Every marketplace has a vision of success, even ones that run for non-profit. You may have different versions for success. Hence, it becomes important that you keep a track of the growth of your marketplace. Every marketplace business has different key performance indicators (KPIs) depending on their specific goals. How important one KPI is over another can be a result of the products you sell or even the format of your sales process. For marketplace sellers, that means watching, measuring and continually improving KPIs for end customers, sellers and growth. These are hard, analytical stats that may be found in your enterprise analytics console.
Here we discuss a few general metrics that most online websites use:
1) Usage Metrics
Usage metrics are indicators of the flow of customers on your website. Most online businesses track the following 4 metrics in order to assess the user activity on their website.
- Active Users: Calculated Monthly or Bi-Monthly, active users give you an idea of the number of users still performing transactions on your marketplace. The number of users does not grow business, the number of transactions do.
- New Users: This metric is especially useful when you run a promotion for customer acquisition. Organic growth in this means that people are talking about your marketplace
- Time Spent: If a customer spends a lot of time on your marketplace per session, it means either he/she is shopping a lot or unable to find what they are looking for. Hence it is important to monitor the time spent on your website
- Bounce Rate: If a customer is dissatisfied with any component of your website, he/she will leave the website, This is called Bounce Rate. A High Bounce rate without goal conversion means dissatisfied customers. You could run a retargeting on such customers.
These usage metrics can also be used as a benchmark for competitive analysis, Sellers could be attracted on to your website using these metrics.
2) Marketplace Business Metrics
Business metrics are important to justify your ROI from the marketplace. The following 3 metrics are what you should be measuring in the growth phase.
- Gross Merchandise Value: In the initial phases of growth, it is important to measure the value and not the volume of your sales. The volume may not be an apt metric for measurement of success as promotions and offers may show higher volume but lower value.
- Customer Acquisition Cost: This is the cost of acquiring each customer on your website. For calculating this, you calculate the total amount spent on marketing per new user on your website.
- Repeat Customers: Repeat customers are the best. Thye not only give valuable insights on reasons for visiting on your website but also act as evangelists.
Another important business metric is the Supply-Demand Ratio. It is the number of sellers on your platforms vs the number of users. It is important to maintain a healthy ratio so that both sets of customers are kept satisfied.
3) Customer Satisfaction Metrics
Okay, there is an insane number of metrics you could use for this and various tools to measure it. Customer satisfaction can be calculated at every level using tools like the Richter Scale. Amazon asks you of your satisfaction level after you place the order, interact with a customer agent and when you receive the delivery. They track your responses and understand your behavior and what delights you.
- Net Promoter Score: NPS is a trusted anchor to measure your customer experience. It can be used to assess the marketplace customer relationships. It serves as a better alternative to traditional customer satisfaction tools and is proven to be correlated with revenue growth.
Keeping Track of It All
When you have to track KPIs across multiple channels, the job can become complicated and time-consuming quickly.
Kato a business intelligence tool that can easily integrate with Yelo, helps you keep tabs on more data so you can more easily measure some of the not-so-evident KPIs as well. Establish performance thresholds and the system will look out for trends, then alert you and/or take action to make sure you stay in the black.
But it all starts with knowing which KPIs are most important for your business. Identify your key performance indicators and be sure to set a review process for them with each new marketplace you sell on. This will give your business the best chance of continued success.
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