What Is Competitive Benchmarking?
Competitive benchmarking is the performance measurement of an organization against its competitors. Through a stack of predetermined metrics, benchmarking allows comparing a company's performance against its competitors and other top-notch brands.
Why Do You Need To Do Competitive Benchmarking?
We need to do competitive benchmarking to determine the best performance. It doesn't necessarily have to be about the company in question. It could instead be a competitor or a completely different industry.
The data, however, would allow the company to assess its gaps to gain a competitive advantage.
Benefits Of Competitive Benchmarking
1. Helps Organizations To Get an Objective View
Every company thinks they are the best at what they do. Perhaps, they are. But it's also necessary to get an unbiased perspective. This would help the company to properly understand its areas of improvement and help them get an objective view.
2. Boost Sales and Revenue
As soon as a company understands where it is going wrong and takes steps to improve it, it is in for a show. Once it makes efforts to understand its failings and work on them to get better than its competitors, its sales and revenue get a boost. Improvements help increase sales, greater customer satisfaction, and even more media coverage.
3. Keep A Lookout On Competitors
Even sitting on the top of your throne, you must watch out for your competitors. Through benchmarking, you can analyze their performance and see if new competitors are on the horizon. This way, you can always be one step ahead in the game.
The Challenges Of Competitive Benchmarking
Inadequate Actionable Insights
One of the issues of competitive benchmarking is that there aren't enough actionable, data-driven insights. Having them would allow you to determine what quantifiable success would appear like. They also help to understand best-in-class trends better.
Moderate Adaptations To Strategy
It is imperative to comprehend what is going on in the market. Failing to do so would make a company lose its agility to pivot when the market takes a different shape. Moreover, it won't be able to keep up when competitors change their strategies or tactics.
Trouble With Manual Data Collection
When too much time is invested in manual data collection, there is less time for analysis and insights. This creates a delay in sharing those data with key stakeholders. Besides, when dealing with manual data collection, there is always the risk of human error and inferior data quality.
Types Of Competitive Benchmarking
Performance benchmarking involves collecting quantitative data and comparing a competitor's and yours.
Unlike performance benchmarking, practice benchmarking combines and compares qualitative data based on how people, processes, and technology to process a particular activity.
Internal benchmarking works within the organization. It's about internally assessing your company.
You do this by comparing metrics from various units, departments, programs, geographies, etc., within your organization.
External benchmarking is the opposite of internal benchmarking. It helps you make a comparison between the metrics and practices of your organization with your competitors.
Competitive Benchmarking Metrics
1. Growth Assessment
Website traffic numbers that identify your company's growth rate against your competitors.
2. Ranking Improvements
SEO ranking can give you a clearer picture of how your target keywords work compared to your competitors
3. Social Media Reach
Social media reach gives an idea of the popularity of your company's social profiles against your competitors.
4. Brand Awareness and Share-of-Voice
The success of your brand awareness can be reflected in the traffic numbers. And you can identify the share of voice by assessing the share of traffic.
5. Product Success
Comparing your product's success to your competitor's can help you identify what is working for them so that you can adjust your product campaigns and offerings.
How to do competitive benchmarking effectively?
1. Choose Your KPIs
You must choose the KPI you intend to measure. To set goals that are both measurable and realistic.
For instance, are you looking to improve your SEO performance, develop a new market, or increase traffic to your site?
2. Identify The Right Competitors
You cannot compare yourself with everyone. It is, therefore, necessary for you to identify the right competitors. You can measure metrics such as size, location, product offering, or audience.
3. What To Measure And How
Anything you measure and the approach you take to measure them will vary according to your goals.
4. Track Your Metrics
Now that you are all done and dusted, it's time to track your metrics. To keep it orderly, you should keep separate benchmarking reports for each objective and category of a competitor.
There should also be a schedule to do so at least every quarter. From time to time, you need to reassess whether your set metrics are still relevant to your goals.
Get Started With Competitive Benchmarking
Brands' Social Performance
You can classify the performances of brands against the competition by comparing many relevant metrics, time spent on competitive intelligence analysis, and numbers that adjust for audience size in terms of reach, impressions, and engagement.
Thanks to Artificial Intelligence (AI), you can adequately understand how your competitor's content is touching their audiences. In that way, you can work on improving your content strategy.
Some metrics you can keep a lookout for are: product mentions, hashtags, keywords, etc.
An executive strategy allows you to have an in-depth understanding of the sentiment and engagement of brand leaders. You note the top executive posts and watch for any potential executive crises.
Brand influencer and partner strategies have peaked for quite a while now. You will find new possibilities for enhancing those partnerships as you monitor their real-time impact and share their value.
Customer Care Strategy
When you delve into customer care strategy, you learn from brands how to meaningfully interact with your audience and on which particular channels. Finding out how your competitors resonate with their audiences will enable you to discover exciting opportunities.
The remarkable thing about AI is that it knows how to take things up a notch.
With the help of AI-powered machine-learning models, you can get an idea of whether the posts made by your competitor are paid or organic.
You will be able to gather insight into reach trends, engagement trends, and how the sponsored content of your competitors is performing.
Through brand monitoring, you can monitor the trending content, brand sentiment, and followers and perceive any future crisis of other brands and competitors beforehand.
Frequently Asked Questions
What does competitive benchmarking mean?
Competitive benchmarking means the performance measurement of an organization against its competitors.
Why is competitive marketing important?
It is vital to create a distinction between a company and its competitors. Also, it helps to assess the areas for improvement.
How do you do competitive benchmarking for a mobile app?
You compare your company's mobile app with your competitors'. Assess which features are working and which are not for both your competitors and you.
What are the four types of benchmarking?
The four types of benchmarking are:
- Performance benchmarking
- Practice benchmarking
- Internal benchmarking
- External benchmarking
What are the benefits of competitive benchmarking?
Some benefits of competitive benchmarking include helping organizations get an objective view, boosting sales and revenue, and keeping a lookout on the competitors.
What are some commonly used competitive benchmarks?
Common competitive benchmarks are growth assessment, ranking improvements, brand awareness, and share of voice.
Final Thoughts on Competitive Benchmarking
To sum it all up, you cannot simply keep on doing what's working for you to get the upper hand in the industry.
It would be best if you always kept a lookout on your competitors. In this way, you can retain your customers while acquiring new ones.
Thank you for reading through the article, and good luck on your competitive benchmarking journey!
Looking to maximize your brand awareness? Then check out our article on Top of the funnel marketing!