Here’s what I learned this week

Benchmarking is stupid.

It’s incredibly popular in our industry but it doesn’t make much sense.

The problem is no matter what you’re numbers are you should always be looking to improve them and that comes from better understanding who your customers are and how to help them.

It’s also not just about one stat but all your stats in aggregate.

My beef with Benchmarking

“The average conversion rate is 2%”

“30% of your revenue should come from email”

“85% of people abandon carts”

“Your popup should have a 12-15% opt in rate”

We’ve all heard these stats, hell some of us have actually used them to justify and report on performance, I know I have in the past.

What do they even mean? Nothing actually.

Quantity does not equal Quality. You need both.

So the way that benchmarking works is that people take an average across a subset of data to determine where you fit on this giant aggregation of data.

The problem with this is that it includes a lot of outliers as well.

But it’s entirely useless because every business functions differently and every business should actually be benchmarking against their own numbers, not everyone else’s.

Outliers.

I want to be like this guy in business. 87 years old destroying the field.

The problem is if he was benchmarking against the rest of the field rather than his own times, he wouldn’t have trained as hard, tried as hard or finished as strong.

This is the problem with benchmarking.

Also he probably wouldn’t do as well in another event that wasn’t running.

A lot of the time the KPIs that we’re measuring happen in a vacuum.

They all impact each other too.

Drive more traffic to your website that isn’t quality watch your conversion rate fall.

Send out a sale email to existing customers that have previously purchased, watch your conversion rate spike.

If you only do drops via email, more than 30% of your revenue is going to come from email.

If you’re Google’s Nest, you were only allowed to send out 1 email to customers per month.

True story on that one.

We were sending emails to our list at LIFX every 2-3 days and yet Nest wasn’t allowed to send more than one per month as a company policy because it wasn’t a good reflection on their brand.

So every time I hear about some sort of data aggregation benchmarking I just chuckle to myself because every single KPI can be gamed.

I have gamed all of them.

Let’s go through how to optimize vanity numbers because there are some lessons in what some businesses should probably do.

1. Higher Open Rate on Emails

Remove people from your list that don’t purchase or open emails in the first 45 days.

2. Higher Conversion Rate

Send out an email to a rotating email segment of purchasers with an offer or sale. Really want to make this happen, send them an offer on something that have purchased previously.

3. Higher Email Sign Up Rate

Have people sign up for a free gift card that requires them to checkout or just do a giveaway with a real big prize.

4. Drive more traffic

Run a giveaway and promote it via ads.

I haven’t found one KPI that I can’t game at this point.

So instead of looking to benchmarks, just look to improve your communication with your audience in a way that balances stats and figures while strives to be like our 87 year old sprinter up there, dedicated to just doing the best we can individually with our business recognizing that the better the customer journey we can create the better success we’ll find.

Update on my UGC play for acquisition

It failed in epic fashion to drive new customers.

Reasons why it failed-

1. We had another offer that was more clear and a better deal

2. It was too complicated and had too many steps

What happens next?

All is not lost, working with Shopify Flow to reuse the existing structures set up to allow existing customers to be able to take advantage of a revised offer following the same flow, by opening it up to our list of customers that have purchased more than once, we should get some traction from people that like our product.

This should result in enough UGC to fill our organic social for the next 3 years.

Although it won’t check my box on acquisition, I do believe in investing in our existing clients to drive growth.

It gets better though, we’ve worked out a path for them to be able to do this and also get paid a cut from all sales resulting from any ad they are featured in.

More on this to come, still doing some testing to make sure it works properly but if it works out I like this as a play moving forward for most brands.

The best part is you can do 90% of this all natively in Shopify without the need for too many extra apps. 🙂 

Now we just have to test.

Getting closer to a framework for some of my other projects

I’ve been waffling over a few different projects lately but have been working towards finding a solution to a few different things I want to accomplish.

This is vague but I’m hoping to have a few announcements around this in the first half of this year.

The Takeaway

Your biggest competition is yourself, stop worrying about how everyone else is doing and focus on just improving yourself.

Join the slack

Have a great week!

-Jon

Catch up on past posts: https://ecomwithjon.beehiiv.com/

You can learn from me: jonivanco.com