Let’s face it: Life wouldn’t be the same without the comparison game. Yes, it can be brutal in middle school (Who’s more popular? Prettier? Has less zits?), but we all grow up and move on. We learn that you can’t be the best at everything, and you figure out what to focus on.
Business objectives are very much the same way. You shouldn’t boil the ocean, but you should prioritize a few key performance indicators (KPIs). This leads me to Step 1 of how you can correctly play the comparison game (aka benchmarking).
- Define your KPIs, and align them with existing business goals. If one of your business goals is online sales, look at metrics such as conversion, average order value (AOV), revenue per visit. For market share, look at sales growth, share of the market, Net Promoter Score, percent of loyal promoters. For customer experience, look at percent of visitors that interact with reviews, average daily review volume, average rating, customer service complaints. For brand value, look at Net Promoter Score, share of market, average rating, margin. Some goals will make more sense to compare over time (sales growth), others need comparison with direct competitors (share of market), and still others KPIs need comparison to your industry (Net Promoter Score).
- Get Data. Now, don’t back out of those awesome KPIs that you defined earlier if the data is a little harder to get. It shouldn’t be impossible, but some simple metric may not be able to tell the whole story of how your company is performing.
- Compare! Are you performing above, at, or below the benchmark? What do you need to do to raise the bar on this?
Let’s look at some examples using benchmarks pulled from our own client network data, and best practices we recommend to improving each KPI. You can see all of our benchmarks by specific industry here.
Reviews drive 82% conversion lift
Note: “Lift” compares product page visitors who clicked reviews versus those who didn’t. So, if the conversion rate for visitors who did NOT interact with reviews is 2%, and the conversion rate for those visitors who DID is 5%, then you see a 150% conversion rate lift.
Say your conversion rate lift is below the 82% benchmark, or your AOV lift isn’t up to par. Provide higher visibility for your reviews using star ratings in your homepage banners, banner ads, and post-interaction emails. Obtain more review volume across all of your products/ services, so that shoppers always have a chance to interact with reviews on everything you offer.
Q&A drives 104% lift in revenue per visit
If your consumer Q&A community is performing below the benchmark for your industry, again, increase visibility to get more visitors reading, asking, and answering questions. Use your homepage banner (flip-through) and emails. Also, keep Q&A above the fold on the product page and don’t make the shopper scroll to find it.
82% of ratings are four stars or higher for apparel retail
To improve both your rating distribution and your average rating across all products (two related metrics), you need to focus on what customers are saying about your products in reviews and work on improving those products. Retailer Land of Nod found that reviewers were mentioning that a kids’ activity table was easily scratched. Land of Nod went back to improve the product and reached out to the customers who complained.
Net Promoter Score is 63% for financial services
To improve your Net Promoter Score, ask yourself, “How do I improve what others think about our company?” First off, just as with increasing average rating, you need to make sure you are offering quality products/service. Your products will always reflect on your brand – regardless of if you are the brand or retailer. Secondly, you need to see how you are doing in customer service. Do a lot of your reviews complain about this? Reach out to these reviewers and see how your company can improve the situation. Lastly, look at what your passives and detractors said in their reviews. Ask the NPS question is on the review submission form so you can tie it back to their review, the product, and in some cases, a net promoter comment.
27% of reviews are written by repeat contributors
With both of these metrics, it’s not as simple as more is better. You’ll need to evaluate where you as a business need to be, or if it’s even relevant. In judging your percentage of answers from the community, you first need to decide whether your answers should come from you, your community, or your brands (if you are a retailer). For more complicated consumer electronics products, you may need your own team or the brand to help answer questions. If you are talking about health/ beauty products, you may want almost all of your questions to be answered by the community, engaging your expert customers in helping answer questions.
To evaluate your percentage of reviews by repeat contributors, you want to decide if you want more or less reviews to be coming from repeat contributors. I would suggest you need to strike a balance. You want a good sample of unique customers writing reviews, but you also want to encourage and thank those customers who like to write a lot of reviews – customers who are clearly repeat buyers and are very engaged.
If you skim read all of this and just looked for the punch line (not that I ever do that!), here it is: A good KPI needs some sort of comparison, whether that’s an industry benchmark, a trend over time, or a competitor benchmark. As Avinash Kaushik, analytics expert and author of Web Analytics 2.0, states in his blog:
“Simple context makes data a lot more interesting, helps you focus and find some actionable insights. Reporting rule #0 in my book: Never report data in aggregate, or by itself. Always always always test to see if you are including context!”