Competitive benchmarking is a method for those who want to maintain an edge by knowing where they stand. It’s a way of determining the best processes, strategies, and techniques for achieving your business goals via a set of metrics. Benchmarking is valuable to businesses because it allows you to take a deeper dive into how you measure up against your competitors.
By identifying gaps in processes and examining how other leaders are accomplishing their goals, you can maintain your advantage, stay on top of important trends or moves in your space, or emulate their success.
Competitive Benchmarking vs. Competitive Analysis
While competitive benchmarking and competitive analysis are often confused with each other, they serve two distinct purposes.
Think of competitive analysis (or competitive research) as putting your competition under a high powered microscope. You can dive in with as much scrutiny as you’d like. Pick apart their product feature by feature, or deep dive into their brand messaging strategy by seeing how they position themselves in the market.
Competitive benchmarking, on the other hand, is much more akin to placing a GPS tracker on a moving target — it’s a way to monitor competitor motion and long-term strategies. Here, you can measure how others are performing over time and look for trend data. What are they doing month over month? Does seasonality affect their business the way it does yours?
Note: If you’re not sure who your competitors are, this may be an excellent time to complete a competitor analysis template.
Ways to Use Benchmarking
Benchmarking, internal or external, is used in three key ways:
- Process benchmarking: This is about better understanding your processes and finding ways to optimize them. By benchmarking how your competitors complete a process, you can find ways to make your processes more efficient.
- Strategic benchmarking: Companies use this type of benchmarking to compare business models and business approaches to strengthen their strategies. The point is to figure out how to emulate what makes specific companies successful to be more competitive.
- Performance benchmarking. This type of benchmarking is all about outcomes. This could mean comparing anything from revenue growth to social media performance. This can also refer to functional performance benchmarking, like benchmarking the performance of a specific team.
Determine What You’re Going to Measure
Identify your key performance indicators (KPIs). KPIs can include any of the important metrics you’ve decided to track in your marketing plan. If you have pre-existing KPIs, you could work off of those, but you could also go broader.
For starters, look at where you can improve. If your engagement on social media campaigns recently took a dip compared to your competitors’, that could be something you focus on.
Here are a few KPIs to consider:
- Web traffic
- SEO strategy (specifically, top-performing keywords and paid keywords)
- Share of voice (SOV)
- Brand awareness (aided and unaided recall)
- Customer satisfaction (CSAT)
- Brand sentiment
- Social reach
- Net Promoter Score (NPS)
Who Are Your Competitors?
It’s essential to consider who you want to measure your business against carefully. Look at your KPIs, and find businesses that perform consistently well in the areas you’re striving to improve. Note that you don’t have to restrict your search to only competitors — you can even look for companies in a different industry. You could benchmark your business against:
- Similar-sized businesses in your industry
- Similar-sized businesses in a related industry
- Industry leaders
Just like any other business function, competitive benchmarking requires dedicating (at least) some resources to do it right. This means you should be picky about who you run competitive benchmarks against. There’s no use to simply “benchmark against everybody,” so pick who you track wisely.
Decide How to Measure Benchmarking Metrics
Collecting your company’s data is one thing, but what about other companies’? Luckily, SEO metrics are easily accessible. There are plenty of tools that can tell you about a site’s performance, like SOV and social media metrics. However, getting your eyes on private data — the type of information that companies are protective of — is a different matter. Still, this doesn’t mean that you can’t do a little recon by keeping your eyes peeled for competitor news and press releases.
Using Benchmarks To Optimize Your Marketing
The benefits of competitive benchmarking are clear: By comparing your performance to your competitors, you can catch trends early and adjust your marketing goals accordingly. Even better, you can begin to see what your competitors are doing. If they consistently beat you in one of your benchmark KPIs, you can figure out what they’re doing and add it to your marketing mix. Over time, your entire approach could change in a way that you wouldn’t have imagined if you were only staying in your lane.
Companies shouldn’t focus all of their resources on benchmarking — it’s more of a way to view the complete performance management picture to glean valuable insights. What’s most critical is whether your business has defined key differentiators, clear goals, and a data-packed business strategy.
For more ways on how to get an edge against your competitors, read more here.