A digital marketplace platform must attract users, provide an interesting shopping experience, and create a big sales volume to make a profit. It’s also crucial to avoid user churn and other possible problems. Therefore, companies must track various online marketplace measures, from the number of unique users to gross merchandise value and lifetime value, with these goals in mind.
Organizations may assess company success, enhance budget planning, and uncover parts that require further work by regularly evaluating marketplace performance indicators.
Furthermore, better-informed judgments may be made, and tailored advertising campaigns can be launched.
This article discusses the most important marketplace KPIs for platform owners to consider.
Top Ten Marketplace Metrics For Measuring Success
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Tracking Number Of Active Users Monthly
With a simple process of tracking monthly active users, every enterprise can define the number of people who visited your app or website at least once within a period. If the count stays the same or increases slowly with time – it suggests that the brand is not attracting as many potential clients as it needs to grow your business. But, of course, the reasons may be different as per the situation.
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Potential Consumer’s Bounce Rate
Bounce Rate is a marketplace metric used to represent single-page sessions percentage to the total number of engagements. It even showcases the percentage of the people who visited the site and immediately left it without any action. If the bounce rate is not as high as required, an organization must address the existing issue and fix it.
- Average Time Of The User On The Website
The average session metric showcases the time spent by a consumer on the website. By knowing this, it gets easy to determine the customer level engagement. An average of 2-3 minutes is considered a good session. While monitoring this meter, it is imperative to analyze it for every separate page. It is important to note that a good session time range may vary for several industries like education, food services, eCommerce, or healthcare.
Meter For Checking The Rate Of Consumer Satisfaction
- The Net Promoter Score
It determines the organization’s performance while demonstrating the current user’s willingness to recommend it to other potential visitors. To get the promoter’s score – every organization must ask the following question from their users – “How likely is it that you would advise an e-marketplace?”
In return, the users can mark at any point on a scale of 0-10. Based on the results, you can organize the audience into three primary sections:
- 9-10 (Promoters)
They are the most loyal visitors who even leave positive feedback and recommend it to others.
- 7- 8 (Passives)
This category is of the people who are satisfied with the organization but are not as enthusiastic as other clients.
- 0-6 (Detractors)
People who are dissatisfied with the provided services and thus, leave negative reviews or reports badly about your organization to others.
The higher the rating on consumers online means, the higher the sales volume. Thus, business owners must manage the rating to maximize revenue.
- The Sales Conversion Rate
Conversion of the engagement into sales is the basic requirement of every company. In simple words, the rate conversion represents the total conversions over the number of visitors in a period. Therefore, it is important to set up your conversion goals as it enables you to evaluate the performance of the website or application.
With a good conversion rate, every company can earn higher profits with a similar traffic rate on the web.
- The Churn Rate
Also, the attrition rate determines the proportion of users that have discontinued using the app. It is checked through several ways like the consumer has closed their accounts or has stopped visiting the website for over a year. If the attrition rate is too high, it may harm the enterprise’s growth and revenue. It is crucial to implement actions that increase consumer engagement to resolve the problem, such as single-click ordering or AI-based chatbots.
In addition to the consumer churn rate, it is vital to analyze the vendor churn rate as well.
The Sales Or Transaction Metrics
- Liquidity
A marketplace KPI highlights the transactions carried out via the business platform. To earn maximum profits, every application requires a critical number of transactions and sales amounts and a perfect balance between the consumers and the vendors. Thus, to prevent the issue of low income via application, the businesses must attract new clients and merchants to maintain a perfect balance between them.
Consumer Liquidity – the percent of visitors who have made a payment on the app. 30% or more is a great score.
Vendor Liquidity – the percent of listing that has successful transactions.
The Marketplace Business Meter
- The Gross Merchandise Volume
The total sales value of products or services ordered over the platform during a given period is represented by gross merchandise volume (GMV), which is one of the most important marketplace indicators. Therefore, a corporation may measure the actual growth of the online marketplace business by following this KPI.
A company may use GMV to learn about:
- The popularity of a marketplace application and how well it functions.
- The quantity of money made possible by the system.
- The performance of a two-sided marketplace platform.
GMV, on the other hand, does not show you the money generated by the app or website. Instead, a corporation must multiply the GMV by a take rate, a commission paid for each transaction, fee, or other marketplace monetization tactics, to compute it.
- The Cost Of Consumer Acquisition
The expense of gaining a new customer is called customer acquisition cost (CAC). Aside from marketing and sales costs, this price covers delivery, user assistance 24 hours a day, seven days a week, and platform maintenance. The ideal case scenario is when CAC is near zero, indicating that a firm is not attempting to develop its audience, which is increasing naturally.
- The Lifetime Value Of The Customers
Customer lifetime value (CLV) is one of the most important market KPIs, indicating how much money a customer is projected to spend with a firm throughout their relationship.
An online marketplace firm can use the CLV to determine:
- A maximum amount that may be spent to attract a new customer.
- Products or services that consumers highly desirable with the greatest CLV.
A business may enhance sales and marketing procedures and meet client demand more effectively as a result of this. It’s crucial to remember that CLV must be more than CAC in order to be successful in the marketplace.
