There is a lot of information you can learn from conducting a competitor analysis. Although one of the most common reasons for conducting research on competitors is for accurate benchmarking.
Competitive benchmarking showcases how your organization compares to competing brands on all facets of business such as costs, marketing strategies, employee retention, and customer satisfaction.
Additionally, by doing this more regularly (at least once a year) organizations can see how these metrics change over time to understand if their data-driven decision-making is steearing them in the right direction.
Keep on reading to learn more about competitive benchmarking: what is it, importance metrics to measure, how to use the results, and more.
What is Competitive Benchmarking?
Competitive benchmarking is simply measuring something about your organization against known competitors that you've identified in the past or new competitors that you're unaware of.
Many organizations have a lot of assumptions about who their competitors are, what makes them great against their competitors, and where they're losing against competitors.
However, assumptions cannot compare to data, facts, and evidence. And that’s why benchmark data is critical!
Think of it as a way to keep a (quiet) eye on how competitors in the industry are doing over a period of time. By measuring this data, you’ll be able to match (and hopefully) exceed their efforts.
As for what competitor metrics to measure, that’s up to the unique goals of a business but a third-party competitive assessment company, like Drive Research can provide recommendations on what is best.
💡 The Key Takeaway: Benchmarking competitors allows for the careful measurement and comparison of different rival business strategies against your own.
Competitive Benchmarking Metrics to Measure
The KPIs your business should be measuring with market research, and how they are relevant to your competition, really depends on your long-term goals and where you want your brand to go.
The most common competitive benchmarking metrics brands measure include:
- Likelihood to recommend
- Customer satisfaction
Brands can also look into perception research around customer satisfaction rates of a rival, along with the Net Promoter Score (NPS), and weave that into their competitive benchmarking framework.
Calculating your net promoter score, or the NPS of a competitor, gives you an idea of how likely people are to recommend your business. This is a great benchmark to measure over time, as it can deliver concrete and actionable results.
If these metrics change over time, it’s likely due to the way customers are interacting with a brand.
This can help brands understand how customer opinion of them can shift over time. From there, brands can adjust their customer strategy and continue to use these findings as comparative benchmarks.
Additionally, not only are these factors important to track for your competition, they’re also some of the best metrics to measure brand loyalty with market research.
💡 The Key Takeaway: Competitive benchmarking can be measured in a multitude of ways. For instance, watching to see how your rivals position themselves publicly and tracking this over time can end up being a highly important benchmark.
Using the Results for Better Marketing
A common component businesses like to compare to their competition is marketing strategies: social media, website, paid marketing strategies, and so on.
Right off the bat, rival benchmarking may dig up new information on the following:
- Audience demographics
- What channels perform best
- How much budget should be allotted to marketing
These findings are a great way to understand key areas that may influence a marketing campaign.
For instance, when running a competitive analysis in marketing brands can reveal some of the assets and messaging a competitor has that is performing extremely well.
With this information, you can replicate what they're doing well as well as outperform them in areas where they're lacking.
Social Media & Competitive Benchmarking
More specifically, keeping tabs on the competition can certainly promote a brand’s social media marketing efforts. Businesses can take a look at their social media accounts and see how traffic is rating against rival metrics.
See it as a recon on your competitors.
Taking into account what they’re doing and creating an audit will often yield the desired results. Any other primary information gathered throughout the overall benchmarking process can also be repurposed into social media campaigns.
💡 The Key Takeaway: Marketing initiatives can be vastly improved by looking into what rival businesses are doing. This can also bleed into social media marketing strategies.
Competitor Benchmarking Mistakes to Avoid
Yes, there are such things as red flags in benchmarking and competitive intelligence research. You have to be proactive in ensuring you’re receiving the highest-quality data from an outsourced firm.
As always, doing research on your competitors while also doing it on your own is essential. A solid outsourced team like Drive Research can help massively–but you need to have a base knowledge of your competitors to help assist with the process.
Understanding the parameters of a project, who the target is, and ensuring the data is reliable are the factors to consider most when hiring a third party team.
Paying close attention to the demographic makeup of the respondents on your own will also give you confidence in the process.
Other things to consinder whe competitive benchmarking...
- Past and present research needs to be taken into account and measured.
- Watching out for benchmark data that seems flawed or inaccurate is of the utmost importance.
- Paying close attention to the demographic makeup of the respondents on your own will also give you confidence in the process.
💡 The Key Takeaway: While you should always work with a third-party team for rival benchmarking, it’s still important your business conducts its own research on the target.
Working with a Competitive Benchmarking Company
Partnering with a third-party market research company can help streamline the competitive benchmarking process. The obvious benefit is it saves your internal teams hours and hours of working conducting secondary research to learn more about competeing brands, their marketing efforts, their costs, etc.
They are knowledgable of what metrics matter most, and how to quickly run a thurough analysis.
Additionally, having an unbiased point of view to manage the competitor research will provide new perspectives.
For instance, an executive team might have its own assumptions about competing brands. However, these assumptions may be very different from those held by customers.
A third party has that neutral voice.
Lastly, for some industries, information about a company's costs and processes are not easily accessible online.
In these situations, our team would make mystery shopping calls to learn more. Whereas, a competitor is likely not going to take your call and freely provide business development information.
💡 The Key Takeaway: Hiring an outsourced market research team can bring together all facets of a company. In turn, this allows for increased internal communication.
Take it from us, the competitive benchmarking process is essential for any brand that wants to outdo rivals in the industry.
Drive Research is a market research company based in New York. Our team of pros can put together a competitive analysis for your brand while tracking key benchmarks throughout the entire process.
If you’d like to learn more about our market research services, get in touch with us through any of the ways below.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
Zach is the Vice President of Strategy at Drive Research. He leverages his background to advise clients on topics including customer insight, competitive intelligence, branding, positioning, messaging, creative strategy, and organizational leadership.
Learn more about Zach, here.