How to Benchmark Against the Competition

Competitive benchmarking can help your business better strategize and grow. Through savvy research and careful analytics, competitive benchmarking can give you the edge you need to take on your competition and your industry. But what exactly is competitive benchmarking and how do you do it? Here’s a primer on competitive benchmarking: what it is, why you should use it, and how you can go about using it to better your business.

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What is competitive benchmarking?

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Competitive benchmarking is the act of holding up your company metrics against those of your competition. It helps companies lock down best industry practices, evaluate their performance, and stay ahead of the competition.

In terms of digital marketing, the role of competitive benchmarking is to aid the effectiveness of your own digital marketing strategies based on the insight gained from your competitors. It’s essentially using your competition against them. You’re able to measure key metrics and compare them to your own efforts to gain better insight into successful tactics and movements that can boost your business’ edge in the market.

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Wait, isn’t that just competitor analysis?

There’s a fine line that delineates competitor analysis from competitive benchmarking. Though they’re similar in a lot of ways, competitive analysis and competitor benchmarking serve two separate purposes:

Competitive analysis gives you a detailed overview of your competitors. You essentially scrutinize your competitors’ tactics and strategies to gain insight into their operations.

Comparatively, competitive benchmarking provides a top-down view of your competitive overview. It’s a high-level approach to work out your competition’s long-term strategies, wherein you attempt to gain insights into their actions over a given time period and lockdown general market trends. 

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Why use competitive benchmarking?

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With competitive benchmarking, you’re able to get a clear understanding of your position in the market. It also allows you to uncover potential opportunities.

There are three different sorts of competitive benchmarking and thus three ways companies can make gains in the market through using this method:

• Process benchmarking: Process benchmarking is the process of examining how your competition goes about a given business process. By working out how they operate, you’re able to better understand your own internal business processes and increase their efficiency.
• Strategic benchmarking: Strategic benchmarking is the act of comparing business approaches and models to build more robust business strategies. For example, a new grocer could try to emulate Wholefoods’ success by attempting to better understand their business model.
• Performance benchmarking: Performance benchmarking is the act of measuring strategy outcomes. This might mean analyzing your competition’s traffic generation strategies, social media performance, website analytics, and more.

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Metrics

The metrics you’re comparing when it comes to competitive benchmarking ought to be carefully considered. When it comes to key performance indicators (KPIs) and goals you should keep your metrics simple to ensure you’re able to properly track them over time.

Some KPIs you might consider include:

• Growth assessment: This includes site traffic numbers that will aid you in benchmarking your growth rate against your competitors.
• Ranking improvements: To better determine your ranking, evaluate your competition’s traffic in terms of top landing pages and keywords.
• Social reach: You ought to look at everything from engagement metrics to follower count to help you figure out how to improve your social media efforts.
• Share of voice and brand awareness: The share of voice is the share of traffic from the overall market while brand awareness can be measured through direct traffic numbers.
• Product success: Through evaluating your competition’s top visited pages, you can generate leads on the most popular services and products they’re offering. This, in turn, can help you steer your own offerings and product roadmaps.

Competitive benchmarking is essential

Competitive benchmarking can give your business just the edge it needs to succeed in your industry. Through measuring your successes and failures against your competitors, you’ll be in a better place to strategize down the track.

Now you know everything there is to know about competitive benchmarking.