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. This metric helps businesses understand key operational efficiencies, areas for improvement, and strategic opportunities to drive growth and user engagement.
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
Net Promoter Score (NPS)
A measure of customer loyalty and satisfaction based on user feedback.
Average Order Value (AOV)
The average value of orders placed on the platform.
Supplier Lifetime Value (SLV)
The projected revenue generated by a supplier over their tenure on the platform.
Repeat Purchase Ratio
The proportion of customers who make repeat purchases over a given period.
Customer Lifetime Value (CLV)
The projected revenue a customer will generate during their relationship with the business.