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An important Marketplace Metric: Search to Fill
On a recent trip, I experienced something on the Uber app that I don’t recall seeing in recent times. After a minute or so of waiting, I saw this on the app:
My assumption is that in a high density area like Boston, it is quite rare that Uber is unable to match a rider with a driver. And with incentives like Surge Pricing, it is a matter of time and the right surge incentive to get a driver to accept the ride (I eventually was able to get a ride for ~$90!)
“Search to Fill” (or “Fill Ratio”) is a critical metric to track in a marketplace. This metric is simply measured as the percentage of searches or requests that result in completed transactions.
For example,
- On Trusted or AirBnB or Pared, this is the percentage of search sessions that result in bookings.
- On Threadflip, this was the percentage of search sessions that resulted in a purchase.
- On Care.com or Thumbtack, this is the percentage of job postings that result in a candidate getting hired.
- On Uber or Lyft, this is the percentage of ride requests that result in rides.
Generally the higher the fill ratio (at critical mass), the better. But the ratio helps marketplace operators really understand which side of the marketplace to focus on.
Type of Marketplace
Once you have been able to categorize your marketplace, you are able to understand how you can leverage various aspects to increase your marketplace’s Fill Ratio. Josh Breinlinger has a great post on marketplace categorization:
- Double Commit Marketplace
Examples: Care.com, oDesk (now Upwork), Thumbtack.
A typical workflow: Buyer posts job. Buyer invites candidates AND Candidates apply to job. Interviews happen. Buyer makes a hire.
- Buyer-Picks Marketplace
Examples: Trusted, YourMechanic, Airbnb
A typical workflow: Suppliers enter availability. Buyer can see available suppliers. Hires a supplier without discussion.
