10 marketplace metrics you should track to measure your success

The existence of the marketplace business model has already disrupted the existing conventional marketplaces. If you are a marketplace player, you need to keep your competitive spirit energized and streamlined to always become a better version of your existing one. 

In the process, you need to keep an eye on the performance board of your online marketplace and should make informed decisions about the same. So, do you have a clear picture about which marketplace metrics should be included while getting the analytical picture, or are you clueless while making the decisions? In any of these cases, this write-up can be a helping guide to enable your cognitive decisions to unlock a better and higher revenue stream for your business. 

Let us get started!

Ignoring the nuisances and making a better decision for all the stakeholders, here is the list of top 10 marketplace metrics that will define your online business’s success. 

1. Get your users data right!

Data is the real eye-opener for your marketplace operations. Knowing the traffic rate on your marketplace is a smart way to get a brief about the response of your audiences with your launch or presence. 

It is typically achieved by measuring/ counting the monthly active users. It includes the number of unique visitors that typically visit the site for a specific period of time. Hence, Monthly active users can be one of the predetermined marketplace metrics that can be used to track the success ratio. 

How does it help?

By counting and comparing the number of monthly active users on a marketplace, one can interpret the following statements: 

1. If the numbers are growing, the marketplace is able to attract, engage and retain new customers
2. If the numbers are decreasing, the marketplace fails to attract and engage the new customers.
3. Or, if the numbers are constant, the marketplace needs to think out of the box to grow in terms of popularity.

2. Know the time spent on the site

When you read about the data of monthly active users on your online store, the next thought that might capture your mind would be how much time they have spent on the marketplace. This will help in capturing the behavioral dynamism of your customers. For any marketplace, to get a conversion from traffic, it is important to know how much total time your visitors are spending on your marketplace. Apart from this, the time spent on specific verticals of the marketplace can also be documented. 

How does it help?

1. Relatively long time indicates customers are not able to find the relevant findings on the marketplace.
2. A potential time spent on the marketplace explains the visitor is willing to explore more about the offerings- most likely to go ahead with the purchase.
3. Little time spent indicates the visitors are not willing to go ahead with the purchase. 

3.  Measure the Bounce Rate

People often misjudge higher numbers of visitors on their marketplace with a high success rate. But that’s not true. Heard about the bounce rate? By definition, it means the end-to-end measuring of the percentage of visitors who enter the site and leave the site immediately. It might increase the count of visitors on your site but has nothing to do with the quality of the visits. 

How does it help?

1. A low bounce rate means that visitors who are coming to your marketplace are genuine and belong to a pool of potential customers for your business. 
2. A high bounce rate means the visitors are nowhere to be counted as your potential customers for your marketplace. 

Aim to lower the bounce rate of your marketplace. 

The above three marketplace metrics can be grouped under the utility category. Moving ahead, we are discussing the transaction metrics. 

4. Counting on the liquidity 

Liquidity is a certain term that helps in explaining the upcoming credit health of your business. Having 30 to 60 percent of liquidity in your business explains the long-term sustainability of your business. Skipping the bounce rate count, a net alone of other users can be counted as the part of liquidity.

How does it help?

1. It gives you an accurate picture about the potential customers on your site.
2. It also helps you in planning the generated revenue for your business. 

5. Get the repeat customer ratio 

As the name suggests, the repeat customer ratio indicates the number of customers that are repeating to your marketplace. When you are into the business, you need to keep track of the number of repeat customer ratios. 

How does it help?

1. With a higher percentage of repeat customer ratio, you can choose to spend more money over acquiring the customers . 
2. With a lesser percentage of repeat customer ratio, you need to work upon increasing the ambiguity of the marketplace rather than putting more cost on customer acquisition. 

Going ahead, now we’ll discuss different metrics that can be intelligently categorized into business metrics.  

6. Check for Gross Merchandise Value

Another important metric that should be kept in mind is to know and check about Gross Merchandise Volume. It is defined as the total sales value of the product or services that are sold on the marketplace during a specific time frame. 

How does it help?

1. Higher the GMV, higher will be the profit to your online marketplace. 
2. Lower the GMV, you need to rework on the growth and presence of the online marketplace. 

7. Count for the Customer Acquisition Cost 

Heard about CAC? It includes the price a marketplace needs to pay to acquire a new customer. If you wish to make your business a strong success, it is ideal to get a zero cost.  Knowing about customer acquisition costs gives you a perfect picture of how your business will grow and sustain itself in the market. 

How does it help?

1. Lesser the customer acquisition cost, higher will be the profitability ratio of your marketplace business.
2. Higher the customer acquisition cost, lower will be the profitability ratio of your marketplace business. 

8. Read on the Customer Lifetime Value

Getting a customer lifetime value documented in your business is a smart way to know what could be the total amount of revenue of your marketplace. If you choose the CLV as a part of your tracking metric, you can easily upscale your business as per the requirement. 

How does it help?

1. CLV should be better than CAC. It helps in bridging the gap between investment and earnings. 
2. In case your CAC is bigger than CLV, you need to rethink, strategize and execute the new action plan. 

9. Fetch the Net Promoter Score 

It is one of the famous measures that is used to establish the user satisfaction ratio. It helps in creating a business value for your business and helps to know in-depth about the opinion and feedback of your customers.  

How does it help?

Based on the NPS calculations, these could be defined as: 

1. Promoters: Score of 9 and 10- they are called promoters
2. Detractors: Score 0 to 6- they are called detractors.
3. Passives: Score 7 to 8- they are called passives. 

Make sure you choose to connect with your customers and make them promoters of your business. This will definitely go a long way. 

10. Plan for the Sean Ellis Test 

Though NPS is a well-known and proven method to get the user satisfaction record, The Sean Ellis Test is also making a move in the industry. It helps the marketers and growth hackers to know whether their product or services are market fit or not. 

Summary 

If you are looking for more information about the metrics that can be defined to track and penetrate success for your marketplace, feel free to connect with experts.