What are Online Marketplace Metrics and Why are They Important?
Metrics are a statistical approach to measuring something. Metrics tell you about the business you have under process and how well it is faring online/offline. Marketplace startup metrics are crucial for any business, be it a local or an international one.
Businesses need to generate enough revenue to compensate for the entire team’s efforts and times. This is where the online marketplace metrics come in! Metrics of various types help in making you understand whether things are moving in the right direction for your business model or not.
Marketplace metrics are certain types of metrics that act as key performance indicators (KPIs) that you must follow. Taking immediate action as per the signal of KPIs is necessary if any business model wants to achieve its full potential.
Metrics evaluate the marketplace by providing accurate measurements about the process of functioning of a specific business and thus provide a base for you to improve your marketing strategies and approach. Satisfactory and meaningful results are yielded when you know efficient usage of marketplace metrics.
What Functions Marketplace Metrics Fulfill In An Organization?
● Marketplace metrics are essential to analyze various aspects of marketplace evaluation. It is actively used daily for an online business. Analytics decide the ideal state of the process and express them in terms of metrics. Online marketplace metrics also run through factors like control & feedback.
● In today’s world, major businesses and organizations revolve around social media. Every second company has branched out its prospects to online platforms like Facebook. To attain maximum results, Facebook marketplace metrics are reliable online metrics that help transform the requirements a customer gives. It also gives us an understanding of products and helps us understand if the product is good enough to meet the customer requirements. Facebook marketplace metrics analyses and informs us about the changes that should be incorporated into the products to improve their quality.
● To design goals and objectives or give feedback regarding the quality of the product, they must come from an unbiased viewpoint. For achieving an impersonal analysis of the elements, success metrics help draft the graph of how the products are performing. This also helps transform customer requirements and operational performance for maximum output. Thus, success metrics are crucial in an organization to enhance overall performance.
● The data that the organization receives must be managed for smooth functioning. The marketplace metrics dashboard comes in handy data management easier,
● . It presents key performing indicators with the help of interesting charts and graphs. This helps get a quick and organized review and analysis of the products in the market. A Marketplace metrics dashboard is crucial in achieving projected performance measures for strategic objectives.
● Ever wondered if your organization is growing and developing with time? There are hundreds of metrics used by an institute. However, many of these metrics are futile in terms of expanding the business. On the other hand, growth metrics tell a company much more than sales results. They help provide beneficial insights like Which products or offers contribute to the maximum revenue growth, which channels offer the highest growth potential, etc. Thus, growth metrics are helpful to analyze revenue generation, cost per lead, retention, upsells, active users, and so much more.
● SOME IMPORTANT METRICS YOU SHOULD BE TRACKING FOR GROWTH IN THE MARKETPLACE
Working on a startup and want to boost the outcome? Are you limiting your organization to just one type of metric? Measuring the results with just one type of marketplace metric is not a good enough strategy, especially where metrics evaluate the marketplace. Therefore, to measure the effectiveness of the process, a combination of metrics is used. These metrics analyze the competition and allow you to develop the best strategies. To successfully expand your business, it is time you incorporate several metrics for growth. Below are several crucial marketplace startup metrics to help you expand your reach.
Gross merchandise volume (GMV)
This online marketplace metric is crucial for marketplaces as it looks at the total sales dollar value of sold merchandise. You are looking to understand whether your marketplace is a good platform for your business? Or want to know how to measure product performance? The most convenient way is to start from the Gross Merchandise Volume. This method effectively calculates the overall growth of your market and user base. It does not only focus on the number of users or products.
Bounce rate
Bounce rate is the marketplace metric that measures the number of visitors who arrive and leave immediately without engaging. The bounce rate of your site should be as low as possible. This is great for marketplace startup metrics as it may help new startups find out how well their website is doing or what improvements are needed.
Take rate
A third party seller or service provider gets charged a fee from the marketplace on performing any transaction. In an online marketplace, take rate is a determining factor in calculating a marketplace’s revenue.
Buyer/Seller Overlap
One of the major metrics for growth is the buyer-seller overlap. It refers to the ratio of the number of buyers who are also sellers. The higher the overlap, the more it decreases CAC (customer acquisition cost) since you get both a buyer and a seller for each acquisition. The buyer-seller works as an excellent two-sided marketplace metric as it can tell you whether there are more buyers or sellers in the current marketplace.
Net Promoter Score (NPS)
Another key business metric for startups is the NPS. It determines the success rate of customer satisfaction by subtracting detractors from promoters. Those who give scores of nine or ten are promoters, while detractors give scores of six or below. A good NPS is over zero, while an NPS of 50 or more is excellent.
Market liquidity
Marketplace liquidity metrics are one of the most important metrics that state the success rate of your business. It is one of the most crucial metrics that tell about sellers’ and clients’ satisfaction with a marketplace. Therefore, marketplace liquidity metrics ensure that both buyers and sellers are content with the services offered by your platform.
Monthly active users
Among the key business metrics, counting the number of unique users who visit your site during a certain period is a common way to track your user activity. In this way, you can measure your monthly active users and use the number to determine whether you’re attracting new users or are losing the old ones faster. Whatever may be the case, you may need improvement either way.
Customer lifetime value
If you want to measure the metrics for growth, you must consider the customer lifetime value. It means the overall amount of revenue you expect from every customer. Customer lifetime value should be higher than customer acquisition cost so that your growth is considered sustainable. A higher customer lifetime value is also helpful in determining a proper and optimized provider to customer ratio for your marketplace.
Customer liquidity
Customer Liquidity refers to marketplace metrics that analyze the probability of a customer visit that leads to a transaction. A big goal is expected, between 30 and 60%, not counting people who bounce. An approximate way to measure this is simultaneously how many transactions and customer visits you get in a particular month. To get accurate results, you can filter out visits from your providers.
What Is The Need For Marketplace Metrics?
Certain metrics like b2b marketplace metrics help to describe business metrics as a measure that is quantified and employed to track and assess the progress of different business processes. One of the most fundamental reasons businesses use metrics is to control and track their spending to increase revenue and assess the progress of their short-term and long-term goals.
Marketplace metrics help transform the multiple requirements that a customer gives into a series of numbers. Such numbers/metrics can be used to accurately map the process for its efficiency. These make it convenient to understand and offer coupons and bargains to customers. Online marketplace metrics are beneficial for the seller and the buyer and benefit the entire organization.
