In the increasingly competitive landscape of online marketplaces, utilizing data to fuel growth has become a necessity. In 2016, Manish Gupta, a mentor for entrepreneurs, even started calling data ‘the new dollar’, referring to its true value in terms of growth and value adding.
Due to its nature as platforms for user-generated content, online marketplaces are a treasure trove of data. But not all data is created equal and spending time tracking and chasing the wrong signals can easily cause you valuable time and kill your competitive edge rather than induce the much-coveted growth you were after.
The sheer volume of data available to a marketplace might feel overwhelming, and deciding which data to track can even be considered scary for some. In these scenarios, marketplaces risk becoming paralyzed and simply choose to go on with their business without accurately measuring their success or failures.
How do you go about tracking data that can be used in an actionable way then? The most important thing is to have a clear-cut purpose for the parameters you decide to actively monitor.
Tracking data is important, but don’t track data just for the sake of it.
To best apply a data-driven approach for your marketplace success, first, define which lifecycle stage your platform is in; are you getting started and focusing heavily on growing? Have you gained traction and are now winning market shares from competitors? Or are you an established player looking to expand your current market or offering?
We call these three stages for Grow, Defend and Expand.
Knowing your lifecycle stage, it’s time to determine your goals. Set tangible and achievable goals unique to your situation. Stay true to your site’s current lifecycle stage and set goals within your reach, you will redefine them once you’ve excelled and your marketplace moves to the next stage.
A few examples of goals can be to increase gross merchandise value (GMV), establish reliable customer support protocols, retain buyer and sellers etc.
The last step is to finalize which parameter to monitor. Investigate which data you have easy and sustainable access to, and make sure they are relevant to measure the success of your goals.
The key to tracking your success is to have an accurate and true overview of the direction your online marketplace is moving. In our marketplace health cheatsheet, we look further into the goals and which kind of parameters you should consider tracking, given the lifecycle stage you’re in.
You can also learn more about actionable data-tracking from our webinar “Put your data at work: 3 steps to achieving a healthy digital marketplace.”