Searching for Benchmarks
Friday, November 20, 2009
Posted by: Bibi Mukherjee
Searching for Benchmarks
Most of the small businesses I talk to or have worked with, have a common concern for lack of available industry trends. We depend on either inside contacts, published competitor collateral or just plain old snooping around in order find out what our industry trends and offerings are.
As a result, small business leadership is plagued by lack of actionable industry benchmarks – how to understand where exactly their performance stand in terms of the either brand position or industry trends.
Google Analytics does a pretty good job with its benchmarking tool. It lets the businesses assess how their website compares against some of the industry verticals. I find this tool to be one of GA’s biggest strengths. More so since there is so little actionable benchmark data available for small accounts (read: businesses).
There’s one catch though. You have to have your data sharing with Google & other benchmarking tools enabled. Sometimes that can be the deal breaker. But I’ve always been in favor of data sharing when it comes to Google since they do this anonymously. All identifiable data from your website is removed before it’s merged with other sites in comparable industry. There is no way you identify any of yours or your competitor’s data from the aggregated result. There is a bonus factor too. With your data sharing enabled, you also gain access to Google’s Conversion Optimizer that lets you adjust your bids to maximize conversions at the minimum price in Adwords.
The initial data presented takes into account all businesses of similar size. But you might want to drill down to your specific trade. GA actually lets you do that. This way you can ensure that the data is more pertinent to your particular business. In this example, I wanted to look at not only travel but even further ; Adventure travel players.
6 top level metrics data over the given timeline is displayed against the benchmarks. It’s important to note that all figures are time dependent. Daily variations are possible due to parallel marketing campaigns and other promotional efforts. But comparing within a similar industry rules out any skew from the seasonality of the business since the seasonal trends of these companies are mostly alike.
Visits is the most basic top level measurement for any industry follower. The fact that this example webpage visits are over 25% down from the industry benchmark right away tells them to get their act together and start working on improving the website, spending more on paid search, improve the quality of the links, landing pages and keywords, get more affiliate partners and network better on social media websites/services. Unless this is a new brand, in which case a benchmark has been established for them to work toward. More on that in a minute.
New visits = prospects = incremental sales. This is therefore a key metric, especially for new products or brands that just launched. The fact that in this example the new visits are about 5% over benchmark, tells me that it’s likely a new brand working to attract prospects and is generating a lot of interest. Over time, however, it can expect this figure to travel south and as long as it stays around 72% (which is the established benchmark) there should be no concern. Expectations set...Bingo!
Bounce rate– Anyone who has worked with me is aware of my obsession with this metric. I don’t know if I am obsessed or despise it, but for sure I can’t live without it. The fact that I’ve worked so hard to get this visitor to come witness my great offering and that he/she is leaving my site right away, without even giving me a second chance, kills me. If it was possible I would recommend the whole world wide web community to solely work towards bringing all bounce rates down to zero, and ban the term bounce rate. But hey, that’s the extremist in me. Sobering down, the bounce rate should never climb above 30%, end of discussion. Even the benchmark bounce rate (60%) in this example is super high. But it is what it is. Let’s accept it & move on.
Average time on site – I would definitely like my visitor to stay on. But there are times when we have them land on a page where all information is provided and they choose to just not look around. I am not sure I like that but that definitely brings down the average time spent on my site. That’s why we need benchmarking. If the visitor is spending around 5 mins on a competitor’s site, am I not providing the quality experience for him/her to spend that much time on mine? What else can I do in terms of value proposition or in terms of uniqueness to improve that? On the other hand, if I am above the Industry benchmark...oh well...what can I say...I've stopped bragging these days.
Pageviews & Pages /Visit – Benchmarking this can be counterproductive. That’s just me. Maybe it’s due to the nature of the business I handle. I am currently establishing a brand whose website has a lot of information on single pages. Also, the page views depends on your product mix. Similar information can be served in different combinations and layouts. But you might have a different perspective on this. Why don’t you share?
There is something else about benchmarking in GA that stands out for me – the ability to visualize my brand positioning. Let’s look at these two examples.
The first one exceeds the benchmarking for every possible metric. From a top level, this is a leader to me, the alpha male!
Compared to that, here’s another brand in the same category tracked over the same period of time. Does it tell you anything? Look carefully. Compare its results to the industry benchmark. To me, it’s either a weak and a struggling brand or a new brand trying to make its mark. More likely the later, looking at the new visits.
What did I miss? How are you guys benchmarking your data? What are your sources? How do you validate? Please share with us.