What Is Competitive Benchmarking and Why Is It Important?

Competitive Benchmarking tells you where you stand compared to your competitors and the overall market or industry. While benchmarking competitors used to rely primarily on manufacturing operations, the digital world now allows you to monitor and analyze data in a new way to help you stand apart from your competition.

Using a collection of metrics, marketing teams can see how your competitors perform compared to your performance in various areas. These metrics include social media followers, impressions per post, engagement rates, website traffic and more.

Competitive benchmarking is important for many reasons, but the most apparent is the ability to find gaps and blind spots in your strategies versus your competitors — and find where you excel compared to others. With a better understanding of how you line up next to your competition, you can dig deeper to find what works for them and determine if it would work for your brand, too. On the other side, when your benchmarks show that you are performing higher than your competitors, you receive the validation that your efforts are working. You can then lean into these areas to maintain this advantage.

In social media, staying relevant requires an in-depth understanding of what your competitors are doing. Without an efficient strategy for analyzing competitor strategies, getting bogged down and stuck in a cycle of playing the catch-up game is easy. With benchmarking, you’ll never have to worry about missing an important shift in the competitive landscape again.

Benchmarking vs. Competitive Analysis

So, what’s the difference between competitive benchmarking and competitive analysis? Though often confused, competitive analysis and benchmarking are two different business practices. When performing a competitive analysis, you often look into every part of a competitor's business, including product, strengths, weaknesses, strategies and more. On the other hand, competitive benchmarking relies on set metrics that depict a comparison over a specific period so you can better understand the industry landscape. For example, you might have noticed dips in something like follower growth — if competitors are also experiencing lower follower growth rates, you might not want to shift all of your efforts to follower retention. 

Competitive benchmarking can be part of competitive analysis, but they are certainly not the same thing—although both are essential to an agile social media marketing strategy.

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How Dash Hudson Can Help Solve Competitive Benchmarking Challenges

With a tool like Dash Hudson, you get access to all the insights you need to stay on top of trends and win on Instagram, Twitter, and YouTube. Easily track how your key competitors are doing, gain inspiration from their top-performing social media content, and, ultimately, level up your strategy. Take an Interactive Product Tour to learn how your brand can outperform the competition.

How Competitive Benchmarking Will Change Your Business

Maybe you have been benchmarking against competitors on other platforms all along but never realized the number of possibilities with this technique, or maybe you’re brand new to looking at how your performance stacks up against competitors. Either way, with a better understanding of why competitive benchmarking is so important and how to get started with tracking benchmarking metrics, you can gain valuable data and build better strategies. 

Using a tool like Dash Hudson's Competitive Insights and Benchmarking for your benchmarking needs allows you to benchmark quickly, easily and effectively so you can arm yourself with actionable insights to help you meet your company objectives. By considering what your goals are and what performance indicators are most influential to you, you can ensure you are better prepared for going to bat against others so that you remain a long-term leader in your market.

Competitive benchmarking metrics inform different parts of your business. By benchmarking competitor, you can gain insight to social performance, content and influencer marketing strategies, customer care methodology and paid strategy.

Social Performance

With plenty of options for metrics representing social performance, competitive benchmarking makes it easy to compare your social media performance to that of your competitors and find areas where you may need to improve. 

Content and Influencer Strategy

Understanding what strategies for content and influencer marketing work for your competitors can give you effective insights into things that you could implement in your strategies. Competitor benchmarks and Influencer Relationship Measurement can provide you with new ideas of content pillars to try out, forms of content that you may not be using to their full potential, opportunities for influencer partnerships, and ideas of how to improve pre-existing relationships with influencers.

Customer Care

When, where, and how are your competitors interacting with their customers? By learning about your competitors' customer care strategies, you can gain better insights on how to beWhen, where and how are your competitors interacting with their customers? By learning about your competitors' customer care strategies, you can gain better insights into how to best interact with and communicate with your brand's fans.st interact and communicate with fans of your brand.

Paid Strategy

Gain a better understanding of how your competitors are tackling promotions in their paid social strategy. Are they using paid promotions often? When are they boosting social media posts? What platforms are they using for paid efforts? How are these paid posts performing? Get answers to all these questions with benchmarking, then use those insights to develop better strategies for your brand. 

When benchmarking against competitors, it’s important to choose your metrics and competitors to analyze wisely.

There are 3 primary steps to getting started with competitive benchmarking:

1. Choose Metrics to Track

First, you’ll need to choose which metrics to track. A helpful starting point is to look at general social media benchmarks across industries — for example, the average engagement rate on TikTok is 4%, Instagram is 0.3% and Facebook is 4%. While metrics for particular industries will likely differ, this helps you set realistic goals and plan appropriately. 

When deciding which metrics to track to compare your performance to competitors, you’ll want to choose key performance indicators or social media KPIs. These should provide actionable insights about performance and success. Some common KPIs to measure for social media performance include:

• Engagement Rate.
• Effectiveness Rate.
• Sentiment Analysis.
• Entertainment Score. 
• Followers.
• Follower Growth Rate.
• Shares.
• Saves.
• Reach.
• Video Views.

For example, suppose you chose a KPI to measure Instagram engagement and see that your competitor outperforms you. In that case, you can take action by digging into the type of content they share and finding areas you can improve upon. Additionally, consulting various teams within your company can be useful to see which indicators can provide insights for other teams.

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2. Select Competitors to Compare

Second, choose which competitors you want to target for comparison. When choosing competitors, the first thing to determine is what you want to get out of this tactic. If you want to see how you stack up against your closest competitors, you’ll want to choose direct competitors around the same size and performance levels as you. If you’re a small restaurant with a growing social presence, it’s unreasonable to compare your performance against a well-known brand like Taco Bell. 

If you’d prefer to compare yourself to your leading competitors, you can choose these companies, but the benchmarks will likely look fairly uneven initially. The last thing to remember when selecting competitors is to pick competitors for whom you can find data.

3. Collect Competitor Data

Third, decide how and where you will track your competitive benchmarks. Depending on what KPIs you decide to measure, you can pull data and track it yourself manually, but typically, you will find better success with a social media management tool dedicated to tracking competitor benchmarking. The best part of using a benchmarking tool is that you can access various KPI data without the need to complete lengthy and in-depth research of your competitors — and without the need to manually update data regularly. 

Competitive benchmarking is vital to staying competitive and relevant against competitors. However, the benchmarking process can often be time-consuming and troublesome. The key to properly taking advantage of the benefits of benchmarking is to understand commonly faced challenges.

Lack of Actionable Insights

Frankly, insights that allow you to take action make competitive benchmarking worthwhile. Without actionable insights and up to date data it is incredibly difficult to compare yourself to competitors or to use that data to inform strategies moving forward.

Slow Adaptation

Similarly to how brands track industry trends to ensure they maintain relevance in their industry, using competitive benchmarks effectively requires you to be agile and shift strategies promptly. If you adapt too slowly to the insights from your benchmarking, you may miss the opportunity to stay competitive and grow your business.

Manual Data Collection

With risks of human error, time-consuming data collection, and long lead times from data to insights, manually collecting data for competitive benchmarking can be incredibly challenging. Collecting benchmarking data manually takes time away from building insights and implementing strategies based on said data, effectively removing the competitive edge you would gain from this process.

Brands can leverage Dash Hudson’s Competitive Insights and Benchmarking tools to stay ahead. By tracking and analyzing key performance metrics, brands can see how their content stacks up against competitors, identifying strengths and areas for improvement. The platform allows users to monitor competitors’ engagement rates, follower growth and content performance to provide a clear picture of industry trends and audience preferences. With customizable reports, brands can focus on the data that matters most, ensuring their strategy aligns with realtime market movements. These analytics empower brands to refine content, improve engagement and make data-driven decisions. 

With Dash Hudson, you can access all the insights you need to stay on top of trends and win on Instagram. Easily track how your key competitors are doing, gain inspiration from their best social media content and, ultimately, level up your strategy.

What is an example of competitive benchmarking?

An example of competitive benchmarking would be comparing your social media reach to your competitors. This would allow you to see how well your social strategies for reaching your target audience are working and if you are gaining more, less, or the same amount as your competitors. This information can then inform your strategies to stay competitive in the market.

What are competitive benchmarking metrics? 

Competitive benchmarking metrics are a predetermined set of metrics or KPIs used to compare you to your competitors. Often, these metrics include social media reach, customer engagement, market share, share of voice, and many others. The metrics you choose to use are completely dependent on your goals for the competitive benchmarking process. 

Why is competitive benchmarking important in product development?

Benchmarking against competitors provides an external point of view on how you can improve your product or service. Limiting your product development processes to focus only on internal factors restricts improvement opportunities. By looking at competitors' products, you can understand the differences between your product and theirs, see what is working for them and what isn’t in terms of product design, and use that information to make well-backed decisions for the next steps in developing your product.