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Keep your enemies close: the importance of competitor benchmarking
Business is competitive. Most brands are going against countless others that provide the same product and services, making the mission to win over customers a battlefield.
You need to do everything you can to attract new leads, retain your existing customers and keep your competitors at bay. The goal is that over time, your market share will grow, bringing increased sales and profit.
If you fail to beat, or at least keep up with your competitors, the side effects are lost customers, reduced demand and shrinking revenue. You’ll end up overshadowed in the market, making it harder to perform.
Due to what’s at stake, it’s essential to keep an eye on the competition. By benchmarking the moves of other brands – from their marketing activity to value proposition – you can monitor the evolving market and remain alert to what the crowd is doing and how they are responding. This can give you an edge as it will help to inform your activity and offer customers what your competitors currently don’t.
This guide explores the need for competitor benchmarking in business and how you can do it effectively for maximum results.
Why does competitor benchmarking matter?
The purpose of competitor benchmarking is to understand the tactics that your competitors are using to attract customers. Doing this has many benefits, which is why 94% of companies invest in competitor intelligence.
Firstly, it allows you to determine what is working well (or not) for other businesses seeking to win over the same people as you. You can then incorporate these findings into your strategy, fuelling activity that you know will bring better results to your target audience.
Secondly, it enables you to spot opportunities to one-up the competition. This could include adding value, doing things better or highlighting why a customer should come to you instead.
It’s worth noting that your competitors will likely be doing the same as you – tracking your performance to try and beat it. Undertaking benchmarking will allow you to witness this as it happens and counterbalance any attempts to steal your customers.
With better insight into the rest of the market, you can build an inspired plan that makes you an industry leader. It should shape almost every aspect of your business, including your marketing strategy, where you can uncover new trends that others might be picking up.
By staying on top of your competitors, you can improve customer retention while identifying opportunities to steal leads from other businesses. You will also avoid getting left behind in the industry and consistently improve your market share until you become the ‘go-to’ in your sector.
When should I benchmark my competitors?
The quick answer is always!
Competitor benchmarking covers almost every aspect of your business, including your sales and marketing strategies and overall proposition. This includes pricing, content creation, SEO, website performance, social media, email, advertising and very importantly, customer service that leaves a lasting positive impression.
As such, it’s wise to conduct competitor analysis ahead of any planning you do. It’s also important to revisit it regularly, as the way your competitors operate will constantly be evolving alongside new businesses entering the market that you need to be aware of.
By frequently reviewing the competition, you can inspire your activity, uncover the latest tactics and prevent yourself from getting lost in the crowd.
Who should I benchmark?
When benchmarking, you should include anyone who can subtract from your market share or attract customers away from your business.
Start by considering your close competitors. These are the brands that have a similar size or turnover level. If you’re a local business, you may include those based nearby. Mainly, they should be targeting the same customers as you.
You can choose to benchmark larger companies. While they may seem out of reach currently, it can allow you to understand how they got to their position. This gives a goal to work towards.
It’s also worth investigating industry disruptors, such as new start-ups. Although these may be smaller than you and not seem like immediate threats, they often bring innovative tactics which transform the industry. By monitoring them, you can stay on top of their progression and prevent them from overtaking.
Finally, research companies that are similar to yours but not direct competitors, for example, those operating in different locations or sectors. Although they shouldn’t pose a risk to your customer base, they can inspire your strategies without you having to worry so much about any threat level.
How to undertake competitor benchmarking
Now that you know the value of competitor benchmarking, you need to execute it effectively. We’ve listed the five steps to follow to get a detailed view of contenders in the market.
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Decide what you want to find out
The first step to take is clarifying what you want to find out. In many cases, you will be comparing a specific area (such as SEO results or social media engagement). You can then refine your research to the relevant data.
If you’re compiling a broader study encompassing many business facets, consider breaking your report into sections that focus on each area you are analysing from your competitors. This will make it easier to gather information and compare it.
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Utilise tools
It can be hard to access all the data you need to understand your competitors’ performance fully. Fortunately, there are resources designed to provide insight and make your research easier.
Examples include:
- SEMrush – to track and compare your search rankings and backlinks to others in the market
- Brandwatch – access a range of metrics about your competitors and the broader market
- Feedly – a curation of content your competitors are publishing
- Sprout Social – compare social media performance with your competitors across platforms
These are just some of the tools available. Look around to see if you can find other valuable support that uncovers the information you want.
It is worth noting that you will be restricted by the public data available. Many companies may choose to keep certain things private, and no tool can breach that.
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Gather data
Next, it’s time to gather the data. This could be obtained using the tools listed above or by spending time visiting your competitors’ websites, social media channels and other touchpoints to see their activity for yourself.
Remember to be objective, look at things from a customer’s perspective, as this will help you pinpoint the most impactful tactics that pose the biggest threat or opportunity to your business.
Include screenshots and other visuals that evidence what you have found, so that you can refer back to it when required, and present it to stakeholders.
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Analyse your findings
Once you have your data, formally compile it. By bringing it together, you can analyse what you have learnt and the potential repercussions.
Start by asking what you like and dislike about what you have seen and how it differentiates from your brand. It’s also worth asking what the implications could be for customers – do they gain anything from your competitors that they don’t get from you?
Finally, focus on areas where you can add value and offer something additional to the market, which will earmark an opportunity.
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Review your strategy
The final stage of your benchmarking should be updating your strategy based on what you have discovered. The aim should be to improve on your competitors or, if you can’t, carve out a unique space for your brand that still compels customers.
You should seek to neutralise any threats to your position, and inspire your own ideas based on any great activity you’ve seen and focus on how to provide the best possible experience to customers.
This will not only leave you more aligned to your competitors, but with a more informed strategy that allows your business to further stand out and fuel its mission towards market leadership.
Conclusion
Competition will always be part of business. However, the key to success is understanding what your competitors are doing well and ensuring you can offer something nobody else can. This will continually give customers a reason to come to you rather than someone else.
If executed effectively, you can avoid certain risks, better control your market share and maintain a loyal customer base. It will also pave the way to becoming an industry leader, with your sales and profit rising as you attract more leads to your brand.
When creating a marketing or business plan, it’s essential to include competitor benchmarking and customer audience understanding at its heart.
