This Volusion blog post introduces the concept of benchmarking and why it’s critical to the success of your online store. This process includes analyzing specific indicators and tracking metrics related to achieving long-term goals. Benchmarking allows your business to gauge progress and make strategic changes to better facilitate your success.
In order to get where we want to go in the long haul, it’s important to take a look at where we stand today. It’s even more important to put together smaller goals to make sure we’re getting there in the most productive way possible. Think of it as if you’re running a marathon – at each mile you’ll want to perform a quick check to see how you’re doing on hydration, nutrients and body performance. The same idea holds true for your online business.
This is what we call benchmarking. While there are several definitions and variations of the term, it ultimately boils down to setting a long-term goal and using specific indicators and metrics to track your progress. Let’s walk through a quick benchmarking process using the following example:
- Step 1: Establish your long term goal. Let’s say you want to increase your search ranking by 25% before August.
- Step 2: Determine where you currently stand. Do a quick search for your online store using various keywords and various search engines. Jot down your results ranking for each.
- Step 3: Identify which indicators you’ll use for measurement. In other words, break it down into the parts of the whole: SEO, keywords, content, etc.
- Step 4: Figure out which metrics will be used to track your indicators. How are your keywords performing? How many content changes are you making to better optimize your site? What reports can you pull from the Volusion admin to gauge?
- Step 5: Set your benchmarking schedule. If you plan to have your goal achieved by August, setting benchmark tallies at the end of each month would be appropriate.
- Step 6: Work, measure, adjust, repeat. If by the end of May you haven’t seen much progress, try readjusting your strategy to focus more on another indicator. If you’re soaring ahead of your goal, keep plugging at it.
Benchmarking can also be used to track the performance of your online business in comparison to your competitors and the industry as a whole. Thus, if the abandoned cart rate for your specific industry is 38% (random number) and your abandonment rate is 46%, follow the above process to help bring that rate down.
It can be easy to fall into a routine when selling online, especially when things are going well. Remember to keep challenging yourself by keeping long-term goals at the forefront of your strategy. In the exciting world of ecommerce, some priorities can feel like a marathon to achieve – just make sure your route has the right checkpoints.
-Matt Winn, Marketing Associate
How do you define benchmarking? Do you have any experiences in putting together a benchmarking strategy? What do you think of the steps outlined - agree or disagree? Any questions about this process? Do you think benchmarking is overhyped or too often ignored? Any thoughts, ideas or advice? Share with us!