If you’re seeking to benchmark an e-commerce business and gauge its performance, you’ve come to the right place. With e-commerce’s quick expansion and change, businesses must be aware of their performance, strengths, and shortcomings in order to remain competitive in the market.
In this comprehensive guide, we’ll take a deeper look at the benchmarking process, elaborate on the important tools and explore techniques and actual examples to help you properly evaluate your e-commerce business effectively.
Step 1: Extending Key Metrics for E-Commerce Business Benchmarking
The first step in benchmarking your organization is to broaden the scope of critical indicators that you measure. It is critical to keep your list of performance measures up to date. In order to stay up to date with growing trends in the e-commerce market, keep a constant look at the following metrics:
- Customer Lifetime Value (CLV) – The total income earned by a client over the course of their association with your company.
- Bounce Rate – The percentage of website visitors that depart without engaging with it or reading more than one page.
- Customer Retention Rate – The frequency with which consumers return to make repeat purchases over a specific time period.
- Product Return Rate – The proportion of items purchased that are afterwards returned by customers.
- Gross Margin – The difference between the cost price and the selling price of the things you offer on your e-commerce shop.
As new trends and technology arise in the e-commerce market, constantly update and change the indicators you measure.
For example, until 2020 Facebook Ads has been the best way to test new products. But today you have Tiktok where you can just create organic content to see if there is a product market fit.
Obviously, posting content on Tiktok won’t be enough to validate a product, but it’s a good way to do a pre-selection to see how the market is responding to your product.
Another example : Culture changes consumers behaviors. Today people look for comments on your brand online, they want to know who you are, what are your values, who is the team behind the brand…
Step 2: In-Depth Overview of Benchmarking Tools for E-Commerce Businesses
Next, let’s go through the three best benchmarking tools in further depth.
Tool 1: Competitors Insights
Overview:
Competitors Insights focuses on providing you with detailed information on your competitors’ performance indicators, revenue generated, sales evolution in time, and other factors. This data provides you with insights on their strengths and weaknesses, which you can then utilize to enhance your own e-commerce approach.
Pros:
• Centralizes rival data gathering and analysis.
• Customizable notifications inform you to key competitor updates or changes.
• Aids in the identification of rivals you may not have been aware of previously.
Cons:
• Exploring the complete set of functions may be time-consuming.
Example: Assume Competitors Insights reports that your competitor has a best-selling products but that isn’t advertized. You might deduce that this product is a back-end product selling well to existing customers. But running ads to cold trafic might not be a good idea since your competitor isn’t doing it (which does not mean that you shouldn’t try).
Tool 2: Google Analytics
Overview:
Google Analytics gives statistics on visitor demographics, behavior, and conversion rates, as well as insights into how visitors interact with your website. By comparing this data to that of your competitors, you can see where your website thrives and where it falls short.
Pros:
• A wide range of performance measures.
• Highly configurable, allowing you to track and create targets based on your individual needs.
• Integration with other Google products like Ads and Search Console.
Cons:
• For non-experts, the learning curve may be important.
• Data ownership problems may emerge because Google controls the data created.
Example:
By measuring your website’s bounce rate over time, you notice that people prefer to depart your homepage without further exploration. This may necessitate a revamp of your homepage in order to make it more interesting and user-friendly.
Tool 3: SEMrush
Overview:
SEMrush is a digital marketing tool package that helps you understand your competitors’ SEO, content, and social media tactics. This all-in-one platform enables you to make educated decisions to improve the online visibility of your e-commerce firm.
Pros:
• Provides a multitude of capabilities for competition analysis, keyword research, and web traffic analysis.
• Regular platform upgrades guarantee the product remains relevant in a constantly expanding digital world.
• Provides readily consumable statistics and visualizations.
Cons:
• Datas are not up to date. There is a delay in which
• Prices can quickly rise if you need more features.
Example:
SEMrush reports that your top competition is targeting and ranking for a certain high-traffic keyword. Based on this knowledge, you may develop a content marketing plan to compete for the same term, resulting in increased organic traffic to your website.
Step 3: Follow a Structured Analysis Process
After collecting data using your benchmarking tools of choice, arrange and analyze your e-commerce business performance in a systematic manner. Concentrate on the important KPIs you discovered, identify performance gaps, and develop practical plans to enhance your e-commerce operations.
For example, your could compares your unique selling point (USP) against those of your rivals. This allows you to understand what distinguishes your brand and what encourages shoppers to select your brand over others. Once you’ve identified your USP, you can leverage it to outperform your competition in branding, marketing, and sales.
Your USP could be for example extra fast shipping, or the quality of your product or the fact that your product is tailored for a specific niche.
Another method is to utilize Competitors Insights to assess your Market Segment Performance. You may utilize the program to find consumer categories where you outperform your competition. Which may help you increase your success in these sectors by optimizing your product variety, price, and promotions.
Overall, examining data through Competitors Insights will assist you in making data-driven decisions that will propel your e-commerce business towards success.
Step 4: Implement, monitor, and iterate to Ensure Ongoing Improvement.
Create a strategy for executing strategic changes to your e-commerce firm based on the data and insights you’ve gathered. Monitor your performance on a regular basis. Altering methods depending on outcomes.
Cultivating a growth mentality that stresses constant progress and flexibility in the face of change allows you to :
- Improve the User Experience (UX) – Examine the overall design, navigation, and functioning of your website to ensure a smooth user experience that drives sales and repeat transactions.
- Adjust your Pricing Strategy – Monitor your rivals’ pricing to ensure you’re keeping competitive pricing and providing great deals to your consumers.
- Diversify Marketing Channels – To reach a larger audience, look into new advertising channels such as podcast sponsorships, Tiktok Ads, Google Ads, Native Ads, SEO blogging….
- Invest in Customer Retention – Instead of focusing primarily on obtaining new consumers, invest in keeping your current customer base. To create long-term consumer connections, provide tailored discounts, loyalty programs, or instructive content by leveraging email marketing.
Example:
Assume you’ve established a new email marketing plan to improve client retention. To measure the efficacy of this effort, you should track its effects on a regular basis, such as open rates, click-through rates, and conversion rates. Continue tweaking your email marketing if the results are favorable. If not, rethink your plan and make any necessary changes.
Using Klaviyo may also help you benchmark your email marketing stats against rivals in your sector, delivering vital insights for further optimizing your approach. Analyzing and comparing their efforts to yours may assist you in tailoring your messaging, target audience, and content to boost engagement and conversion rates.
Final Thoughts
Benchmarking your e-commerce firm is a continuous activity that involves regular monitoring and analysis. The three strong tools covered in this article — Competitors Insights, Google Analytics, and SEMrush – give essential insights into the performance of both you and your competitors, allowing you to make educated decisions that promote growth and profitability.
Furthermore, approaching your e-commerce firm with a growth mentality, staying up to date on industry trends, and measuring your performance on a regular basis will play a critical part in helping you surpass your competitors and flourish in the ever-changing world of e-commerce.