Don’t Benchmark E-Commerce KPI’s (like others do)

Recently, Moz published a blogpost, a guestpost actually, about KPI’s and E-commerce.
You can find it here. If you want to skip reading, I’ll give you a short recap of the post by paraphrasing some lines:

“Our industry is swimming in data (thanks Google Analytics), but at times we’re drowning in it.

Numbers without context mean nothing. Data in the hands of even the savviest marketer is useless without a context to evaluate its performance against competitors or the industry at large.

Which is why we need benchmarks. Through benchmarking, marketers can contextualise data to identify under-performing elements and amplify what is over-performing. They can focus on the KPIs that are important, and recognise whether they are achievable.

Benchmarks also give context to those who aren’t familiar with data. One pain point that digital marketers face globally is communicating their performance upwards. There are very few ‘digital natives’ sitting in company boardrooms these days but plenty of executives who know their numbers inside out.”

Totally agree on this. Context is important, but only if you go into details for tackling problems or improving what already works. The down side of the post? Again, the usual analysis by time on site, bounce rate, conversion rate. And some mobile device and other devices comparison data.

Redefine KPI’s as you know’m

“Our KPI study shows that if you can increase pages viewed and time on site it will push up your conversion rate (content marketing for conversion optimisation anybody?).”

Good to know. Not the focus.
I’m very cautious about these metrcis, page views is one of them:

  • Pageviews
  • Time on site
  • Bounce rate
  • Conversion rate

Here’s why:

Pageviews

You have to cautious with pageviews. If someone is looking for address details or is a returning customers just re-ordering that one product, … bet he/she didn’t visit that many pages as other prospects or customers did. So… average pageviews as a KPI is a no go!

How you could use this:

Set a KPI per type of customer or type of content/product. Now you have a clear insight.
Yet, I’m not convinced this should be a target to focus on. It should be a KPI to take in notice.

Time on site

Again. A very plausible metric but wrong on so many levels to check on a whole site level.
What if I find the product or content that I want faster on your site than on the site of your competitor?

How you should use this:

This metric or KPI should be taken into account if you’re changing the structure and thus the flows in your website. Depending on structure and UX design, time on site could be high or low.

For example, I’ve been changing menu sequences in order to get clients faster to product pages.

Bounce rate

You have to cautious with bounce rates as you should be cautious with pageviews. If someone is looking for address details or is a returning customers just re-ordering that one product, … bet the bounce rate is very high.

How you could use this:

Set a KPI per type of customer or type of content/product. Now you have a clear insight.
Yet, I’m not convinced this should be a target to focus on. It should be a KPI to take in notice.

Conversion rate

I know. Conversion rate is very interesting to focus on. If the rate is high, and the time you can hold onto that conversion rate, your revenue will be a lot bigger, it still depends on which products, how many products being sold in a single card and… very important, at what margin those products are sold.

How you could use this:

Set a KPI per type of product depending on amount of products being sold or margins.
Now you have a proper view on what to focus on first.

Should you care about benchmarks?

I’ll keep it short.
Yes, with a high level  focus.
No, on a tactical level.

I’ll start with the no.
On a tactical level, you shouldn’t focus on benchmarks.
You have no insights at all about how flexible your competitors team is, how much money they can throw at there problems, how they’re planning is for the next quarter, etc.

On a tactical level, you need to focus on improving. Not striving to get the benchmark. Don’t get me wrong. Benchmarks are interesting, but on a tactical level, you can’t get to that benchmark ever. If you’re grades are rising (if all goes as planned), it means another competitor will probably do worse. It depends on too many factors.

Which brings me reading benchmarks on a higher level.

Benchmarks are good to get a feel about how the market is currently translated in numbers.
If you’re below the benchmark of number of pageviews, for instance, you know you’re doing worse than others. The reason why is still not determined. It could be that your site is plain sh*t, you have different and less appealing products, prices, etc.

On the other hand, if you take the average pageviews per user of your website and have good idea of how many possible clients you could have (available in the market), you good get a fairly good guess how much you’re missing of the market, right now.

It means you have to rethink your site, your advertising, above the line and below the line tactics…
You need to rethink your strategy, if you want to have a bigger impact.

My advice: get someone who can translate those numbers and benchmarks in real interesting insights to change your strategy and adapt tactics accordingly. 

By the way…
This is an example how fluffy the term benchmark really is.
Below are some numbers of the mailings my subscribers get.

benchmarks-email-marketing-dries-bultynck