Benchmarking is an important process, both for evaluating your own business and comparing it to other businesses in your market. A brand benchmark will analyze all aspects of your business, top to bottom, to find which elements are working effectively, and which need to be improved for optimal performance. A competitor benchmark is the same idea in concept, but it gives you an idea of what a competitor is doing, what works, what doesn’t work, and ultimately what you can use to your own advantage either through adopting successful practices or avoiding ineffective ones.
Here are some of the points that really matter when conducting and analyzing a competitor benchmark:
Identify Best-in-Class Competitors
Selecting best-in-class competitors involves analyzing cost-effectiveness, customer satisfaction, web presence, and other matters depending on the area being benchmarked. There is not much use in a competitor benchmark if one is not comparing their business to the best in the industry. After all, identifying effective tactics used by competitors, and areas in which one’s business is superior, is the whole point of the exercise. Depending on what is being analyzed, a competitor benchmark does not even have to involve a company in the same industry. Sometimes it is best to benchmark against a large company that has proven particularly effective in a specific area like, say, logistics.
Competitor Benchmarking and the Internet
When it comes to benchmarking for online elements like web influence, website reach, advertising effectiveness, and social media, not all measurements are created equal. For example, while it is useful to take note of how many views a company’s homepage gets, that number does not tell the whole story. How many people click through to different pages to learn more about products and services? How long are people spending on one’s website, and on each individual page? If the website is set up to make sales, what is the customer conversion rate? The answers to all of those questions will reveal far more than a simple analysis of clicks.
The same goes for social media measurements, especially so in fact. Social media numbers can be deceptive. Even though a company has a large number of “likes” or “followers” on a social media site, they may not be acquiring those things in an efficient matter. In reality, it is possible for companies to buy both “likes” and “follows” from third parties. So even if a company posts large numbers in those categories, the numbers mean very little if none of their followers are actually interested in what the company has to offer. A strong social media presence is about connecting with users consistently, not having them click your page and forget about it.
What to Do With the Results
Once the competitor benchmark is complete, one will be armed with all manner of data with which to improve their own business. There are a variety of ways to use that information to one’s advantage. First, one can simply choose to put more effort into a given area that may have been neglected in the past. Another option is to adopt some of the best practices employed by a competitor, implementing them effectively into one’s own business plan. Finally, one can opt for innovation, and attempt to create a new, maximally effective industry standard based on all that they have learned. Once a method for improvement is chosen, it is important to set targets, goals and deadlines for implementing new strategies. With new strategies in place, one must continue to monitor their effectiveness, collect data and tweak the plan as needed.