Using Other Data
The data that you’re collecting with the tools that you use to manage your business is not the only information you can use when making data-driven decisions.
Sometimes, you need something to measure your own data against – which is where benchmarks and targets come in handy.
Setting benchmarks and targets will help you identify whether the data you’re looking at means you’re doing well or not. Is a 2% conversion rate a success or a failure for your business?
In this lesson I’ll show you how to create benchmarks which will help you to set targets for each of your KPIs.
Benchmarks have a variety of different meanings that ultimately mean the same thing: a piece of data from which to measure others.
Throughout this lesson, I’ll be referring to benchmarks specifically as an initial value from which to determine what your current situation is and set targets for the future.
By having this initial value, you’ll be able to determine how well you’re doing in the future.
Using industry benchmarks alongside those from your own data can give you a great overall idea of how your business is doing (as well as help you set targets).
There are some limitations to industry benchmarks, including the data being tracked incorrectly, different approaches to business, and different strategies, but this doesn’t mean you shouldn’t use them—rather, you should use them as a guideline.
There are many places to find industry benchmarks, from Gartner to Forbes, blogs, and digital agencies—some of these being free, others being paid for with cold hard cash, or worse, your email address!
You could look at benchmarks for eCommerce as a whole, or you may find it more beneficial to look at benchmarks specifically surrounding your industry, such as travel, jewelry, etc.
You should remember to check the recency and size of the study. The internet is a constantly evolving medium (remember, until five years ago, there was no Snapchat!), and the sample size of the study can have a huge impact on the final results.
One easy-to-access place to get benchmarks from is Google Analytics. Google anonymously shares (once enabled) data from your own and other websites from your analytics accounts so that you can compare your data with others in your industry.
In the benchmarking report, you’ll be able to compare channels and device and location data with others in your industry.
Google will also tell you how many sites are contributing to the data, so you can make judgments on how realistic the data is based on sample size.
What’s great about Google’s benchmarking data is that you can adjust the data you have based on industry, country/region, and size by daily sessions.
Though Google will have a default of each of each of these, you can still adjust them to see how the data changes. Perhaps you want to see how you’re measuring up for sites in the US only, or you want to see the breakdown of channels for bigger sites.
Having looked through this data, you’ll be in a better position to make your first data-driven decision: setting your targets.
Next: Setting targets—how to work out achievable and relevant targets.
Share with friends