How Do Price Changes Affect Consumer Perceptions?
By Kara FinnertyJun 1
Published September 14th 2017
Competitive benchmarking is the process of comparing your company against a number of competitors using a set collection of metrics. This is used to measure the performance of a company and compare it to others over time.
This will often include looking at the practice behind these metrics as well. This means companies can look to define ‘best practice’ for specific metrics and compare this to their own approach. It also is an important step of a competitive analysis.
The benefits are clear.
Not only can you get get an organized overview of your company and how it performs on different levels, you can also keep competitive. Benchmarking means you can easily spot when a competitor is doing well or beginning to struggle – both prime times to evaluate your own strategy.
Competitive benchmarking can fit around your business and its departments, being as broad or as granular as you like. There’s no set approach. It all comes down to do your aims and what areas are important to you.
With so much scope on what can be included, how do you even choose your competitive benchmarks?
Your pre-existing KPIs are a good start of course, but this can be a chance to go a bit broader. Ask yourselves why you want to benchmark in the first place. Have a think about what metrics could be early indicators for bigger outcomes too.
For example, if your share of voice on social media drops and a competitor takes the top spot this means it’s time to investigate. Either something is going wrong on your end or they’re trying something new. You need to find out either way.
This shows how only tracking your performance against your past self can miss an important part of the picture.
You should also consult with all parts of the business to see what would be useful to include. This will ensure the benchmarking has value for as many people within the company as possible. Don’t get hung up on sticking to top line metrics alone.
There are plenty of different approaches here. Competitors and your relation to them can vary wildly, so who you can include depends on what you want to get out of it.
One option is to benchmark against your closest competitors. Likely the ones that are most similar to yourself in terms of size and success. This gives you a good view of the companies you’re directly competing against and the ones most likely to be coming after you.
This is a great choice for mid-to-near future planning and taking advantage of immediate opportunities. You could spot your main rival’s SEO performance trending downwards over the last few months. That might mean planning your own SEO work to pick up the traffic they’ve lost, and ensure the same doesn’t happen to you.
Of course, you might have bigger ambitions than fighting off your close competitors. You might be looking at the biggest and the best in your industry with plans to become one of them.
In that case, benchmarking against them can offer some insight into how you can achieve their success. The figures might look depressing at first, but with research and investigation you may see common approaches between the larger companies, or areas you’re particularly weak in compared to them.
Obviously it’s not as simple as just doing what the best do, but it can give you some very valuable insight into how they operate and work. It also gives you a look into how they build foundations for future work and projects.
Another approach is to look down the table. There’s always smaller companies snapping at others’ heels. In a time when disruption upends entire industries, it’s a mistake to not pay attention to the little guys.
Benchmarking against the smaller players in the game can pay off. It means you can see who is performing well and how they’re doing it. That way you can be ready as they get more successful and catch you up. This should help stop you getting caught off-guard.
Ultimately, the aim of the benchmarking will decide who to include. Bear in mind chucking everyone, big and small, in together will mean your reporting loses focus. Don’t let the data get muddy and hide important insights from plain site. Segment your competitors into separate reports to suit your intended outcomes.
There’s an obvious problem here. You’ve got access to all of your information, but what about other companies’? Some data is easier to access than others.
SEO metrics are pretty easy to get. There’s a huge range of tools out there that can tell you about a website’s performance (we use Moz for example). This kind of data is all public, so there isn’t a problem accessing it. The only downside is the best tools are paid.
Keeping with public data, information on share of voice across online channels and social media metrics can be measured as well. That’s where Brandwatch steps in. You can use our platform to track a vast range of metrics that covers yourself, your competitors, and any topics you’re interested in.
Private data is much harder to get a hold of. Companies can be very cagey about the data they release. Obviously you can’t just call up a competitor and ask for all the data you want.
That doesn’t mean you can’t get some of it. Do your research. Look out for sales reports, news articles, and press releases to see what info businesses are releasing (you could use Brandwatch for that too). If you can find some regular releases, you may have something for your benchmarking. There’s also companies like Nielsen who conduct research for benchmarking and research purposes. Meanwhile, Companies House is a good place to look for larger companies.
Another option is to conduct your own research. Carrying out benchmarking surveys mean you can ask the exact questions you want from the exact people you want. This could be done openly or privately depending on which is best and will give you valuable insight. It can be a costly process, but if done right the returns will outweigh the costs.
Ultimately, competitive benchmarking can will take some time to set up and track, but the insights you’ll gain will be invaluable.