to have global reach, and be trustworthy on the finer details of compliance and regulation. As the world’s most connected cloud communications provider, with over 700 direct operator connections across six continents, Infobip is in that bracket.

So if you’re a platform business with ambitions to scale, it might be time to partner with a cloud communications provider that can help you unlock the business growth power of engagement network effects – and ensure the world becomes your arena.

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