No brand or company exists in a bubble. If you’ve got a great product and a strong market for it, chances are you’ve got some competition. And whenever that’s the case, competitive benchmarking will be highly valuable in keeping your competitors at bay.
Competitive benchmarking is all about knowing where you stand in the market in relation to your competitors. This requires knowing who your competitors are (both direct and indirect), your market share compared to theirs, where they excel, and how they’re keeping an edge on the market (or not). Knowing all of these things, you can make better business decisions to stay a few steps ahead.
Here’s what you need to know about competitive benchmarking and why it matters in your organization.
What Is Competitive Benchmarking?
Competitive benchmarking is the process of using data-driven metrics to determine your company’s position in the market as compared to your competitors. Using these metrics, you can compare your performance to that of your competitors.
Benchmarking requires ongoing effort to see how your position changes over time. New competitors enter the market, old competitors fold, and companies may go through growth periods, mergers and acquisitions, and shifts in a business’s core focus.
Competitive Benchmarking’s Role in Marketing
Marketers are tasked with helping a company position themselves in the addressable market. They need to understand what is it that makes their organization unique and, more importantly, what makes them a better choice compared to the competition.
That’s where competitive benchmarking comes in. It helps marketers answer these very questions, along with:
- Who has the biggest slice of the market?
- Is a competitor getting more share of voice?
- What’s the average engagement rate for my industry?
- Who are my competitors targeting?
- Where are my opportunities for improvement?
- Are my competitors charging more or less than me, and are their results better or worse?
- How are my competitors positioning themselves in the market?
- Where are my competitors finding media coverage?
- How have I improved our brand’s position over time?
Answering these questions supports your marketing strategy with useful data rather than hunches or guesswork. Create a greater level of awareness around what you’re doing and why you’re doing it. Plus, you’ll have the data to back up those decisions to stakeholders.
Benefits of Accurate Competitive Benchmarking
Benchmarking serves to help companies improve three distinct areas: processes, strategies, and performance. Each of these help to improve efficiency and promote business growth.
Let’s look at some of the top benefits of competitive benchmarking:
1. Get an Objective View of Your Organization
Most marketers have a good idea of their brand’s position in the marketplace. But marketers can sometimes be too close to the situation. It’s better to back up your own understanding of your market position with data. That’s exactly what benchmarking aims to do. Get an unbiased look at how you stack up in the market, regardless of how great you think your product or service is.
2. Increase Sales and Revenue
As you uncover new opportunities to improve, your sales and revenue should get a boost, too. That’s the whole point of making improvements, right? You want to create a product that’s better than what your competitors offer. When you do, you’ll be able to capture more of the market as well as retain existing customers so they don’t go to a competitor. Improvements are likely to lead to more sales, greater customer satisfaction, increased referrals, and even more media coverage.
3. Keep Track of Competitors
You might have an edge over your competitors for now. But what happens if they start gaining on you? What about when new competitors enter the arena? Or a competitor shifts course completely?
While you might not follow suit, it is a good idea to keep tabs on what your competitors are doing. If they’re growing faster than you, getting more media opportunities, have stellar content marketing performance, or are otherwise besting you in certain areas, that’s a sign you might need to up your game.
4. Stay on Top of New and Emerging Trends
Benchmarking data helps you find ways to improve your brand’s position in the market. This has become more important than ever over the last few years, given how quickly market conditions can change. With ongoing benchmarking, brands can stay on top of trends that might upend their current position and give them more time to react.
Case in point: the global pandemic. Marketers threw their strategies out the window as lockdowns took place and supply chains were turned on their heads. They had to adapt their messaging, content, and offers quickly to cater to a new normal. This is an extreme example, of course, but it does underscore the fact that marketers need to be prepared for the unexpected. The sooner you can see new challenges coming, the more quickly and fluidly you can adapt (ideally before your competitors do!).
5. React More Quickly to Market Shifts
Aside from trends, market shifts happen that can create new opportunities for brands to grow. Fads and trends come and go, consumer preferences change, and things become popular in different markets all the time. These shifts can help you connect to new audiences that weren’t on your radar before.
6. Improve the Overall Company Culture
Competitive benchmarking not only helps companies find areas for improvement, but also encourages them to take action. It shows you’re committed to keeping the company moving forward, which can help instill confidence among your employees. Helping to future-proof your company increases employee happiness and well-being, productivity, and a desire to continuously improve.
7. Identify Opportunities for Improvement
As the old saying goes, when there are two businesses just alike, one is not necessary. Every organization has strengths and weaknesses. Learning about your competitors’ weaknesses can help you identify gaps in their strategy that you might fill with your own products and services. And knowing their strengths can encourage you to improve on your own offering.
And naturally, you’ll want to know about the same areas in your own company. Improving your weaknesses and building on your strengths can help your company keep growing and maintain an edge over competitors.
8. Spur New Ideas and Innovation
As you uncover new strengths, weaknesses, threats, and opportunities, new ideas and innovation become natural byproducts.
Staying in tune with competitors can help you come up with ideas to improve and innovate, often in ways you couldn’t even imagine. Stay positioned for success at all times, even if you don’t always know what success will look like. It can at least point you in the right direction when you notice your competitors are doing something differently.
9. Avoid Becoming Obsolete
The effect of not innovating can be devastating for a company. It could mean letting your competitors take the lead in the market. Or worse, you might end up edged out altogether.
Take Polaroid, for instance. The company was once the gold standard in instant film photography. But digital technology eventually took over, rendering Polaroid products nearly obsolete. Consumers’ penchant for vintage technology and film in recent years has led to a resurgence for Polaroid, but not before the brand suffered serious damage due to failure to innovate.
Other brands haven’t been so lucky. Kodak, Nokia, and Blockbuster have all nearly gone the way of the buffalo because they couldn’t keep up with the times.
How to Perform a Competitive Benchmarking Analysis
With the above benefits in mind, let’s look at some simple steps you can take to start doing competitive benchmarking:
Define Clear Goals and Objectives
Knowing why you’re benchmarking matters just as much as the process itself. Start by writing down your objectives, which will help to guide the process.
Make a List of Your Competitors
To benchmark your competitors, you need to know who your real competitors are. These will be direct competitors (those who have a similar product and directly compete for your audience) and indirect competitors (those who share your audience but don’t necessarily offer a comparable product).
If you’re not sure who your top competitors are, doing a quick Google search for what you sell and see who pops up. From there, you can do some digging to see who their audience is, their company size, and other details and take it from there.
Establish Benchmarking Metrics
Benchmarking metrics help you focus on the right data to measure. This might be sales, content marketing engagement, media mentions, share of voice, website traffic, SEO, customer satisfaction scores, customer churn, or any number of things that indicate your competitors’ success. Tie your metrics back to your objectives. There are lots of things you can measure, but which metrics will help you achieve your initial objectives?
Collect Benchmarking Data
Once you know the data you want to collect, it’s a matter of putting all of your groundwork into motion. Use competitive benchmarking tools like Linkfluence to learn more about your competitors using real-time data to save manual hours and effort.
Don’t forget: you’ll need to collect data on your own company to have something to compare competitor data to.
Analyze Your Results
After you collect the right data, start comparing it to your own standings. Do a SWOT analysis to see where your best opportunities lie, then develop an action plan for improvement.
Refine and Repeat
Competitive benchmarking’s value grows over time. You’ll learn more about your competitors and how they evolve, as well as see how your own performance changes over time.
How Linkfluence Empowers Your Competitive Benchmarking Strategy
One of the hallmarks of benchmarking success is the accessibility of comprehensive, real-time data. That’s what Linkfluence brings to the process.
Linkfluence uses AI machine learning to collect and analyze digital conversations across the web that could have an impact on your brand. Stay in touch with what your competitors are doing and how other people feel about them. Learn who your real competitors are, see your KPIs at a glance, and improve your competitive position in the market. It’s real-time, done-for-you insight that can make a big difference in how your company moves forward.
To learn more about the power of competitive benchmarking, download our eBook Brand Superpowers: Always Stay Ahead of the Competition.