What Everyone Ought To Know About E-commerce Benchmarking
Blog: MattsenKumar Blog
Benchmarks or benchmarking is essential in not just our personal life but it is also important in our professional life. We have all utilized benchmarks, those convenient points of reference for measuring or judging our personal and professional accomplishments. Benchmarking has long been a useful evaluation technique in the corporate sector. After all, you cannot tell how well your business is performing until you have a benchmark to compare it to.
However, the Internet era has ushered in a completely new method of doing business. When businesses first started making the switch to the Internet, their primary worry was getting their operations up and running. After that, e-commerce businesses require a method to track whether they are accomplishing their objectives and how their performance is when compared to that of their competitors. Traditional business standards do not fit in well here because their core operations are so dissimilar.
Importance Of E-commerce Benchmarking
The value generated from the decisions you can make once you answer the following major questions we detail below is the fundamental reason to invest in e-commerce benchmarking:
- Are your e-commerce efforts yielding the expected results?
- Are your catalog operations helping you gain a competitive edge?
- In terms of price strategy, how do you compare to your competitors?
- Do you have faith in the effectiveness of your customer service department?
- What are the industry best practices?
The list of these questions is endless and varies from brand to brand based on the various performing criteria they focus on. All of these questions and more can be very easily answered by e-commerce benchmarking. Benchmarking should not be construed as one-way information exchange or as a kind of industrial espionage. Benchmarking, or the comparison of mutual sharing of information, is the most effective technique of seeing the future, living the future from today, and creating a new future for the organization.
Benchmarking can only be successful and effective if the senior management team collaborates with the lower ranks, targets are set explicitly and clearly, and the results are thoroughly examined and implemented. With the rise of online marketplaces, companies must differentiate themselves through their customer experience, going above the standard offering that we expect from all stores. And benchmarking is the roadmap that will help brands reach their destinations successfully. The following section of the article includes some of the e-commerce benchmarking services which will further help you in understanding the process and the importance of e-commerce benchmarking better.
E-commerce Benchmarking Services
1. Catalog Benchmarking
Benchmarks for measuring the performance of a catalog and its displayed products are the benchmarks used to compare your product to others. Percentiles, like other comparison tools, are frequently used to describe how well or poorly your catalog performs in specific KPIs when compared to the catalogs of similar size and vertical. A company’s relative performance can be better understood by comparing it to industry norms, which can reveal areas where they have a competitive edge as well as areas where they might improve. Finally, catalog performance benchmarks exist so that businesses may determine how to improve their products and services.
2. Price Benchmarking
Price benchmarking is a useful strategy for determining prices to maximize value. It also allows you to evaluate your market competitors’ competitiveness, uncover any performance gaps in their operations, and highlight their strengths and weaknesses. The ultimate purpose of price benchmarking is to closely track a company’s pricing policy and strategy. From a competitive standpoint, it aspires to be on par with industry competitors, particularly those seen as leaders. There is no better method than this for a firm to progressively adjust and improve its services and to look at it through a competitive lens.
3. Customer Service Benchmarking
Customer service has become one of the key drivers for customer loyalty and experience. Benchmarking customer service provides you with quantitative statistics to evaluate your support and better align your offers and processes. Benchmarking your customer service exposes areas where you can improve as well as those where you thrive. Benchmarking your customer service organization against others in your industry allows you to see how you stack up against the competition. It establishes the status quo and provides a benchmark for where you should be. Some of the KPIs essentially turned to while customer service benchmarking are Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), and Customer Effort Score (CES). These metrics help in comprehending customers’ satisfaction, understanding, and loyalty towards the brand.
Benchmarking is an important aspect of the continuous improvement cycle, which also includes measuring, comparing results to competitors, and identifying improvement opportunities. Benchmarking is an ongoing process as businesses and e-commerce platforms keep on evolving and changing. A company’s success depends on its ability to adapt to changing consumer preferences which can be successfully measured and monitored by e-commerce benchmarking.
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