What is Supplier Lifetime Value (SLV), and how do you calculate it?
In short – The projected revenue generated by a supplier over their tenure on the platform.. A key marketplace metrics you should track.
Supplier Lifetime Value (SLV) Formula
SLV = Average Supplier Revenue × Supplier Retention Rate × Supplier Tenure
Supplier Lifetime Value (SLV) estimates the total revenue generated by a supplier over the duration of their partnership with the marketplace. This metric helps platforms assess supplier profitability, retention strategies, and marketplace supply dynamics. This metric provides deep insights into business performance, helping to identify trends, optimize strategies, and improve overall marketplace efficiency. This metric provides deep insights into business performance, helping to identify trends, optimize strategies, and improve overall marketplace efficiency.
How can you find your Supplier Lifetime Value (SLV)?
You should generally be able to calculate your Supplier Lifetime Value (SLV) 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.