Due to its rapid growth, low costs and easy implementation of nature, Many entrepreneurs are started building a rental marketplace. So, undoubtedly incorporating the niche business strategy in this field will yield a good result.
Many of the startups nowadays are not finding the right solution and facing many difficulties to manage their marketplace in a profitable manner. If they came to know the success metrics then it will be easy for them to run a marketplace.
Here I would like to share the success metrics which you should be monitored regularly in order to make your marketplace successful in this tough competition. Pay close attention to the following factors.
Metrics to monitor in the rental marketplace
Every marketplace has its own vision of success. Although success might vary depending on the type of marketplace. Here I am sharing with you the different factors which clearly indicate the success rate of the marketplace.
1. Net revenue
Net revenue is also known as a take rate. While gross merchandise value can provide good visibility but it does not represent the actual revenue. Take rate(Net revenue) provides the actual revenue which is the average commission that the marketplace takes on the transactions.
If the marketplace has high take-rate means it has a strong value proposition to both provider and buyer. As a marketplace owner, you have to continuously monitor these metrics and it helps you to examine the growth rate.
2. Usage metrics
Most of the rental businesses track the following things because it helps to drive improvements and help the business focus on customer needs.
It is the common way of tracking user activity to measure monthly active users. It also provides you an idea of the number of users visited and the number of people performing actions on the marketplace. If the number is steadily growing means, then there is no doubt that the marketplace is attracting more customers and showing the positive graph.
A bounce rate is a common and widely used metrics representing the percentages of visitors entering your marketplace and leaving without taking any actions. It is used as an indicator of how well the landing page works for your end-users.
If there is a low bounce rate, it is clear that users are more satisfied with your marketplace and vice versa. Hence keeping your marketplace website with a low bounce rate is good in the long run. Be concise with this metrics.
It is important to monitor the user’s actual time spent on the marketplace. Generally, if the user spent a lot of time in the marketplace, we can say the user gets what he/she needs exactly on the website. Being a marketplace owner, you should actively look out this user behavior and try to make them more engaged.
3. Customer acquisition cost
This is the process of acquiring a new customer in the marketplace. The number of customers acquired during a given time interval is one way of estimating customer acquisition cost.
We can’t predict the value of CAC initially. It may be either low or high. If the customer acquisition cost is low, then it automatically improves the marketplace’s profit margin and making it more economical to gain new customers. If it’s exceeding your budget, keep a close eye and evaluate a new strategy. It is the most important metric to measure the success rate.
4. Liquidity of marketplace
Liquidity is nothing but the demand and supply of your marketplace. It’s a vital metric that shows the active number of sellers and buyers on your website. It is proportional to the ratio of the number of transactions and the number of consumers and sellers.
Liquidity indicates how successful the marketplace is and shows a marketplace ability to scale. The benefits of liquidity are attracting more users and resulting in a self-sustained growth.
5. Customer retention rate
Customer retention is the process of engaging an existing customer to continue using your marketplace. It’s also known as repeat customers. It is totally different from customer acquisition because the customer has already been converted into your funnel. The best customer retention tactics enable us to build a long-lasting relationship with the users and become loyal to the marketplace.
Monitor, Analyze, Experiment again and again. Because just setting up the marketplace and sit back and relax is not going to work anymore. As a marketplace businessmen, you must get into the ground to choose the right marketing strategy, evaluating the user metrics and take necessary actions.
I hope you get a clear understanding of how to measure the success rate of the marketplace. To make this better for new marketplace owners, RentALL helps you to avoid spending tons of time in developing the online rental marketplaces for any niche market.
Thanks for your time reading this post!