You have great products and an excellent marketing and sales team. You know who your competitors are. You may even monitor them regularly.
But is that enough? Are you benchmarking them diligently to assess how you stack up to your competition?
To be successful, you must outperform your competitors at every business touchpoint. For that, you must understand where you stand among your contemporary brands and what you can do to make your customers choose you over others.
That’s where competitor benchmarking comes into the picture. It creates a line of sight across your departments and helps you devise short and long-term strategies to stay ahead of the curve.
Sounds tough? It doesn’t have to be. Here’s our guide to competitor benchmarking that will help you exceed your KPIs and maintain the edge in a volatile and cutthroat market.
Table of Contents
- What is competitor benchmarking?
- 3 Different types of benchmarking
- Why should your brand use competitive benchmarking?
- 5 Top competitor benchmarking metrics that you should be tracking
- Competitor benchmarking for various channel types
- How to perform a competitive benchmarking analysis
- Using Keyhole for social media competitor benchmarking
- Wrapping up
What is competitor benchmarking?
Competitor benchmarking involves measuring and comparing your brand’s performance against your competitors through a set of key performance indicators.
The goal here is to learn from your competition’s strengths and dig out their weaknesses. It evaluates their product positioning, marketing and sales strategies, and USPs, sees where you stand in your industry, and examines whether you are ahead or behind them.
But how is competitor benchmarking different from other forms of benchmarking?
Typically, the generic internal benchmarking methods compare one business process to another similar procedure inside your company. It doesn’t focus on external factors like how other businesses are performing on those same metrics.
For example, a company may benchmark the marketing and sales department’s performance to see whether their actions are aligned.
But competitor benchmarking compares your business processes, products, and ROI against competing brands. It is an external benchmarking process that evaluates your position in the market and helps you finetune your strategies to outperform your contemporary businesses. For example, a company compares its marketing campaign ROI to its competitors. It falls under the competitor benchmarking process.
3 Different types of benchmarking
For accurate competitor benchmarking, first, you must understand its different formats and their functions. Here are some notable ones:
1. Process benchmarking
Process benchmarking involves comparing your business processes’ efficiency to the best-performing ones in your industry. It identifies specific procedures you can enhance by taking cues from examples of excellence in your field. Here, the processes you are benchmarking should be the same or similar.
Onboarding time, customer acquisition costs, and employee attrition rate are some KPIs companies measure for process benchmarking.
2. Performance benchmarking
Performance benchmarking is the comparative process that helps a company measure and understand its business performance against competitors and industry standards. It determines your brand’s current efficacy to reach desired results.
Important performance benchmarking metrics include brand awareness, campaign engagement, conversion rate, customer satisfaction rate, etc.
3. Strategic benchmarking
Strategic benchmarking is the process of weighing up your strategies with those of the successful companies in your industry. This helps you determine where you are lacking and identify new opportunities in your field.
Strategic benchmarking helps companies make constant improvements and elevate and sustain their position among the top players in the industry. Some relevant strategic benchmarking metrics include SEO, web traffic, market share and growth, forecast accuracy, etc.
Why should your brand use competitive benchmarking?
From reducing costs to improving product positioning, competitive benchmarking can be a very rewarding process. Here’s why you must prioritize it:
1. Gaining a competitive edge
Competitor benchmarking can point out your strengths and weaknesses against the industry standards in tangible terms. You get detailed insights on where your brand excels and where it falls short against top competitors. This lets you figure out what makes you different, highlight your USPs, and maintain a competitive edge.
Accurate peer benchmarking also enables you to compare the audience’s perception of your brand against the top names in the industry. This drives actionable steps and lets you mend and improve your brand image.
2. Identifying areas of improvement
Competitive benchmarking helps you figure out what works in your industry and what doesn’t. It identifies areas of improvement and shows you what you need to do to match up to or outperform your competition.
Comparing your KPIs such as conversion rate, revenue, and profit margin with your competitors can show you performance gaps. You can identify practices that deliver results for your peers and replicate them to enhance operational efficiencies. Competitor benchmarking can also detect opportunities to improve your marketing strategies and drive more sales.
3. Understanding market trends and shifts
The markets across industries are prone to rapid changes. Gauging them beforehand only through your company’s data isn’t effective enough.
However, as competitor benchmarking involves assessing strategies, product positioning, and customer targeting, you can identify changes in consumer preferences and market dynamics. You can detect new trends and customer behavioral patterns and take fitting actions to accommodate them.
Studying your competitor’s interactions with customers also lets you see what the customer currently expects from your brand. This lets you adjust your marketing and sales strategies, personalize customer service, and maintain your relevancy as a brand.
4. Enhancing product and service offerings
You can gauge how your product stands up in the market by benchmarking its quality and offerings to your competitors. This will let you tweak your existing products and market them to suit the current trends.
Competitor benchmarking can also unveil new expansion opportunities. It can encourage innovation and even new product launches. You can compare your contemporary brands’ pricing models and strategies and offer competitive pricing to attract more customers.
As we have already discussed, competitor benchmarking also provides an in-depth understanding of consumer expectations. This can lead to product and service enhancements to suit the current market dynamics.
5 Top competitor benchmarking metrics that you should be tracking
The accuracy and application of competitor benchmarking are all about how well you can identify and utilize the relevant KPIs. So, before diving into the process, let’s get familiar with the common competitor benchmarking metrics:
1. Quality of products or services
No matter how vibrant or appealing your marketing and sales tactics are, the primary key to building a successful business is ensuring a great product. That’s why you must benchmark your products and services against your competitors. That way you can assess whether your offerings are good enough to withstand a crowded market.
While this one is more of a qualitative metric, there are some elements you can monitor to measure product quality:
- Features, functionalities, and performance
- Reliability and durability
- Innovation rate
2. Time taken for product delivery or service execution
If your competitors deliver the same products faster than you do, they will have an upper hand on the market. That’s why it’s crucial to track how your logistics stack up to your peer brands. So, compare your supply chain performance, including supplier lead times, with those of your competitors.
Benchmark industry standards for lead time and see if you are behind. Your goal should be to exceed or at least meet them. While speed is important, you must also facilitate quality service. So assess your service responsiveness like efficiency in updating the customers on delivery or assisting them with the tracking.
3. Cost-effectiveness and pricing strategies
Your pricing model is another deciding factor behind outperforming your competitors. However, you can only offer competitive pricing when your business operations are cost-effective.
Cost-effectiveness measures whether an outcome of a business operation justifies its costs. Here, you need to compare the cost of production and delivery with the value and quality of the product. Then compare your findings with your top competitors.
4. Customer satisfaction and feedback
In the end, businesses are only successful when the customer is happy. That’s why customer satisfaction metrics are crucial for competitor benchmarking.
Measure your Net Promoter Score by asking your customers to rate how likely they are to recommend you to family and friends and calculate your promoters and detractors. Look into your competitor’s NPS data and benchmark the two to see where you stand regarding customer satisfaction.
Monitor third-party review platforms and assess the customer feedback your competitors are getting. Compare the number of positive reviews and average ratings with your competitors. Run sentiment analysis, dig into the reviews and see where you can improve.
Want to examine how successful your competitors are? The market share and growth rate are two useful metrics for your competitor benchmarking framework. Here, you need to find the answer to two key questions:
- Are you gaining or losing market share compared to your competitors?
- How do your growth rates compare?
High market share usually indicates a strong competitive position. However, if your market share is significantly lower than the competitors, you have a lot of room for improvement.
Competitor benchmarking for various channel types
If you want a holistic view of where you stand against your competitors, benchmarking your performance on various marketing and media channels is also important. Here are some channels you must pay attention to:
Earned media is an excellent and organic way of enhancing your brand visibility and building solid credibility. Frequent mentions in press releases, news articles, and other third-party content can help you reach a wider audience as well.
So, you must make sure that your efforts to get earned media are working equally well or better than your competitors. If you find yourself falling back here, assess what gets your competition the spotlight.
McDonald’s gets earned media coverage quite often through well-known news portals and publishers. The brand makes it a point to stay relevant to the pop culture. This further amplifies their exposure via third-party content as well.
Topper Guild’s viral video about McDonald’s secret menu is a notable example of the brand’s earned media.
An active social media presence is one of your brand’s most precious assets. To ensure it can outshine your competitors, create specific benchmarks for social media platforms as well. Some important social media metrics you must track and compare here include:
- Engagement rate (likes, comments, shares)
Taco Bell ran a genius social media campaign using their limited-time item, the Beefy Crunch Burrito. The fast food joint created a separate Twitter page for this campaign and asked their fans to express their passion for Beefy Crunch Burrito. This generated a massive stream of UGCs, with fans going to the extent of getting burrito tattoos, and even skydiving.
The social media campaign proved to be an excellent customer engagement tool by building urgency and excitement. Taco Bell’s following also increased by almost double.
Analyze your competitors’ content assets and check their impressions. See what makes their branded content like website copies and blogs stand out. Here are a few things to focus on while evaluating your competitor’s owned media exposure:
- Image count
- Video count
- Title and description length
- Keyword usage
For example, software company ASG uses extensive owned marketing through their blog page to promote their new initiatives, partnerships, and acquisitions.
Monitoring your competitor’s marketing efforts and campaigns is also an important benchmarking activity. Evaluate the types of ads they run, what kind of tools they use, and the budget they allocate for marketing efforts. Then look into the campaign results and compare them to yours.
For instance, SaaS brand Hipchat’s co-founder wanted to run billboard champions but knew he couldn’t beat or match his competitor’s marketing budget. So, he bought unused billboard spaces at a much lower price instead of just renting one. This helped him fit his paid campaign idea into their fledgling budget. As a result, the venture saw a 300% rise in online searches.
How to perform a competitive benchmarking analysis
Till now, we have attempted to understand the nitty-gritty of the process. Now, it’s time to dive into how to do competitor benchmarking:
Step 1: Identify key competitors
Find your key competitors. Don’t be limited to just the reputed names of your industry. For a more thorough benchmarking, see if any smaller business in your industry is showing promise and consider them a competition too.
Make sure you take both your direct and indirect competition into account. You should also check customer reviews and feedback to see if anyone mentions other businesses they consider as alternatives to your brand.
Step 2: Determine key metrics for comparison
Establish your goals and determine KPIs accordingly. These can vary according to your industry as well. However, some usual ones that you must monitor include revenue, market share, customer satisfaction, cost per unit, lead time, etc.
Step 3: Gather data on competitors
Collect competitor data from reliable sources. Make sure they are current and relevant. You can examine financial reports, customer feedback, and survey results to collect data. Many top brands even release their business strategies and marketing methods for public records.
You can also use tools like Keyhole to identify trends and assess the audience’s interest in your competitors.
For example, if you are a chocolate brand, you can check out the audience’s interest over time, mentions, potential impressions, sentiment, etc in a graph format using Keyhole’s QuickTrends feature.
Step 4: Analyze and compare the data
Now analyze your brand’s performance and compare the data to your competitors’ data. To avoid the manual hassle, you can also opt for an AI-automated competitor analysis tool.
You can use Keyhole’s competitor benchmarking to compare the data side by side.
For example, here we have created a comparison between the chocolate brands Fererro and Hershey’s Instagram presence. You can see the summary of different profile metrics for both brands. Keyhole’s competitor benchmarking feature also digs out the top posts of your competitors and lets you see where they are doing better or worse.
Step 5: Report findings and implement changes
Document the findings in specific silos and share the reports with stakeholders and leadership. Take proactive actions based on the generated insights.
Ensure that competitor benchmarking becomes a regular addition to your business calendar and repeat the process.
Competitor benchmarking is an intricate process. It involves complex metrics and multiple moving parts. Manually processing each is not only tedious but also a time-consuming task. The results are highly likely to be inaccurate as well.
Keyhole’s Competitor Analysis and Benchmarking solution fills this gap by keeping an automated tab on real-time metrics and your performance. You can generate benchmarking reports within minutes, enabling you to make prompt and data-driven business decisions.
Features and benefits
- Profile analytics calculate all your relevant metrics instantly
- You can select any metric and get actionable insights on it next to the top players in the industry.
- Helps you hop on relevant conversations using social listening.
Keyhole lets you create competitor benchmarks for free. Here are the steps to follow:
- Log into your Keyhole account and go to the Profile Analytics silo.
- Select the platform you want to monitor and add the username of the competitor you want to benchmark.
- Click on the orange “Analyze profile” button
- A new page will open. Here, add your brand’s name and then, add the competitor page you want to track.
- Once the “create comparison” button turns orange click on it. Keyhole automatically backfills the data within minutes.
If done right, competitor benchmarking can help you stand out through strategic improvements and innovations. To reiterate the highlights of competitor benchmarking, here is a TL;DR version:
- Identify and benchmark both direct and indirect competitors
- Focus on relevant metrics and monitor them regularly
- Ensure your collected data has come from reliable sources
- Analyze the findings regularly
- Opt for a competitor analysis tool to automate the process
By knowing your competitor’s market positions, strengths, and weaknesses, you can create and maintain a competitive edge. Want to make the benchmarking process more streamlined and outcome-driven? Start your free trial with Keyhole today!