Competitive benchmarking is basically the process of utilizing a variety of metrics in an effort to compare the success of your brand with its competitors as well as the overall market.
Basically, it allows you to determine where you stand within your industry.
This particular comparison method allows your business to evaluate your overall performance, identify best practices within the industry, and move forward with a plan that will allow you to maintain an edge over your competition.
Confused? That’s alright. Put simply, competitive benchmarking is designed to:
In order to identify where you are lacking, you must compare your efforts to the efforts of your competition.
You will identify the companies that are succeeding in customer engagement so that you can spot the practices and strategies they’re using to engage customers — more specifically, the practices and strategies that you aren’t currently utilizing.
Why Should Your Brand Use Competitive Benchmarking
The information that you gain from performing competitive benchmarking gives you a bigger picture of how your business is performing in comparison to your competitors.
This data will allow you to not only compare your performance against the competition but also the standards within industry, along with identifying potential opportunities to improve and the ability to set reasonable goals.
You essentially have the chance to pin down industry norms and whether your business is meeting the expectations of the industry.
Further, knowing how well your competitors are performing can give you and your team the motivation needed to improve and potentially soar past them.
Types of Competitive Benchmarking
There are ultimately three main types of competitive benchmarking, each with its own comparison analysis.
Depending on your particular business goals, you may choose to focus on only one category or you may choose to use multiple categories for the most comprehensive understanding of the industry.
1. Process Benchmarking
Process benchmarking focuses on the evaluation of the efficiency of your company’s current processes as they compare to your competitors.
This process takes both an internal and external approach to create a comprehensive analysis of the operational differences between you and the competition.