The concept of customer experience has always focused on meeting customer requirements and preferences. Companies have been focusing on building strategies to foster loyalty and drive repeat purchases. In recent years, the medium of marketing and customer interaction have shifted. Earlier, companies mostly relied on word of mouth and advertising to provide a personalized customer experience.
With the rise in digitalisation and competition, the brands are integrating technology and internet to collect customer data and provide a personalized experience. Advent of multiple social media platforms has enabled marketers to connect with their consumers at multiple levels.
To build better strategies and meet customer expectations, it is essential to understand the changing customer behaviour.
How has Customer Behaviour Changed in Recent Years?
There is a rise in E-commerce brands providing convenience and comfort of shopping to the customers. Footfall in brick-and-mortar shops has dipped. The latest trends are driving retail brands to adopt integrated customer experience, while E-commerce are striving to provide omnichannel experiences to retain their customers.
According to a report by MoEngage, in Southeast Asia alone, Daily Active Users(DAUs) of E-commerce, retail, and D2C businesses have surged by 13.3% in 4 months in the year 2021.
A similar uptrend has been observed in the Monthly Active Users(MAUs) of the same brands, attesting that customers have been increasingly adopting online shopping through mobile apps and websites.
Why Perform Competitive Benchmarking and Analysis?
Brands opt for competitive benchmarking to analyse their position in the market against their competitors. Comparison of performance, services, products, and practices with their competitors empower them to identify key strengths, weaknesses, and areas of improvement. It provides them valuable insights to enhance their operational strategies and set realistic performance goals.
Moreover, understanding the competitor’s customer value proposition helps companies differentiate themselves and create unique selling points.
In short, competitive benchmarking and analysis empower businesses to make data-driven decisions, stay agile and gain competitive advantage.
The Status Quo of Modern-Day Customer Engagement Benchmarking
The huge amassing of data in the recent past and the twin application of analytics and business intelligence have given competitive benchmarking an unusual twist. Consequently, it has become the most potent tool for small businesses to stay in the game.
AI-powered, brand-focused benchmarking platforms can now curate and conceptualise robust data to help you use competitive intelligence in your customer engagement. Incorporating competitive benchmarking into customer engagement strategies helps businesses stay informed, customer-focused, and poised for success in today’s dynamic business landscape.
The Six-Step Approach To Perform Customer Benchmarking
about the aspect of customer relationship that you seek to elevate to industry-best levels. In this time and era, running behind transactions alone is seldom worthwhile. Businesses with an online presence should instead focus on user engagement benchmarks. How intelligently you engage with customers and respond to their sentiments will invariably have the highest impact on customer retention and customer growth.
Let’s have a rundown of the steps to executive it:
Step 1: Determine the What and Why
This is the first step, where you sit with team members, partners, and managers for a rigorous brainstorming session about the weaknesses or challenges that you wish to target through this approach. Having clear maps and matrices broken into definite goals and sub-goals is crucial in getting the next step right. To get the most out of competitive benchmarking, it is essential to acknowledge the peculiarity of your business and the immediate ecosystem where you operate.
For instance, as a retail E-commerce business, your benchmarking objective could be to improve customer engagement at a certain YoY percentage or to monetise customers you were engaging with.
Step 2: Identify the Drivers and KPIs
While the classical benchmarking framework remains the same, the drivers and Key Performance Indicators have evolved concurrently with the rapid digitization of interaction channels.
KPIs are a set of quantifiable metrics or measures that an entity uses to gauge, analyze and compare performance linked to a broader function or process. In a tech-driven business environment, identifying and matching relevant drivers with objectives requires considerable foresight and market knowledge.
Customer engagement KPIs can include product usage frequency, raising support tickets, upgrades, renewals, in-app actions, web traffic, etc.
Step 3: Set Measures for each KPI
Let’s say you’ve successfully identified the KPIs. Now it’s time to find a way to measure them in the context of your business accurately. If you’re looking at voluminous data, extraction and data mining tools become indispensable. Even a simple Google Analytics report can go a long way to serve the same purpose for micro and small businesses. This highlights the need for setting adequate measures for each KPI in customer benchmarking.
Some measures for user engagement benchmarks are the number of Daily or Monthly Active User engagements, Click-Through Rates, or Conversion Rates from various communication channels.
Step 4: Analyse the Current Situation
Identifying the measures for your KPIs is one thing, but quantifying the measures and executing the process can be arduous. In some cases, running surveys can show where you stand regarding the measures, but they can cost you money and time. With free-of-cost surveys, the response rates tend to be lower.
With the advent of data analytics and BI tools like Tableau, Power BI, etc., you can collect, sort, and visualise extensive data in insightful forms. This goes a long way to help you analyse the current situation.
Only when you have a concrete idea about your present performance can you strive to bridge the gap between you and your chosen benchmarking competitor.
Step 5: Decide who to benchmark
Deciding whom to benchmark is also something that you need to deliberate critically. Merely because some player is the industry’s best doesn’t necessarily mean they will be the right fit as your benchmarking competitor. Every business operates in different demographic, geopolitical, and economic environments.
Limiting benchmarking practices to the primary industry often becomes ineffective in the online space. A befitting benchmarking competitor should ideally have similar KPIs as yours and cater to the same class of users and customers. Sure, you can also draw insights and inspiration from best-in-class disruptors and innovators.
But a word of caution here: Straightaway adopting and integrating what the benchmarking partner has implemented might turn everything topsy-turvy for you. However, your past experiences with customer engagement and the unique competence of your team can help tailor the competitor’s actions and strategies to suit your organisation’s goals best.
Step 6: Track and Monitor Performance Periodically
Now that you have taken actions around the what, why, and how of competitive customer benchmarking, you have to track and follow up on the execution after certain intervals. A tracking dashboard where you can aggregate various types of benchmarking reports can come in handy to assimilate the status of your progress so far. This step cannot be a one-time action and needs to be carried out consistently until the targeted level of performance is reached.
Sure, the business behemoths have the money and hostility to capture the lion’s market share. But as a smaller business, you have one significant advantage over them – greater flexibility and agility. Use that to your best advantage to quickly adapt to changing times. Employ competitive customer benchmarking as a strategic tool while also focusing on personalized and meaningful user experience to carve a place of your own. Use the boon of technological advancement to study and visualise actionable data from freely available resources.
For some great resources and rich information on KPIs and Metrics around benchmarking in different industries check out the MoEngage Customer Engagement Benchmarks, KPIs, and Metrics Report| 2022 (Southeast Asia).
