The best user engagement strategies come from internal data. Here's why benchmarking against others won't give you the same results.
Remember what your mother always used to say: “You wouldn’t jump off a bridge just because your friends did.” It’s true for skipping school, and it’s true for user engagement. Product benchmarking may seem like a good idea, but it’s essentially jumping off of a bridge because your competitor did, and as a long-term product strategy, it leaves a lot to be desired.
To be clear, not all kinds of product benchmarking are harmful. As we’ll argue later, internal benchmarking is one of the most efficient ways to improve user engagement. But performance benchmarking, where you compare your data with your competitors’ data, is a terrible way to enhance your product experience. At best, you’ll make good decisions by accident; at worst, it could drive your user engagement off a cliff, wasting your time, money, and a whole lot of effort.
Product benchmarking doesn’t help improve user experience, because there isn’t a more reliable marker of what engages your users than your actual users. Competitor benchmarks are just noise. Focus on the people who use your product and the internal data you collect about them, so you can build a product designed to stick with your users, no bridge jumping required.
Competitor numbers don’t impact your numbers
In performance benchmarking, companies attempt to compare their KPIs with the numbers of their competitors. Conducting performance benchmarking requires hours of research to find relevant data. For so much effort, you’d hope for a killer payoff, but what do you actually learn? Not much, unfortunately.
To see why this won’t help, let’s do a thought experiment. Let’s say you have a SaaS product and you want to improve your customer service. So, you decide to benchmark your NPS scores and average resolution times, along with a host of other metrics against industry leaders in customer service.
To do this, you spend a lot of time collecting data on these companies, as they won’t just give it to you, especially if you’re a competitor. Then, when that’s all done, you compare your data and find the real measure of your company. Now, you think, the way forward will be clear because either:
a. You’re better than the competition, so you vow to continue improving to keep that competitive edge
b. You’re worse than the competition, so you vow to continue improving to overcome their competitive edge
Do you see the problem? If this is important to your business, you’ll want to improve it regardless of how everyone else is doing.
Some will argue that the value of benchmarking is showing you that you have a problem in the first place. This also rings false, however, as internal data will tell you that. Have a sales problem? MMR data will tell you that. Have lousy customer service? Your customers will tell you that. Have poor user engagement? Your churn rate will scream that from the top of the hills. If you’re doing poorly, you don’t need to peek at your competitors. Your customers, KPIs, and bottom line will be quick to tell you for free.
Benchmarking leads to a follower mentality
Okay, so the data isn’t going to point you in the right direction, but you can still use benchmarking to look at what others are doing well, so you can copy their good ideas. Well... not so fast. Another danger of relying on product benchmarking for user engagement is that you can fall into the trap of following what works for others while ignoring what your specific customers actually need.
It’s incredibly rare that any two user bases are going to be identical. Regions, demographics, and interests will all vary, even among companies in the same industries. Think about the average Walmart shopper vs. the average Whole Foods shopper vs. the average Costco shopper. A user engagement strategy that works for Walmart might be off-putting to a Whole Foods shopper and vice versa. So an idea or process that engages users for one company might have the opposite effect when implemented blindly in a completely different environment.
For example, gamification has been a big engagement strategy used in many apps. Making the app have game-like characteristics encourages users to come back every day, even when the activity isn’t entertaining, like a step counter. Seeing how successful gamification has been in other apps, you might decide to implement a gamification system to improve your platform’s engagement. Maybe it works. Or, maybe your user base is comprised of business people who have no interest in “leveling up” while they’re working. As a result, your gamification systems make your app feel unprofessional, and your user engagement plummets.
Keeping an eye on what your competitors are doing to improve user engagement is not an inherently bad idea. But basing your decisions on the fact that, “well, it worked for them” is asking for bad things to happen. So keep your eyes peeled for new ideas, but your bread and butter needs to be internal benchmarking if you’re going to find success with engaging your users.
Internal benchmarking is the path to growth
Instead of focusing all of your energy on what others are doing, it’s far better to focus inward and find paths to grow through your own data. What excites your users? What brings them back time and time again? Answering these questions with hard data from your product is how you find new ways to improve user engagement.
Internal benchmarking starts with setting a baseline of KPIs and data to compare against later on. Do this by:
Now that you know how different segments of your audience engage with your product as it is now, create hypotheses based on this data. Do certain segments favor certain features? Who is most likely to be power users? What about your product works so well for some segments but falls short for others?
With some hypotheses ready, test them out using A/B testing. This test data will show you whether your changes had the desired outcome by comparing them to your general benchmarks. Now, repeat. Repeat often enough, and over time you’ll build an optimized and personalized experience for each of your users, engaging them in the ways they need.
Look externally for inspiration, look internally for data
Internal data is the best way to improve your user engagement, but that doesn’t mean you shouldn’t look for inspiration in the wider world. Take a look at what other companies are doing and consider trying out the newest trends in user engagement to give your users the best possible experience. However, whether you implement a new process or flow needs to come down to your user base, not data from someone else’s. So even when other people’s numbers look too good to ignore, never forget to run new ideas by your north stars, your mom and your own users.