What Is Competitive Benchmarking - Benefits, Analysis And How To Do It
What is competitive benchmarking?
Competitive benchmarking involves the comparison of one company’s performance against the performance of its competitors using a set of relevant metrics. The whole idea is to learn from their strengths and dig their weaknesses. Competitive benchmarking analysis is dynamic and subjective to every business and its departments, being as broad or as granular as you like.
3 Types of Competitive Benchmarking include:
- Performance Benchmarking
- Strategic Benchmarking
- Process Benchmarking
Benchmarking against competitors not only provides you with a comprehensive overview of your company status but also ensures that informed business decisions are being taken from your end. This helps businesses retain a strong position in an increasingly competitive landscape. Professional tools like Locobuzz help businesses gather insights to build future strategies.
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Explore how Locobuzz can improve your business with competitive benchmarking
Easy 4 step process for competitive benchmarking
1. Goal identification
Getting clarity on what is it that you want your business to achieve? How do you want to utilize competitive benchmarking analysis for your company’s growth? What is to be done after comparing the overall performance or focusing on how your product search compares to a similar feature of your competitors’ websites?
2. Decide on your key business objectives
The Key Objective of the Business should not be messed up, it should be clear. Understand how to generate leads for your products. Identify the key objectives of your brand. This could be sales, getting users to sign up for a newsletter, generating donations, and view ads or contact to arrange a service.
3. Selecting competitors
With competitive benchmarking, there are three competitor groups that can be beneficial to measure your businesses performance:
- Direct Competitors, these are the closest ones. With competitive benchmarking, based on their strengths and weaknesses, studying their size and experience, brands and businesses can make effective decisions and identify immediate opportunities for the near-to-midterm future of your organization
- Biggest players in your industry i.e. the second group. While competitive benchmarking analysis against these household names may seem unsettling, it can help you to evaluate where you want to be, and which process you’d follow to get there. It can identify all common approaches between you and your competitors, as well as highlight areas where you may be weaker for facilitating improvements.
- Smallest companies comprising the third group – These might not be in competition yet. However, these small companies can emerge quickly as they’ve been doing the right things. Using competitive benchmarking you can study their behavior and avoid them from catching you up.
4. Identifying metrics
Suitable metrics are something that businesses need alongside Competitive benchmarking to identify potential competitors. The beauty of using competitive benchmarking analysis is that there is nothing right or wrong in this. It’s flexible and subjective to your own business needs. It lets you select the metrics that would help you, and choose those that can generate the biggest outcomes. Some possible metrics to consider include:
- Audience sentiment Technology
- SERPs visibility and awareness
- Web traffic
- Marketing objectives and strategies
- Share of voice
- Social reach and engagement
Benefits of competitive benchmarking
Competitive benchmarking is a great way to increase your business’s success. It can help you better understand what the competition is doing and how they are succeeding, it can improve your marketing strategies, and even make your business more efficient. Benchmarking isn’t just something that big businesses do – anyone with a website or product can benefit from this type of research. If you’re interested in learning more about competitive benchmarking, read on!
The informal tone makes the reader feel at ease while still being engaged by the topic. The goal of this blog post is to inform people about competitive benchmarking so that they might learn from this information as well as be drawn into reading more posts like this one in order to stay informed!
- Competitive benchmarking analysis can help you identify threats and opportunities
- Compare your strategy to that of your competitors
- Analyze the possibility of acquisitions or divestitures
- Understand why customers are buying from competitors
- Evaluate how well-known your company is amongst potential prospects
- Complete overview of your competition
- Save time and energy by utilizing a proven process
- Gain competitive advantage against other businesses in the industry
- Inform strategic decisions with meaningful data
How to choose competitors to benchmark against?
There are a variety of strategies to consider here for competitive benchmarking . Your competition and your relationship with them could be wildly different and so the person you include is contingent on what you hope to achieve.
Competitive benchmarking against your most rival competitors is one possibility. It is likely to be the ones closest to you in regards to size and performance. This gives you an accurate overview of the businesses you’re competing directly with and those likely to follow following you.
This is a fantastic option to plan for the future and maximize immediate opportunities. It is possible to spot your primary competitor’s SEO performance declining in the past few months. It could be a good idea to plan your SEO task to recover the traffic they’ve lost and make sure that does not happen to you.
Naturally, it is possible that you could have greater goals than battling your closest rivals. You could be looking at the largest and most prestigious within your industry and plan to be one of them.
In this case, competitive benchmarking is possible against them and give you a better idea of how you can attain their success. These numbers may seem like a lot of work initially, but after some study and research, you could discover common strategies among larger corporations, or specific areas that you’re not as strong in comparison to them.
It’s certainly not as easy as doing what the best people do but it can provide you valuable insight into how they function and operate. This also provides a glimpse into how they lay the foundations for their future activities and plans.
Another strategy for competitive benchmarking is to take a look at the table. There are always smaller businesses taking advantage of others. In a period where disruption is threatening whole industries, it’s an error to not be attentive to the smaller people.
The practice of benchmarking against smaller players is a good idea. This means you will be able to see who’s doing well and what they’re doing. This way, you’ll be prepared as they become faster and more effective and then catch up. This will help you avoid being caught out of your guard.
The ultimate goal of competitive benchmarking will determine which people to include. Keep in mind that throwing all of the people, large and small all together could result in your report becoming sloppy. Do not let the data become obscure and conceal important information from the plain website. Divide your competitors into separate reports that will meet your desired goals.
Competitive benchmarking analysis
Competitive Benchmarking Analysis is the analysis of the strengths and weaknesses of competitors in the industry. It provides a complete overview of how useful and important the approaches are in attaining the company’s desired goals & objectives.
Benchmarking on the other hand is a periodic research method that studies and identifies the ideal processes and outcomes that could work upon as a guide for businesses to make internal improvements for higher efficiency and effectiveness.
Competitive benchmarking & analysis: key methods
A few of the related techniques and methods that are crucial and recommended for effectively managing competitor analysis & benchmarking are:
- Consumer buying behavior
- Customer research & analysis
- Partner analysis
- Macro-environment analysis
- SWOT analysis
- Digital marketing laws
Analyze results – Understand how well your product is performing against your competitors. Social Media listening tools will help gather the right data and provide KPIs. However, the bigger picture lies in understanding the trends across sites and the strengths in competing designs. Base your future design decisions on the results of the analysis and avoid the mistakes your competitors made with the designs.
Competitive benchmarking analysis makes sure that you are going on the right way! Well, competitive benchmarking is a way of measuring a company’s performance, processes, strategies against a number of competitors using a set of metrics.
Measure benchmark metrics
Private data is difficult to get access to as businesses are cautious while releasing their data publicly. However, SEO metrics are publicly available, so it is easier to access these metrics.
Businesses are recommended to seek professional help such as data analysts or brand monitoring tools to ensure they have the right information needed to excel in performing competitive benchmarking and generate clear, actionable insights. Big Businesses and brands these days use complex techniques such as Social Listening to generate a comprehensive dataset. This can help them compare performances, determine where their competitors stand in the market, and create the necessary plan of action.
Locobuzz helps you derive detailed social insights for customers, businesses, brands, and competitors to strategize brand positioning, build engagement, and most importantly gather detailed analysis of the digital ecosystem and competitive landscape.
Traditional Method also involves doing your own research. You can carry out competitive benchmarking surveys and can ask whatever you want for the people of your choice. Do it openly or privately – the choice is yours. The drawback of this method is – it costs businesses time and money.
How can competitive benchmarking go wrong?
A few of the common pitfalls that one must be aware of are:
- Being unclear about your goal and why you are benchmarking
- Failing to not know the right tools and resources that can be utilized
- Competitive benchmarking and competitive analysis isn’t a one-time thing but an ongoing process
- Thinking your competitors are the same. Often you need to opt for out-of-sector benchmarking to be the best in class
- Not taking immediate action. You need to prioritize actions and then cross-check or review if the actions worked or not
The important thing to remember about competitive benchmarking & intelligence is that it’s not just about your competitor’s performance but also, it’s about how you compare to them. It’s also about how you can turn your insights into actions to best serve your customers.
The key to successful competitive analysis is benchmarking yourself alongside your competitors and identifying wherever the gap is and then showcasing your solution and positioning yourself as a market leader.
Frequently asked questions
Benchmarking is the process to measure the performance of a company’s products or services against that of other businesses thought to be among the best in its field or industry. The goal in benchmarking is to find internal areas for improvement.
There are 4 different types of benchmaring :
- Internal Benchmarking
- External Benchmarking
- Practice Benchmarking
- Performance Benchmarking
Competitive Benchmarking is very important because it helps a firm to identify their threats & opportunities, keep track of competitors, understand market / customers and hence improve marketing strategy directing towards the success of the business.
Execute Competitive Benchmarking through the following steps :
- Select your competitive benchmark materics.
- Identify your competitors to benchmark against.
- Create the report of competitive metrics.
- Conduct and Measure Results.
- Implement Your Further Strategies.