Top 10 online marketplace metrics to evaluate the business performance
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To earn a profit, a digital marketplace platform has to attract customers, deliver an engaging shopping experience, as well as generate a large volume of sales. It is also important to prevent user churn and other potential issues. With these aims in view, companies have to monitor a range of online marketplace metrics, from the number of unique users to gross merchandise value and lifetime value.
By continuously tracking marketplace performance indicators, organizations become able to measure business success, improve budget planning, and identify aspects that require additional effort. Furthermore, it is possible to make more informed decisions and launch personalized advertising campaigns.
This article describes the main marketplace metrics that platform owners need to analyze. But first, let’s have a look at the classification of marketplace KPIs.
The classification of online marketplace metrics
In order to measure marketplace success, it is crucial to take into account a variety of KPIs. Marketplace performance indicators are divided into the following categories:
Usage metrics. Showcase how many users visit a marketplace website or application, the lengths of their sessions, and bounce rate. To receive detailed statistics, a company can enable Google Analytics that requires no intervention of software developers.
Customer satisfaction metrics. These marketplace KPIs serve for estimating user engagement and retention rates. As a result, marketplace platform owners can determine reasons for churn, as well as find out how to improve relationships with existing and potential clients.
Transaction metrics. Allow organizations to view the number of transactions within a certain time period and estimate marketplace business liquidity.
Business metrics. By monitoring these marketplace performance indicators, businesses can see customer acquisition rate, revenue generated through the platform, and overall profitability.
Now, we will describe the core online marketplace metrics that you should track to enhance user experience and increase revenue.
Top 10 online marketplace metrics to measure success
Marketplace usage metrics
1. Monthly active users
By tracking monthly active users (MAU), marketplace operators can define the number of people who have visited an app or website at least once within a specified period. If this figure remains the same or increases very slowly, this means that a company does not attract new customers or existing clients do not come back. Reasons for this situation can be different.
For instance, a website may not provide the necessary goods, or online payments do not work, or shoppers have to wait for hours until their requests are answered, or an organization does not invest in marketplace promotion.
It is worth noting that businesses can also monitor the number of daily users and overall marketplace visits that include people who have interacted with the platform more than once during 30 days.
2. Bounce rate
Bounce rate (BR) is an online marketplace metric that represents the percentage of single-page sessions—lasting 0 seconds—to the total number of visits. In fact, bounce rate showcases the percentage of users who enter a website and immediately exit without making any actions, for example, clicking on a link. Typically, a high BR starts with 56%, an average BR ranges between 41%–55%, and a good BR is 10%–40%, according to Semrush.
Since not engaged customers are not likely to continue using a digital marketplace platform, a company should strive to make a bounce rate as low as possible. If this metric is not so high as necessary, an organization has to identify and address existing issues. For instance, web pages can load over 10 seconds or a design of web pages may look outdated.
3. Average session duration
The average session duration shows the time spent by a user on a marketplace application. By tracking this online marketplace metric, it is possible to determine the level of customer engagement. Considering websites in general, a good session length varies between 2–3 minutes.
However, this figure is higher for two-sided marketplace platforms across the majority of industries (e-commerce, education, healthcare, food service, etc.), as consumers may spend a lot of time browsing goods or services, reading reviews, and comparing prices. When monitoring this metric, it is crucial to analyze it for each page. Say, if the session length on the checkout page is too long, there may be a problem with carrying out transactions.
Customer satisfaction metrics
4. Net promoter score
A net promoter score (NPS) is among the key marketplace performance indicators demonstrating the willingness of customers to recommend the platform to their friends, family, or colleagues. To obtain an NPS, a company asks the following question: "How likely is it that you would advise an e-marketplace?" Users, in their turn, estimate the service from 0 to 10.
As a consequence, an organization can segment the audience into three categories:
Promoters (9–10). Promoters are the most loyal customers who will keep purchasing from you while leaving positive feedback and recommending a marketplace to others.
Passives (7–8). Consumers are satisfied with a marketplace application but can not be characterized as enthusiastic clients.