Key metric in a two-sided marketplace

We proceed from the fact that NSM (North star metrics) should reflect the growth in value for both sides of the product - and therefore measure transactions between sellers and buyers.

The Transactions metric can be unified for different products:

• Riders per day / week / month for a taxi (using Uber as an example)
• Number of nights booked for rental housing (using AirBnb as an example)
• Orders per Consumer for food delivery (on the example of Uber Eats)
• What metrics are taken into account in attraction?

User acquisition metrics themselves are not specific to 2sided marketplaces, but unlike other types of products, they are collected separately for sellers and buyers.

Customer Acquisition Cost (CAC) - the cost of acquiring a new user. (of New Buyers / Sellers / Suppliers - the number of new users)

Conversion Rate (CR) - conversion to the target action.

For buyers:

• conversion to registration
• conversion to sending a message to the seller
• conversion to adding product to cart
• conversion to purchase

For sellers:

• conversion to registration
• conversion to ad placement
• conversion to sale on the platform

Virality - virality coefficient (number of sent invitations * conversion to acceptance of invitations).

Viral cycle - the average time from the moment of activation of one user to the moment of activation of the user invited by him. Shows how quickly the network effect works and new users are "infected with the product".

Metrics for user activation in a two-sided marketplace

1. The first placed offer on the platform is taken as the activation of the seller. That is, an active seller is a user with an available unblocked offer.

Daily/Weekly/Monthly Active Sellers - the number of active sellers. Can be counted separately for private and company sellers.

Percentage of Active Sellers - the percentage of active sellers relative to the total number of registered ones.

2. The activation of the buyer in the platform can be taken:

• first completed order
• for classifieds, the first request for the seller's contacts/message sent to the seller
• other intermediate target action (for example, subscription to the appearance of an item in stock, home price updates)

Daily/Weekly/Monthly Active Buyers - daily / weekly / monthly active audience.

Add to Cart Rate - the percentage of users who added a product to the cart.

Cart Abandonment Rate is the percentage of users who added a product to their cart but left without starting checkout.

Check Out Rate - the percentage of users who added a product to the cart and started placing an order.

Search X Times Rate - the proportion of users who made X searches.

What metrics are tested to measure user retention?

For buyers:

• Customer Retention Rate - customer retention rate, how many users from those who came at the beginning of the period will use the service on day X. As a rule, it is calculated separately for a short interval (1-7 days) and for a long one (depending on the product).
• Monthly Cohort Retention - activity of a specific group of buyers. Newer cohorts (those who started using the product when the network got bigger) should have better retention than the old ones who joined when the network was smaller.