What is the network effect?

The network effect is defined as a product or service that offers increased value for existing users as more users join. Consider an instant messaging service. One user on the service gets no value but as more users join the service, each user has a greater reason to use it and as a result, each existing user gains increased value as more users join the network.

Diagram illustrating the network effect for phone lines. Image source: https://en.wikipedia.org/wiki/Network_effect

How does the network effect apply to digital credentials?

There are two types of network effect: Direct and Indirect. Direct network effects, also known as same-side effects, is the effect we see from our instant messaging service example. More users means more people to reach via the service, which creates increased value for all users. Indirect network effects, also known as cross-side effects, are the value gained by one user group when users from a different group join the service. This effect is seen on sites such as eBay. As more buyers join the platform, the sellers benefit from a larger audience to target.

For digital credentials, the direct network effect is the increased ability of the digital credentialing platform to better support their customers as more join. As more users join the service, there is more capacity for additional features, service upgrades, and one-to-one customer support, which benefits all users of the platform. 

The indirect network effect impacts both issuers and their recipients through increased visibility of credentials and an increased audience size. Each time Accredible gains a new credentialing partner, we carry out co-marketing campaigns which helps to boost the awareness of these issuers to existing credential recipients. Similarly, as each new credentialing issuer joins Accredible, they also bring a new audience of prospective candidates. This audience is exposed to other courses through recommended credential widgets and our credential directory tool, CourseFinder. As the customer base are already credential holders, they already show an interest in learning and are more likely to explore other courses that are related to their career pathway. 

The network effect of CourseFinder

CourseFinder is an Accredible managed credential directory that is free to use and exclusive to our credentialing partners. CourseFinder serves an audience of learners that have a high intent to convert as they are looking for credentials that will help them move the needle on their career. Issuers can list their courses, programs, or memberships on CourseFinder for prospective candidates to find. 

CourseFinder - Accredible's Credential Directory

CourseFinder has an indirect network effect. As more issuers join the platform and list their available courses, the audience of learners gains more credential options and a greater awareness of the types of credentials available. As the number of courses increases, as does the variety of topics. This attracts a larger audience as they have more success finding courses that are directly related to their interests. As the audience increases, issuers gain increased visibility for their brand and their courses, and benefit from increased revenue and program growth. This in turn attracts more issuers to the platform, creating a positive feedback loop.

The network effect of Recommendations™

Recommendations is an Accredible product designed to position issuer’s courses to accelerate their program growth. Issuers an opt-in to gain exclusive access to advertise their courses to a verified pool of customers that are actively searching for their next credential. Recommendations works similarly to targeted affiliate marketing and issuers pay per click generated on their credentials with the ability to track where recommended credentials are shown and engaged with. Issuers can choose from two levels of visibility:

  • General - The default placement that carries the lowest fee.
  • Featured - Higher visibility placements that issuers can choose at a higher fee. 

Issuers that opt-in for Recommendations can present their credentials in three placements, on the credential view in a dedicated widget, on the Suggested Credentials page, and on CourseFinder. For issuers that choose Featured placements, their credentials appear in the two two positions on the credential view, the top three positions on the Suggested Credentials page, and the top three positions in CourseFinder search results.

Example of Suggested Credentials Page with Featured Credential Placements

Similar to CourseFinder’s indirect network effect, the more issuers that opt-in to Recommendations, the larger the selection of relevant credentials that are shown to recipients and prospective candidates. It also provides more credential view placement options and ensures that the credentials shown are of the highest relevance to the credential they appear on. 

In Summary

Accredible delivers increased value to issuers that want to provide their candidates with feature-rich digital credentials by offering tools to drive program growth and increase brand awareness. Our credentialing partners can take advantage of CourseFinder and Recommendations to benefit from the network effect and increase the audience size their credentials are presented to. 

For more information on issuing digital credentials, listing your programs, courses, or memberships on CourseFinder, or how to opt-in to Recommendations, get in contact or book a platform demo

Further Reading

Digital credentials provide powerful marketing tools for issuing organizations. Through shared credentials, issuers can increase their brand awareness and attract new candidates to their programs. Download the digital credential marketing strategy guide for actionable advice and print-friendly checklists for including digital credentials in marketing strategies. Use the information provided in this guide to:

  • Increase online visibility
  • Impact brand recognition
  • Encourage recipient social sharing
  • Engage with target audiences
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