Competitive Benchmarking is what keeps you in the know of where you stand in comparison to your competitors as well as to the overall market or industry. While benchmarking competitors used to rely primarily on manufacturing operations, the digital world now allows you to monitor data in a new way to help you stand apart from the competition. Using a set collection of metrics, you can see how your competitors are performing versus how you are performing in various different areas. These metrics can include things like social media followers, impressions per post, engagement rates, website traffic, and many more.
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, etc. On the other hand, competitive benchmarking relies on set metrics that depict a comparison over time, so that you can understand when your success is better than that of your competition, or when overall performance in the industry is dipping.
Well, for many reasons, but the most apparent is because it gives you the ability to find gaps and blind spots in your strategies versus your competitors and find where you are excelling in comparison to others. With a better understanding of how you line up next to your competition, you can look deeper into what is working for them, with the understanding that it is likely to work for you as well. On the other side, where your benchmarks show that you are performing higher than your competitors you receive the validation that your efforts are working and can then lean into these areas to ensure that you maintain this advantage.
In a social media heavy landscape, staying relevant requires an in-depth understanding of what your competitors are doing. Without an efficient strategy for analyzing competitor strategies, it’s easy to get bogged down and stuck in a cycle of playing the catch-up game. With competitive benchmarking, you’ll never have to worry about missing an important shift in the competitive landscape again.
Competitive benchmarking metrics can help to inform various different parts of your business. Some examples of areas you can gain insight on by benchmarking competitors are social performance, content & influencer strategies, customer care methodology, and paid strategy.
With plenty of options for metrics that represent social performance, competitive benchmarking makes it easy for you to compare your performance on social media to that of your competitors and find areas where you may need to step it up.
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 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, and ideas of how to improve pre-existing relationships with influencers.
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 best interact and communicate with fans of your brand.
Gain a better understanding of how your competitors are tackling their paid promotions. Are they using paid promotion often? What platforms are they using for paid efforts? How are these paid posts performing? Get answers to all these questions with competitive benchmarking, and then use those insights to develop better strategies for your own 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.
First, you’ll need to choose which metrics to track. When deciding on which metrics you want to track to compare your performance to competitors, you’ll want to choose key performance indicators, or KPI’s. These should be metrics that provide actionable insights about performance and success.
For example, if you chose a KPI to measure Instagram Engagement and saw that your competitor was outperforming you, you could take action by digging into the type of content they’re posting and finding areas that you could improve upon. Additionally, consulting various teams within your company can prove to be useful to see which indicators can provide insights for other teams as well.
Second, choose which competitors you want to use for comparison. The first thing to ask yourself when choosing competitors is what are you trying to get out of this? If you want to see how you stack up against your closest competitors, you’ll want to choose direct competitors who are around the same size and performance levels as you.
If you’d rather compare yourself to your leading competitors, you can choose these companies as well, but it is likely that the benchmarks will look fairly uneven in the beginning. The last thing to remember when choosing competitors to benchmark against is that you will want to choose competitors that you are sure you have access to data for.
Third, decide how and where you are going to track your competitive benchmarks. Depending on what KPI’s you decide on, you may be able to manually pull data and track it yourself, but most times you will find better success with a tool dedicated to tracking competitor benchmarking. The best part of using a benchmarking tool is that you’ll have access to various different KPI data, without the need to complete lengthy and in-depth research of your competitors and without the need to manually return to the data to update it on a regular basis.
As mentioned, competitive benchmarking is key to staying competitive and relevant against competitors. Oftentimes, the benchmarking process can be a time-consuming and troublesome process. The key to properly taking advantage of the benefits of competitive benchmarking is to first understand the challenges that are commonly faced.
Frankly, insights that allow you to take action are what 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.
Similar to how brands track industry trends to ensure they’re maintaining relevance in their industry, using competitive benchmarks effectively requires you to be agile and shift strategies in a timely manner. If you adapt too slowly to the insights from your competitive benchmarking, you may miss the opportunity to stay competitive and grow your business.
With risks of human error, time-consuming data collection, and long lead times from data to insights, collecting data for competitive benchmarking manually can be incredibly challenging. Collecting competitive benchmarking data manually takes time away from building insights and implementing strategies based on said data, which effectively takes away the competitive edge you would gain from this process.
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. 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.
Maybe you have been benchmarking against competitors 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 for your competitive benchmarking needs will allow 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.
An example of competitive benchmarking would be comparing your social media reach to that of your competitors. This would allow you to see how well your social strategies for reaching your target audience are working, and if you are reaching more, less, or the same amount as your competitors. This information can then inform your strategies for moving forward so that you can continue to stay competitive in the market.
Competitive benchmarking metrics are a predetermined set of metrics, or KPI’s, that are used to compare you to your competitors. Oftentimes, these metrics include things like social media reach, customer engagement, market share, share of voice, and many other metrics. The metrics you choose to use are completely dependent on your goals for the competitive benchmarking process.
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 your opportunities to improve. By looking at competitors' products, you can understand the differences between your own 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 the development of your product.