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Which KPIs should you monitor to manage your business and improve your marketplace’s profitability?

24 November 2020

Business Insight

When it comes to making business decisions, KPIs and metrics are valuable allies. Available in Marketplace dashboards, these performance indicators allow you to steer your business towards ever-increasing profitability as long as you don’t drown yourself in numbers but rather focus on the most relevant KPIs! Discover in this article the leading indicators to follow for a marketplace.

 

The 4 key KPIs of a marketplace

Because these KPIs (Key Performance Indicators) directly influence the turnover, they are to be monitored daily.

  • Platform traffic
  • The conversion rate
  • The average customer basket
  • Business volume

These indicators will give you clues on the actions to be taken to improve your marketplace’s profitability. For example, if you realize that you have good traffic but are struggling to convert, you may need to review your payment methods. On the other hand, if you manage to convert a good part of your visitors – but not enough of them to your liking, your efforts should focus on acquiring more traffic (content marketing, SEO & SEA). Finally, if you feel that your average shopping cart is too low, why not implement modules such as “You may also be interested in”, to promote cross-selling and up-selling

Each of these 4 KPIs is then broken down into a series of other metrics. To evaluate the platform’s traffic and take appropriate measures to improve it, we can follow:

  • The bounce rate: if it’s too high, it may mean that your site takes too long to load or that the landing page is not very clear, for example.
  • The percentage of new visitors: if the same people always visit your marketplace, you can conclude that you need to boost your platform’s notoriety by undertaking SEO and SEA actions.
  • The average length of visits: visits that are too long or too short can mean that your visitors have not found what they were looking for and have lost patience. This implies reviewing the arborescent and UX/UI design of your site to provide your users with a better experience.
  • Traffic from organic referencing: If you find it insufficient, you could set up a content marketing strategy to get your platform up in search engine results.

 

KPIs to monitor marketing actions

To measure each of your marketing actions’ performance, it’s essential to associate them with KPIs. Thus, if you adopt a content marketing strategy by sharing posts on social networks, in addition to the traffic from organic referencing, you will have to follow:

  • The number of views on your posts
  • The engagement rate is the total number of likes, comments, and shares divided by the subscribers’ total number.
  • The number of views per article
  • Duration of visit 

Opening rate, click rate, conversion rate, unsubscribe rate… The same rigorous approach should be applied to your emailing campaigns to identify your strategy’s pain points. If you launch a SEA campaign of paid referencing on Google Ads, for example, you will have to be attentive to:

  • The click rate of your ads
  • Income per visit
  • Bounce rate
  • The average length of visit per page
  • Number of page views per visit

In any case, it will also be necessary to calculate the acquisition cost per channel to measure your marketing actions’ ROI. You shouldn’t find yourself spending more to acquire a customer than you earn!

 

KPIs specific to payment flows

The highest rate of basket abandonment is at the time of payment. Therefore, the payment experience must be observed under a magnifying glass to remove all the obstacles that could prevent your visitors from becoming customers. 

  • The payment acceptance rate, which should be as close as possible to 100%.
  • The chargeback rate. A close study of this KPI can help identify a seller who does not satisfy buyers sufficiently and take the appropriate measures to rectify the situation. Merchandise that is not received or is defective may be the cause of a chargeback. Chargebacks can also be related to fraud attempts or transactions not recognized by buyers on their account statements, which is also why it’s important to be backed by a PSP that puts in place measures to protect you against it. 
  • Money-In/Pay-in and Money-Out/Pay-out volume variations give indicators on your platform’s business seasonality. This indicator is particularly interesting for financial marketplaces (wedding pots) and marketplaces for products and services related to leisure or vacations. By studying the volume variations, you will have a better business prediction to improve your cash flow.
  • The fixed and variable commission rates applied by the PSP on transactions

 

From attempted purchases to successful transactions, including payment acceptance, it’s essential to track the payment throughout its entire value chain while regularly checking chargeback rates and monitoring fraudulent attempts. 

 

To best manage your business, choose a PSP with intuitive dashboards, such as Lemonway. Lemonway is an ACPR-approved payment institution that supports and advises platforms from A to Z to manage their payment flows and to improve marketplaces’ profitability. Do you have a project? Questions? Tell us what you need!