Benchmarking: The Importance of it in 2021

The Importance of Benchmarking:

Regardless of the stage of your business or industry, the direction of your e-commerce business is always strongly influenced by three simple questions:

1) Where am I?

2) Where do I want to be?

3) How do I get there?

Sometimes the questions or answers to these questions do not seem easy. But you’re pretty good at a process management technique called benchmarking. In this post, we discuss the ‘what’, ‘why’, and ‘how’ behind benchmarking so that you can turn even the most difficult questions into practical strategies and meaningful results.

What is the reference point?

Benchmarking is the process of looking at your performance against your competition and determining where you want to be. In the benchmark, you define your goals and plan a series of small measurable steps to help you achieve them.

The more logistical side of benchmarking involves analyzing specific KPIs and examining metrics related to your long- and short-term goals. This enables you to evaluate the progress of your business and, if necessary, implement strategic changes.

Why is the criterion important?

Because benchmarking is a flexible process, it can be applied to almost any area of your business, from the state of your business at the broadest level to individual channel goals. Here are some ways in which your business can benefit:

• Helps you understand your business performance. By comparing your business with the competition, you get a clear picture of your strengths and weaknesses in this area.

• Helps you set clear goals for your business. For example, if the dropout rate in your industry is 38% and yours is 46%, you know what time it is and how much work it will take to get back on track.

• Enables you to prioritize areas that need to be improved. Areas where you are significantly behind with your industry or your competition urgently need more attention, while areas, where you are the best, are not preferred.

• Helps you monitor progress with your goals. Once you have achieved the goals, you can see how the measure is implemented when you achieve it, and if not, you can determine what needs to be changed.

How can I make a model?

Like your benchmarks themselves, how your benchmark can fully align with your business; As long as you have a well-thought-out long-term goal and use specific and appropriate criteria to monitor your progress, there is plenty of room for flexibility.

 However, if you are looking for a standard process, try the following:

Step 1: Choose what you should be looking for in general and get an overview of where you stand in relation to your competition. For example, let’s say you want to monitor your organic performance. Use a paid SEO tool to fully research your performance against competing sites, or use Google’s high-priority keywords to see who’s coming and how often.

Step 2: Set your long-term goals based on your first deep dive. Suppose, for our SEO example, you want to increase total organic traffic by 25% by September.

Step 3: Identify the KPIs you will use to measure results and performance. For SEO, you can look at organic traffic, organic revenue, traffic to specific pages, specific keyword performance, or overall brand visibility.

Step 4: Determine which actions affect your KPIs the most and create specific goals related to the actions themselves – optimize X pages, deliver Y content, execute Z links safely, and so on.

Step 5: Set up your referral program. If you plan to reach your goal in September, you should check your progress once a month to make sure you are still on track.

Step 6: Work, measure, adjust and repeat. While SEO takes time, it is time to adjust your strategy if after three months you have not made progress with your goal. However, if you want to exceed your goal, you need to sustain the momentum.

How often should I do an assessment?

Think of it as a journey. If you are traveling, you should stop from time to time to see the map, refuel and regroup. Stopping too often is not a productive way to get to your destination, but if you do not stop regularly, your journey could be jeopardized if you get off track before realizing something is short.

The right balance between “very” and “very little” will differ slightly according to business and may also differ per channel; For example, if you set a monthly SEO standard, you will not have enough time to really assess your organic status. That said, it makes sense to monitor your SEO progress. Use what works for you, but generally do not deviate from normal benchmarking.

Conclusion: benchmarking is an ongoing process

If your business is doing well, it can be easy to avoid mission-critical activities like benchmarking. But if for the first time you visit benchmarks or see again if something important is not getting in the way, it may be too late. On the other hand, the long-term goals at the forefront of your strategy will constantly ensure that you are on the right track or that you will adapt as quickly as possible.

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