Importance of Tracking Metrics of Your Multivendor Marketplace
How do you know your multi-vendor marketplace is doing good? How will you measure the growth of your marketplace? A quick answer will be, by analyzing data. But which data you are talking about? These are the data that keeps track of different phases and analyze the overall performance of your marketplace. You can call those marketplace metrics to track the performance of your site.
Platforms like Shopify, BigCommerce, Dokan, CS-Cart for multi-vendor marketplaces use these metrics all the time to keep a check on their conversion. This is why they survive the competition. Your store may not be that huge but still, you must keep those data if you want to stir your progress. This can help you in your total evaluation of the marketplace.
How to measure marketplace metrics
Every moment is important here from the moment a visitor comes to your marketplace to when they get converted. The time they spent between this visit and conversion also something you should be scrutinizing. So collecting data only is not enough either. You have to investigate and interpret the investigated result. Usually, you interpret those according to a set of standards. Those standards are called KPIs.
There are some KPIs there that more or less every company follows. Let's see what those common KPIs are there that can be helpful for your marketplace.
- Customer Acquisition Cost
- Average Order Value
- Gross Merchandise value
- Average Rate of Buyers
- Number of Sellers
- Conversion Rate and Net Promoter Score
- Bounce Rate
- Customer Retention Rate
- Return on Investment
- Net Promoter Score
Customer Acquisition Cost (CAC)
CAC is also known as Client Acquisition Cost. This calculates how much one has to spend to get a new customer. This includes promotional campaign cost, advertising costs overall marketing cost that has gone behind getting a customer. And the amount of customer you have got during a certain period with the cost is your CAC rate. You will know you have to change your business strategy when the cost goes way higher but fails to attract potential customers.
Average Order Value
The average order value is one of the most useful marketplace metrics. This counts the average payment behind every order placed. To count the average order value you have to divide the entire revenue by the active number of orders.
Average Order Value(AOV) reflects your marketplace skills and throws light into your capability of influencing cross-selling. Renowned marketplaces like Amazon gives special attention to average order value as from this record you get to predict your customer's habit as well as nit order updates. It also informs about market trends. Average Order Value can be measured daily, weekly, or monthly.
Gross Merchandise Value
Gross refers to the overall value of the products that have been transacted. But a common mistake is made while calculating gross merchandise value. That is, sometimes they forget to exclude those who are “contracted” and not “delivered” yet from the list. This mistake can cause trouble in the calculation. To get the accurate result you should always be careful of order-cancellations and refunds your company has made.
Liquidity is best described as flexibility. That means it analyzes how quick you are to adopt the changes in the marketplace. It shows the total transaction on one hand and the sum of consumers and vendors on the other hand. This indicates the compatibility of your customers and vendors. Flexibility is measured by keeping track of sold products during the shortest timeline. The greater the transaction between the shorter time period the greater flexibility it indicates.
If a marketplace lacks this flexibility it is likely to fail in the long run.
Average Rate of Buyers
The average rate of buyers is the driving force of a multivendor marketplace. This measures the density of buyers in the marketplace. In the case of one store, usually, a handful number of buyers buy a limited number of goods from the total supply. It is a little different in the case of the multivendor marketplace. In a marketplace number of buyers increase so does its sales. This data shows your marketplace's acceptability and popularity.
This is measured by comparing the total number of sellers and their sales during a definite period of time.
The average rate of buyers and the number of net sellers are dependent on each other. It is obvious to be like this as vendors or sellers attract potential customers and customers' enthusiasm inspires the sellers. As there are multiple vendors, an average of sellers is counted considering their market shares.
Conversion Rate and Net Promoter Score
Conversion in the e-commerce business means how many of your site visitors are turning into your customers. Ultimately the goal of setting up a marketplace is to get customers. So, the conversion rate is the most important marketplace metric you should be bothered about. There is a journey of turning into the customer from a mere visitor.
This journey is sometimes presented through a conversion funnel. This funnel shows you the steps of this journey. You can bring about revolutionary changes in your strategy just by analyzing the conversion funnel.
Net Promoter Score refers to those who after getting services from you refer you to others. In online marketplaces after completing a transaction the question “Would you like to recommend us to others?” is very common. Customers can give you ratings too.
Customers recommend you to others when they are really satisfied with your service and become your loyal and permanent customers. How many people are doing this and how they are rating you is an indicator of your performance. You can also track who are your detractors that is who are not happy with your service and how can you go on to improve it.
Bounce rate is a negative marketplace metric. But this is equally important for your business. The bounce rate is the opposite of the conversion rate. This refers to those visitors who came to your site left within a very short time period. A high bounce rate is very harmful to your marketplace. This indicates that you are doing something wrong and you must find out what is that and take proper steps to solve those issues.
Customer Retention Rate
Retention rate can be considered as the binary of bounce rate. This informs you about how many customers are coming back to your marketplace and why. It is true that you will always try to attract new customers but you will be a successful marketplace owner when you will have a high conversion rate as well as retention rate.
Being able to hold your old customers on your site is a very tricky thing to do. Besides getting new customers you must find ways to keep your old ones. This is an index of your consistency.
Return on Investment
Return on investment shortly known as ROI is one of the most crucial KPIs for every business. This has a difference in customer retention rate. This focuses on the result of the total investment and the money that came in return through that investment. It can be positive or negative. It is measured by keeping the profit against total investment. This will, of course, help you understand how your marketplace is doing.
Why Do You need to Keep Track of Your Marketplace Metrics?
No businessmen have ever started a business with the view to shutting down it after a certain period. There is always a view of reaching a certain peak point. You can not sit motionless by just setting up a marketplace. To reach that height you will have to keep your research going. The reasons are endless why you need to keep track of your marketplace metrics. But we have pinned down causes that are unavoidable and can ring a bell in your mind on why you must keep data on your marketplace metrics.
- Marketplace metrics provide you with information about vendors, buyers, and buying habits.
- Those data help you to analyze if there is any risk coming toward you that can harm your business.
- This shows you where you should emphasize on.
- Metrics also help you target customers better and run more precise advertisements.
How to Keep Track the Metrics of Your Marketplace
This is a common query now. You have to set up a system if you want to keep track of your marketplace performance. You can do that using plugins.
In fact, WooCommerce Conversion Tracking has gained immense popularity as a marketplace metrics tracker.
First of all this plugin track and analyze your marketplace metrics so well that it suggests to you what should be done. Again it has integration with platforms like Facebook and Twitter. Its intuitive nature connects with visitors better. Better Interaction brings greater conversion.
Another amazing fact about this plugin is that it has an “Always Free” version. This version lets you enjoy most facilities without making you concerned about investing in it. But in case you want to use some advanced features, then you can always get its pro version.
Keeping track of metrics nowadays is like keeping yourself up to date with possibilities and trends. This is an easy process too with the available WordPress plugins. So if you are by any chance worried about your marketplace's continuous poor performance then start keeping track of metrics.
The manual process of keeping track can be complicated and tiresome. You can use the WooCommerce Conversion Tracking or any other similar plugins available in the market and you will be all set to track the conversion for your site hassle-free. And it is always important to start somewhere and success will definitely come your way.