Competitive benchmarks can be great indicators of where your business stands and where it needs to go. Competitive benchmarking is the process of comparing your company to competitors through the use of metrics. This practice can be helpful because it shows you where your business succeeds and where it fails in comparison to your competitors. Through this comparison, you can determine best practices to accomplish your company’s goals.
Competitive Benchmarking vs. Competitive Analysis
While people often confuse the two, competitive benchmarking and competitive analysis are two different practices.
Competitive analysis focuses on your competitor. It provides an overview of the marketing strategies of competing companies and measures their success. Essentially, competitive analysis shows you which campaigns are successful in achieving their goals and which strategies are not working in your industry.
On the other hand, competitive benchmarks take competitive analysis and identify how your business looks in comparison to your competitors. Benchmarking takes action upon analysis by finding ways to bridge the gap between where your business is and where it wants to be. This can be an incredible tool to help your company achieve its stated goals.
Why Use Competitive Benchmarks?
The benefits of competitive benchmarking are evident. You might be knowledgeable about your own performance metrics, but that doesn’t mean much unless you know how others in your industry are performing. Comparing your company to similar companies gives you context for how your business is doing.
For example, if you’re focused on pushing a specific product, but your competitor is selling a similar product at higher rates, competitive benchmarks can show you the reasons why. Knowing why your competitors are performing better or worse than you can help you determine best practices for your own strategy. You can improve your engagement and keep your business competitive.
By monitoring your competitors, you can see when they are doing well and when they are struggling. Whether you’re interested in emulating their strategies or using their strategies as a guide on what not to do, knowing the metrics of your competitors can be useful for your company’s growth. Additionally, you can apply competitive benchmarks to different sectors of your business. This means that you can decide how small or big of a scope under which you want to look at your business.
How to Conduct Competitive Benchmark Analysis
Identify Competitive Benchmarks
There are plenty of ways to come up with competitive benchmarks for your business. The easiest way to choose your benchmarks is to start with your pre-existing key performance indicators (KPIs). KPIs include the metrics that your business has decided to focus on within its marketing strategy.
Of course, don’t rely solely on pre-existing KPIs. When conducting competitive benchmarks, you should be thinking about ways to broaden your metrics and outcomes. This is the time for you to think about what you’re trying to achieve through benchmarking. Perhaps you want to increase traffic to your site or improve your SEO performance. Make sure that the KPIs you choose are specific to your goals.
Here are ten KPIs to consider:
- SEO strategy
- Customer satisfaction
- Web traffic
- Brand awareness
- Social media engagement
- Return on investment
- Follower growth
- Conversion rate
- Blog performance
- Organic search
The data you choose to focus on in the process of competitive benchmarking is incredibly important. It can be as extensive or exclusive as you want it to be, but it will determine the type of outcomes you receive. Remember, at the end of the day, you’re using this data to improve your business, so choose your KPIs carefully.
The next step in competitive benchmarking is to identify your competitors. This process can vary, again depending on what your company’s goals are. Before choosing competitors to put your business up against, think about what you want to get out of it. Like choosing the right KPIs, selecting the right competitors is crucial.
While you have a limitless number of competitors to choose from, here are a few examples of the type of competitors you might be interested in benchmarking yourself against:
Of course, your first thought when choosing competitors might be a business you consider your main rival. Typically, these competitors will offer the same or similar products and/or services as your company. They also likely have the same goals as your business. When using competitive benchmarks to see how you can improve your performance in a specific area, you’ll want to track your closest competitors first. This will give you a baseline for how your business is doing. For example, if you see your competitor falling down on SEO, you can take action and plan to improve your own SEO. This ensures that your business doesn’t suffer in the same way and will likely pick up the traffic that your competitor lost.
While targeting your closest competitors keeps you up to date on your direct competition and how you shape up next to them, you might also want more for your company. The goal of a business is always to grow. Keeping up with your closest competitors is important, but you can also look at industry leaders for guidance. Even if you’re not close to being the best in your industry, there’s always something to glean from strategies that more successful companies employ. At first, you might feel disheartened by the figures, but you can see how these businesses achieve their success. By doing this, you can use their strategies to identify and treat weaknesses within your own company.
Not only is important to look up to the big guys, but you should also be looking down at the little guys. The reasoning behind this sentiment is simple: they’re coming after you. Smaller businesses could be growing at fast rates, which poses a threat to you. Keeping an eye on small players that seem to be gaining traction can pay off. By seeing who performs well and how they do it, you can keep yourself ahead of the game.
No matter what, it’s important to keep your competitors separate. Create separate reports for different competitors so that you don’t miss anything that should be in plain sight. Ultimately, your aim in benchmarking will determine your competitors.
Measuring Competitive Benchmarks
Now that you’ve chosen a strategy and competitors for producing competitive benchmarks, you can measure your data against others. The only problem? Getting other companies’ data.
You already have your own data, and you’re ready to measure it up to your competitors to see the differences. But how do you get their data? Luckily, a lot of it is public. The drawback is that the programs you use to get it cost you money. One of these programs is Brandwatch, which allows you to track metrics related to you and your competitors, across any topic you want.
As for acquiring private data, things get a little tricky. Many companies can be very protective of their data. And you can’t just reach out to your competitor to ask for whatever data you want. This isn’t to say that you can’t find it. You just have to do some research. Look for press releases, articles, sales reports, and other metrics businesses have released to the public. To find data on bigger companies, Companies House can help.
Track Your Performance
Once you’ve collected the data on your KPIs, you’ll start the tracking process. You should keep separate reports for each benchmark and each competitor. As stated before, throwing two competitors into the same report can get confusing. You should look at these reports when you make adjustments to your marketing plan. This should occur at least once each quarter. It’s important to keep up with these metrics to see if they’re still relevant to your business. You should also stop and assess whether you want to make changes by adding new KPIs or competitors frequently. Competitive benchmark analysis can be an immensely valuable tool for your business if utilized correctly. Like many marketing practices, if not performed correctly, you can risk losing engagement.
Use Competitive Benchmarks to Optimize Your Marketing Strategy
The process of creating competitive benchmarks for your business is an essential part of any marketing strategy. To ensure that you’re meeting the goals that you set out for your business, benchmarking should be done frequently and with care. While it’s obviously not the focal point of your business, competitive benchmarks allow you to view your business in the context of your industry. Your overall marketing plan should include benchmarking, but that shouldn’t be your only focus.
If you’re interested in learning more about competitive benchmarking or other marketing strategies, don’t hesitate to reach out to us at SEO Design Chicago. We offer expert digital marketing services ranging from SEO analysis to advertising and are ready to help you identify your competitive benchmarks!
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