If you’re wondering why your efforts to promote your products online have been in vain or why your competitors are running full steam ahead while you languish in their wake, you might want to look into competitor benchmarking.
It’s a must-do for any marketing team who wants to stay current, tap into opportunities, and boost revenue.
But what is ecommerce benchmarking and how do you do it?
In this article, we’ll talk about how to benchmark your competitors in just five steps. So easy peasy that you can get started today.
Without further ado, let’s dive in, shall we?
Ecommerce Competitive Benchmarking: A How-to Guide
- What is competitive benchmarking?
- Benefits of Competitor Benchmarking in Ecommerce
- Adapt to changes and trends
- See your brand’s position clearly
- Unveil best practices and unleash creativity
- Competitor Benchmarking: Five Steps to Success
- Set goals and objectives
- List down your competitors
- Choose your metrics
- Choose your benchmarking tools and gather information
- Analyze results and implement
- Get started with ecommerce competitive benchmarking
- Frequently Asked Questions
- How do you benchmark against competitors?
- Who should be on the benchmark competitor list?
- How to do ecommerce competitor analysis?
What is competitive benchmarking?
Competitive benchmarking is the practice of comparing your company’s performance against other companies and the industry you belong to using specific metrics.
These metrics (or benchmarks) include
- Conversion rates
- Bounce rates
- Average order value
- Customer lifetime value
- Customer acquisition costs
- Revenue
- Search engine results
- Customer ratings
You can also compare strategies, products offered, and practices and see how you’re performing according to the standards your competitors have set.
Benefits of Competitor Benchmarking in Ecommerce
Staying ahead of the competition is essential for business growth. That's where benchmarking your e-commerce competitors comes into play, offering a wealth of benefits to savvy brands and marketers.
Adapt to changes and trends
Firstly, benchmarking provides invaluable insights into industry trends, allowing you to stay informed about the latest innovations, consumer preferences, and market shifts.
By keeping a close eye on your competitors' strategies and performance metrics, you can identify emerging opportunities and potential threats, enabling you to adapt and evolve your own approach accordingly.
See your brand’s position clearly
Secondly, benchmarking helps you understand where you stand in relation to your competitors, allowing you to identify your strengths and weaknesses more effectively.
By comparing key metrics such as website traffic, conversion rates, and customer engagement, you can gain a clearer picture of how your brand stacks up against the competition.
This insight not only highlights areas where you excel but also uncovers opportunities for improvement, enabling you to fine-tune your strategies and enhance your competitive advantage.
By systematically analyzing your rivals' strategies, performance metrics, and market positioning, you can gain valuable insights that inform and refine your own business strategy.
Unveil best practices and unleash creativity
Finally, benchmarking your e-commerce competitors can inspire innovation and creativity within your own business.
By analyzing your competitors' products, marketing campaigns, and customer experiences, you can uncover new ideas and best practices that you may not have considered before.
Whether it's refining your product offerings, optimizing your website, or fine-tuning your marketing messaging, benchmarking provides a valuable source of inspiration for driving continuous improvement and staying ahead of the curve in the e-commerce landscape.
Competitor Benchmarking: Five Steps to Success
Step 1: Set goals and objectives
The first step in benchmarking your ecommerce competitors is to define your goals and objectives.
Ask yourself what you want your brand to achieve through benchmarking. Make sure your objectives are clear.
Examples of potential objectives include increasing newsletter signups or sales, improving performance or strategy, and having better processes.
Step 2: List down your competitors (direct or indirect)
Next, make a list of your competitors you want to benchmark yourself against.
You might find the process of selecting competitors overwhelming or confusing. There are several ways to approach it.
You can choose your direct competitors or your peers who are most similar to you and are going after the same target market.
Alternatively, you can opt for bigger fish–the companies who are best in class in your industry–and use them as inspiration.
On the other hand, you can also benchmark your brand against up-and-coming ecommerce companies. This helps you become aware of potential threats that can become bigger rivals in the future.
Ensure you also look beyond direct competitors and consider those offering similar products or catering to the same demographic.
Step 3: Choose your metrics
Now that you have your goals, objectives, and list of competitors, it’s time to determine the metrics you’ll measure in your benchmarking.
Examples of metrics you’ll want to track are:
- Website traffic
- Average organic traffic
- Market share of traffic
- Keyword rankings
- Social media followers
- Social media engagement
- Average ads published
- Average emails sent
- Spam score
- Email types sent
- Average price
- Total products
The metrics you track should be relevant to your goals. If you don’t know where to start, you should try benchmarking your competitor’s ads, emails, product prices, landing pages, and software.
This gives you a holistic view of a brand’s performance and shows where you’re at relative to them.
Benchmark ads
Gauge your competitors’ advertising performance using metrics like average ads published, ad volume, ad diversity (images or video), and unique copy.
Benchmark emails
To measure email performance, collect data on the average number of emails sent, spam scores, email types (promo, relational, product, launch, survey), and email size.
Benchmark prices
Research what products your competitors offer and how they price them. Track average prices and total products.
Observe their product categories, range, and pricing methods. Do they position their products as budget-friendly, luxury, or midrange?
This information can help you adjust your pricing strategy.
Benchmark landing pages
You can also benchmark landing pages and the ads associated with these pages to see what your competitor’s funnel looks like.
Benchmark software
Lastly, it’s worth looking into the software your competitors use to run their website for additional information.
Step 4: Choose your benchmarking tools and gather information
You have access to your brand’s metrics but the challenge is getting ahold of your competitors’ information. These metrics are confidential.
Also, the process can be complex and time-consuming if you decide to gather data manually. Nonetheless, you can research any available company reports online, as well as articles and press releases.
SEO and social media metrics are readily available but to get a full view, you need to upgrade to paid tools.
Competitor benchmarking tools like Panoramata will streamline this step so you don’t have to collect all this information yourself.
These tools also have the advantage of keeping your data in one place so you are more organized and can access and analyze them easily.
Step 5: Analyze results and implement
Finally, it’s time to analyze the data you’ve collected by comparing your information to that of your competitors side by side. You can use competitor analysis and benchmarking tools like Panoramata to automate this.
You can then implement the insights you’ve obtained from the reports.
Make sure to track and benchmark regularly to keep your data fresh. Repeat the benchmarking process as needed.
Get started with ecommerce competitive benchmarking
In conclusion, benchmarking your e-commerce competitors is not just a strategic necessity but a powerful tool for driving growth and success in today's competitive landscape.
By systematically analyzing your rivals' strategies, performance metrics, and market positioning, you can gain valuable insights that inform and refine your own business strategy.
Armed with this knowledge, you can identify opportunities, mitigate risks, and stay ahead of the curve, ultimately positioning your e-commerce brand for long-term success.
Frequently Asked Questions
How do you benchmark against competitors?
Benchmarking against competitors involves identifying key players in your industry, analyzing their strategies and performance metrics, and using the insights gained to inform your own business strategy.
This process entails evaluating various aspects such as website performance, product offerings, pricing, marketing tactics, and customer feedback.
Who should be on the benchmark competitor list?
Your benchmark competitor list should include direct competitors who offer similar products or services to your target audience.
Additionally, consider including indirect competitors who may cater to the same needs or desires through alternative solutions.
Aim to cover a diverse range of competitors across various market segments to gain a comprehensive understanding of the competitive landscape.
How to do ecommerce competitor analysis?
To conduct e-commerce competitor analysis, start by identifying your main competitors within your industry or niche.
Then, gather data on their website performance, product offerings, pricing strategies, and marketing tactics.
Finally, analyze this information to identify strengths, weaknesses, opportunities, and threats, allowing you to refine your own e-commerce strategy and stay competitive in the market.
