by Daniel Burstein
, Director of Editorial Content
Using data from the MarketingSherpa Ecommerce Benchmark Study
survey, Diana Sindicich, Senior Manager, Data Sciences, MECLABS (parent company of MarketingSherpa), created a weighted success score to determine which factors, tactics and strategies made ecommerce companies the most successful. You can read more about it on page 9 of the Ecommerce Benchmark Study
(made possible by a research grant from Magento, an eBay company).
Where were the biggest opportunities to become more successful relative to the competition?
This analysis identified a few factors that best differentiated survey respondents' success scores:
- Order trends
- Value of products and service compared to competitors
- Gross margin level
- Product and service guarantees compared to competitors
If you are interested in the math behind these opportunities, here it is — mathematically, these factors contribute to 44% (19%, 6%, 14% and 5% respectively) of the total score, but together, they accounted for 69% of variation in success score. This means that positive changes in these factors should be the fastest way to improve your company's success.
In this Chart of the Week, let's look at the data about one of those factors. In the Ecommerce Benchmark Study
survey, we asked:Q. How does your company compare to your competitors in the following?
One of the factors we asked about was value.
Click here to see a printable version of this chart
In the above chart, you can see the answers to this question correlated with the computed success score referenced above.
The best marketing is a great product
While only 1% of the companies with better-than-average product value had a success score below 3, 53% of the companies that offered better-than-average value to customers had a success score between 6 and 9 and 27% of the companies that provided better-than-average value had a success score between 9 and 12.
This data shouldn't be shocking to you and, I would personally argue, it is what most people would like to see in the world: better products produce better financial results.
Choosing where to invest in the business for maximum ROI
However, business leaders have a choice where to invest (or not) in companies. The data suggested that when making those choices, leaders should factor in product and service value as an element that helps sell products.
For example, if investments like research and development, customer service, warranties or higher-quality ingredients for more durable products were looked at as marketing investments instead of costs of goods sold, would it change how business leaders allocate budgets?
With fundamental shifts in marketing and publishing over the last decade, word of mouth can spread quicker and be far more powerful than at any other time in the era of mass production and consumption.
The importance of having better product and service value than competitors is even more important for an ecommerce site than a brick-and-mortar store, since it is so easy for online shoppers to check reviews, ratings and customer feedback (or complaints).
So when you're conducting a competitive analysis, don't just stop at the marketing messages and strategies of your competitors. Also, it's important to truly understand how much value they are providing to customers, and if you can not only out-advertise them, but also serve your customers even better than they serve theirs.
I think one Benchmark Study survey respondent summed it up nicely by saying, "Challenge: Competing sites started offering better services. How Overcame: Adding value-added services."
Related ResourcesMarketingSherpa Ecommerce Benchmark Study
— Made possible by a research grant from Magento, an eBay companyTransparent Marketing and Social Media: Twitter and Facebook are the new Woodward and BernsteinLanding Page Optimization: Simple, value-infused page increases leads 8% in 24-hour testMarketing Career: Why a value proposition makes marketing 'good'