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Competitive Benchmarking and its Advantages

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01

What is Competitive Benchmarking?

Competitive benchmarking is the process of using a set of metrics to understand your company’s position in the competitive market. It compares the performance of an organization with its competitors. Benchmarking is used to measure and track the performance of an organization over time, in relation to competing organizations.

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02

Metrics used in Competitive Benchmarking

In order to conduct competitive benchmarking, you must identify the key performance indicators (KPIs) you are going to use to compare your organization with its competitors. 

These are a few KPIs you can consider tracking:

  • Net Promoter Score (NPS): A company’s NPS reflects how many promoters and demoters they have. Promoters enhance brand image and draw in new customers, while demoters deteriorate brand image and dissuade new potential customers. 
  • Customer Satisfaction Score (CSAT): CSAT reflects customers’ overall satisfaction with an organization. It is one of the most commonly used satisfaction metrics.
  • Customer Effort Score (CES): CES demonstrates how easy it was for customers to do business with an organization. CES reflects customer satisfaction levels. Customers that put in a lot of effort into doing business with you won’t be as satisfied as those who didn’t put in as much effort. 
Competitive Benchmarking Advantages
  • Brand Awareness

Brand awareness describes the degree of customer recognition of a product or organization by its name. Companies with high brand awareness enjoy increased sales, increased credibility, and increased customer loyalty, among many other advantages. 

  • Web Traffic

The more web traffic a company’s site has, the more customers they are likely to have. If you realise you have less web traffic than your competitors, you can study the strategies they are using to create a high web traffic, in order to do the same. 

  • Brand Sentiment

Brand sentiment refers to the underlying connotations and emotions expressed in a mention of your brand online. Tracking brand sentiment will give you an idea of the different contexts within which your brand is being talked about, and whether it is positive, negative, or neutral. 

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03

Advantages of Competitive Benchmarking

These are a few advantages of conducting competitive benchmarking:

  • Improves organizational culture: Benchmarking allows companies to identify their strengths and weaknesses compared to their competitors. This creates a level of awareness in the working environment, stimulating a culture of continuous improvement.
  • Encourages organizations to set actionable goals: Benchmarking clearly outlines what your performance related goals should be. This not only provides a sense of direction, but also encourages the setting of actionable goals.
  • Helps keep track of competitors: Benchmarking ensures that you constantly keep track of your competitors. This will help your organization be better equipped while dealing with changes within the market, and can help counter competitor strategies promptly. 
  • Identifies areas that require improvement: When you conduct competitive benchmarking, you get a clear idea of your organization’s areas of weakness in comparison to competition. It shows you where you need to improve and by how much you need to improve.
  • Increases Sales and Profits: Benchmarking encourages and enables companies to improve their functions, products, and services. Improved operations are likely to lead to improved customer satisfaction, and higher sales and profit levels. 

04

FAQs on Competitive Benchmarking

Competitive analysis involves doing a thorough research on your competitors. It evaluates different parts of their business, such as their product features or messaging. Competitive benchmarking, on the other hand, involves keeping track of your competitors’ performance over time, with the use of certain metrics.

These are three distinct ways in which benchmarking is used:

  • Process Benchmarking
  • Performance Benchmarking
  • Strategic Benchmarking 

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Great Research
Fast Insights
Best-in-class ROI

Voxco’s platform helps you gather omnichannel feedback, measure sentiment, uncover insights and act on them.

Join 500 + global clients across 40+ countries