What is Order Frequency, and how do you calculate it?
In short – Average number of orders placed by a buyer within a specific period. A key marketplace metrics you should track.
Order Frequency Formula
Order Frequency = Total Number of Orders ÷ Number of Active Buyers
Order Frequency measures how often buyers make purchases on the marketplace over a certain time frame. It is an indicator of customer engagement and loyalty.
Increasing Order Frequency can lead to higher revenue and better customer lifetime value. Strategies to improve this metric may include loyalty programs, personalized marketing, and enhancing the user experience.
How can you find your Order Frequency?
You should generally be able to calculate your Order Frequency with tools you already posess. If that's not the case, signing up for an analytics tool may make sense.
Among others, twosided is one of the tools you could consider. Out-of-the-box, you'll get over two dozens marketplace KPIs and detailed tracking for your supply, demand and other factors that determine marketplace health.
Explore other metrics
Order Frequency
Average number of orders placed by a buyer within a specific period
Cross-Sell Rate
Percentage of transactions that include additional products or services
Supply-Demand Ratio
Ratio of available listings to active buyers
Listing Quality Score
A metric evaluating the quality of product listings based on predefined criteria
User Net Adds
Net increase in the number of users over a specific period