Humanizing the Multi-Sided Marketplaces: Customer Retention Strategy on Online Service Platforms

Digital platforms adopting multi-sided marketplaces facilitate matching and information sharing between buyers and sellers, but they face disintermediation risk when buyers defect with a matched service provider and continue transactions outside the platform, adversely impacting the platform’s economic implications. To reduce disintermediation, digital platforms strive to employ human agents as a cushion. This paper examines the role of human agents in mitigating disintermediation. The first section draws on the Mangle model to theorise the antecedents of customers’ adoption of the human agent layer, testing these effects using a dataset from a car aftermarket service platform. Results show that customers are more likely to interact with the human agent for services with perceived functional value than social value, and customers with third-party insurance are more likely to interact with the platform’s human agent. The second section investigates the consequences of customers’ adoption of the human agent layer, showing that customer repurchases interacting with human agents increase by 37.5%. Customer satisfaction mediates the relationship between the use of the human-agent layer and customer repurchases. Deploying human agents also offers cost benefits. These findings provide managerial and theoretical insights on using human agents to curtail disintermediation.