Every business is trying to outrun others competing in the same industry. It is often frustrating to figure out what they are doing better that helps them to succeed. This is where Competitive Benchmarking comes to the rescue.
Competitive Benchmarking simply means comparing the performance – Online or Offline – against the performance of other businesses aiming for the same industry and target market.
The insights gained from observing competitor’s performance can help identify the blind spots and issues your marketing and sales efforts may have. As a result, it can help locate those areas and provide ways to improve the performance – overall and of specific teams – of the company.
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You know how you are performing based on the outcomes of your own performance metrics. But you cannot measure your growth by only comparing your current performance with the previous year. While it does give you valuable insights it is not enough.
The process of Competitive Benchmarking gives you the opportunity to discover ways to improve and achieve your business goals. You identify what your strengths and weaknesses are. You exploit your strengths and key elements and resolve your weaknesses. At the end of the process, you gain an advantage over your competitors.
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You know you need to conduct Competitive Benchmarking but you can’t seem to figure out where to start. Refer to the steps and follow them to understand how you can start with your own Competitive Benchmarking process.
Take a look at how you run your own marketing and sales campaigns.
You need to understand the techniques or strategies you are using in your business. Start by observing the methodologies used to operate the business. This will lead to the next step, that is, choosing what metrics you want to measure.
Based on how your internal process is working and the business goals you want to achieve, you need to consider which metrics to measure.
You need to find which metrics you want to focus on based on what your company goals are. Ensure that your goals are realistic, measurable, and attainable.
Some Metrics you can follow are:
The selection of competitors depends on what metrics you choose to measure. Here’s a list of different types of competitors you can perform a Competitive benchmark against.
Immediate Competitors: Compare your metrics to those businesses that are similar to your company in size or market positioning. You want to track those businesses that are also competing for the same niche with the same business size as yours. This will give you the opportunity to figure out how to gain an edge over them.
Key Industry Players: These are the competitors who are always outperforming you. They are the best-in-class when it comes to strategies and tactics. Comparing your performance with them can help you understand how they manage to consistently perform better than the rest.
Gaining insight into their winning strategies can help you understand how these successful businesses are always so competitive. You can learn and improve your own methods and tactics in order to achieve your business goals.
Industry Disruptors: Companies with innovative ideas and strategies that often challenge the standard rules to have the potential to grow faster than any other company. Observing and comparing their performance with yours can teach you how to stay ahead of everyone else.
You know which metrics you want to measure and who your competitors are. The only step left to do is measure and compare the metrics.
There are lots of different ways to measure the metrics.
To achieve the growth you may want to track your web traffic. You may find that increasing web traffic results in higher sales.
To increase social media reach you need to monitor your social engagement against your competitors.
Monitoring sales is easier in public companies. You can look at the quarterly financial reports.
After comparing all the data now is the time to learn from the insight. From the insights you can understand their strategy and tactics to get a view of how your competitors maintain their success and competitiveness.
Separate the benchmarking reports according to each goal. Look into these reports every time you need ideas to plan your strategy. Evaluate these metrics from time to time if they are still relevant to help reach closer to your goals.
Competitive Benchmarking helps you understand what you lack and how you can improve. It gives a logical perspective and helps make sense of the competition in the industry. Comparing against other businesses helps identify blind spots in your business process and strategies. As a result, it gives you the motivation and ideas you need to achieve your goals.
There are three types of Competitive Benchmarking:
Process: Learn and understand what is lacking in the internal process of your business.
Strategic: Strengthen the strategies your brand adopts for marketing and sales purposes.
Performance: Compare the performance – overall and specific team – of the company.
Competitive Benchmarking helps to understand and evaluate the current position of your brand in the market. It shows the stronger and weaker element in your performance in comparison to your competitors. In the end, you get a clear view of the areas you need to improve and learn ways to improve your strategies from your competitor’s performance.
Internal Benchmarking refers to the process when a company evaluates the performance within the company itself. It looks into the methods and practices used in the process of the business to determine what is working and what is not. The aim is to lead the organization by improving the inner working of the business.
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