As a retailer, your journey moves only in the direction of growth. That is why you are always chasing goals. As soon as you accomplish one goal, you make another and set your best foot forward. You can have several purposes, such as increasing ROI, lead generation, or increase website traffic. But how do you understand how close you have come to these goals? Here comes Key Performance Indicators or competitor KPIs.
What are KPIs?
KPIs, in general, are measurable factors or data points that each business generates daily. But from a more focused perspective, KPIs have specifically selected data points relevant to the progress of a goal.
For example, your goal is to improve your ROI. You start with studying your current ROI. Thereupon, you will run campaigns and learn how it impacts your ROI. So, you will look at data categories like sales, lead generation, and a few more.
These same factors that you use to track a goal (the goal being increased ROI) become your KPIs. Hence, for different plans, you will choose varying KPIs.
You can use one or more KPIs to study the progress of a particular project, department, or individual.
Tracking Competitor KPIs for the success of your business
The insights you get through tracking competitor KPIs are crucial to a brand’s retail marketing and decision-making process. That is why it is essential to be specific while selecting them. Let us look at a few of the most critical competitor KPIs.
KPI #1: Price tracking
Money undoubtedly moves in a cycle. On observing, you will understand this flow better.
Firstly, you spend to acquire customers.
Secondly, you also spend to maintain these customers.
Lastly, you earn when customers buy from you.
Therefore, your net profit depends highly on how efficiently you plan. When you start to price track these KPIs, there will be several things to learn. With that in mind, you can make changes to your marketing plans too.
Profit: Make it a point to verify the net and gross profit both. This step will illustrate how high a return they are making, and you can plan your prices well.
Cost of goods sold: look at the money they spend in each step, from production to marketing. This process will help you identify problem areas and, therefore, improve your profit margin. Subsequently, it will help you reduce the costing on each step of production and sales.
Sales by region: generally, each area show different sale trends and hence, your targets differ too. This KPI will help you target their underperforming areas, thus, giving you a competitive edge.
Budget: This KPI will help you learn how much your competitor is spending. Subsequently, you can make the required changes in your account to compete with them.
The expense to maintain one customer: The lower this amount, the better is one’s performance. It also shows how satisfactory your customers’ product is. Thus you can ameliorate your effect.
Innovation spending: this KPI determines the edge they have over you. After that, set your R&D department rolling and come up with more innovative ideas.
KPI#2: Promotions tracking
When you face neck-deep competition, a dynamic and persuasive promotions strategy is a must. Different type of promotional activities helps achieve other goals. For instance, campaigns can attract a new audience. Additionally, it can strengthen the current customer network.
The most common of these promotional strategies are:
Buy more, save more
There are several things that your competitors can help you with. Foremost, you must verify all the means they are exploiting to reach the masses. They can be using any number of promotional methods mentioned in the list above. They can be organizing such campaigns at a certain period of the year. It is vital that you also verify when they hold such drives.
Source: Multichannel Merchant
The best promotion campaign is one that forms a dynamically growing network of happy customers who bring in other customers. So to make the best use of your campaigns, you will have to fix the duration of such campaigns pragmatically. The insights you gained through this KPI again come to your rescue.
You can learn about how much they are spending to gain one visit to their website or the cost per visit. If it’s low, your competitor’s plan is working wonders. So, it gives you a headstart while you are looking for your ideal promotion strategy.
The goal is to optimize this KPI further so that you have to spend less. Additionally, this helps you increase your profit margin. In contrast to this, you can design a new campaign from scratch too. Just keep in mind the insights you obtained from your competitors.
Also, keep in check the promotions they offer on both their websites and applications. If you are looking at coupons, see their validity periods, and how much it provides the buyers. To perform better, you will have to take a step further.
Branded giveaways are one of the most ludicrous gifts. You can offer these to your customers if your competitors are not. In case they already follow this trend, you need to up your game such that it doesn’t feel heavy on your pockets either.
KPI#3: Average rating stats
Ratings are one KPI that very few retailers pay serious attention to. How much ever you praise your products, if your customers don’t do the same, it brings a sad ending.
A bad review hurts way more than a useful review can count to your advantage. The reason being, one happy customer, brings other customers, and this forms an unbeatable network. According to SOCi and LSA’s report, most of the customers don’t make a buy if a product has low ratings. In this accord, 3.5 is the minimum that a customer can opt for.
When you start to verify your competitor’s ratings and reviews as a KPI, you will learn about their weak points. For instance, one study might point out the late delivery or high delivery costs. All these are points that you could use to your advantage.
But also, look at their positives because only that will tell you what you are up against. Collect and collate all these KPI data points and learn about the ratings of their various departments. Go deeper and learn of the factors that affect their ratings. This step will improve your chances of beating them.
KPI#4: Stock availability tracking
As a retailer, it is only profitable that you stock your stores with the products your customers demand. Having low-performing goods will not just take valuable space but also downgrade your potential.
When you look at your competitor’s inventory, you understand two things. Firstly, the quality they are providing and, secondly, the varieties they keep. So, if you want to perform better, you need to have more ludicrous varieties or new varieties. Moreover, your quality should be up to the mark too.
factors of product performance
Only when you give these better choices will you begin to fetch yourself new customers. Another aspect of these products is its volume. A product they have in higher volume has a broader customer appeal. To compete with these products, you need to act smart while building your stock too.
Another crucial point in this KPI is the design of the product catalog. Many a time, these catalogs attract people well before they experience the actual product. This element of surprise works wonders at times. Make attempts to make it attractive by giving out promotions and price details.
Product assortment plays a significant role too. A wider variety in your competitor’s store tells you about them and the customers. To compete well, target the sections that are underperforming in your competitor’s store. This step will give you an edge from the very beginning.
KPI#5: MAP tracking as a KPI
Today’s customers have become more aware of the values their retailers represent. With this in mind, customers and retailers are both looking forward to making a lasting relationship.
For this relation to be purposeful, customers also give importance to connecting with ethically right retailers. MAP compliance is one KPI that makes a considerable part of a seller’s ethics. These are basic rules that are laid down by manufacturers to maintain their credibility. It safeguards their goods against being exploited and sold at any random price.
When you verify if your competitor adheres to MAP, you also learn about their priorities. Many MAP violators unbalance the playing field to gain n number of sales. But in most cases, the product quality isn’t worth relying on. This factor tells a lot about its product quality and its relations with the manufacturers.
At this point, you can score a home run by securing a better manufacturer. Additionally, you will be vouching for the quality of the product by MAP compliance. So once you start to offer something better, customers will be automatically get diverted to you.
To learn more about the rest of the competitor KPIs a business needs to track, visit Part 2 of this blog.
At Datahut, we extract all kinds of data from the web. We work closely with our customers to understand their data requirements and provide them with clean ready-to-use web data for further analysis.
From web scraping to competitor KPIs data extraction, give us the chance to acquire for you the right data. With the proper insight, we firmly believe that your decision-making and hence, the performance will sore. If you are looking for trust and collective effort, contact Datahut.