Table of contents<\/h2>- What is competitive benchmarking?<\/a><\/li>
- Competitive benchmarking versus competitive analysis<\/a><\/li>
- Best practices for competitive benchmarking<\/a><\/li>
- Competitive benchmarking benefits<\/a><\/li>
- Best competitive benchmarking metrics<\/a><\/li>
- FAQs about competitive benchmarking<\/a><\/li><\/ul><\/div>\n\n\n\n
What is competitive benchmarking?<\/h2>\n\n\n\n
Benchmarking is critiquing your performance against a standard. In business, that standard can be your past performance, industry norms, or your competitors. Competitive benchmarking compares your performance \u2014 you\u2019ve guessed it \u2014 against your competitors. The data you collect about your competitors become the metrics with which you set goals for your company.<\/p>\n\n\n\n
You can use competitive benchmarking to improve internal processes, like supplier sourcing or employee recruitment by measuring it against other companies to see how you can do better. Or measuring external metrics, like social media<\/a> followers or customer review ratings<\/a>, can help you gauge how your results stack up alongside others.<\/p>\n\n\n\nCompetitive benchmarking works best when you earmark top companies for comparison. By setting your sights on first-rate examples, you\u2019ll stretch your own goals for achievement. Maybe you see a competitor running a first-rate marketing campaign that places them top of mind among customers. You can use competitive benchmarking to compare their market research strategy<\/a> to your own.<\/p>\n\n\n\nCompetitive benchmarking versus competitive analysis<\/h2>\n\n\n\n
You can use competitive analysis and competitive benchmarking together to create a killer business plan<\/a>. But first, you need to better understand how the two differ.<\/p>\n\n\n\nCompetitive analysis is the tool you use to make your business and offering stand out among the competition. With it, you identify your competitors and suss out their strengths and weaknesses. You can then develop a strategy that makes your products or services distinct and special. <\/p>\n\n\n\n
Competitive benchmarking, on the other hand, is all about emulating the best practices of your competitors. If you see your competitors winning at social media marketing or manufacturing efficiency, you can borrow their methods to improve your business.<\/p>\n\n\n\n
Best practices for competitive benchmarking<\/h2>\n\n\n\n![\"List](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Internal-Best-practices-1.png\")
<\/figure>\n\n\n\nThe following best practices will help you get the most from your benchmarking efforts<\/a>. Competitive benchmarking is an ongoing process. So, you can expand your goals, data collection, and action plans once you have the basics down.<\/p>\n\n\n\nDefine your objectives<\/h3>\n\n\n\n
As a business owner, you\u2019re no stranger to setting goals. So it\u2019ll come as no big surprise that the first step to competitive benchmarking is laying out clear objectives. Knowing exactly what you want to improve within your core business model will help you determine what data to collect about your competitors.<\/p>\n\n\n\n
Perhaps your churn rate is higher than the other guy\u2019s. Decreasing the churn rate becomes your objective. Now, you can go about collecting data about your competitor that may influence their low churn rate.<\/p>\n\n\n\n
Select the benchmarking parameters<\/h3>\n\n\n\n
With your goals in hand, you\u2019re ready to set your benchmarking parameters. These are the factors you want to measure to help you achieve your goals. Your parameters should be relevant to your business and your industry, and they should be easily comparable to your internal metrics.<\/p>\n\n\n\n
Take the churn example from above. Ask yourself what the other company is doing differently that might affect churn. Examine their customer service options, product quality, and incentive programs, along with any other factor that influences that specific metric.<\/p>\n\n\n\n
Gather data<\/h3>\n\n\n\n
Knowing what you want (and probably need) to measure is one thing. Actually, finding the data can be tricky. Your team may need to do a bit of digging to discover the information you need for competitive benchmarking. Benchmarking software, however, can give you a leg up by compiling a competitor\u2019s online information from review sites<\/a>, forums, blogs, and other channels.<\/p>\n\n\n\nYou probably think of reviews sites, forums, and social media first when it comes to keeping tabs on your competitors. But everything from financial reports to trade publications may have nuggets of worthy information. Even reviews from employees on Glassdoor can offer insight<\/a> into your competitor\u2019s internal workings.<\/p>\n\n\n\nEven with a wealth of online data, your team may need to get creative. Xerox actually purchased<\/a> a competitor\u2019s copier, disassembled it, and investigated sources for its components. Their aim was to precisely find out how the competition could sell their machines at such a low price. When it comes to gathering data for competitive benchmarking, it pays to think outside the box.<\/p>\n\n\n\nAnalyze the data<\/h3>\n\n\n\n
Once you\u2019ve plucked the internet for mentions of your competitor, you\u2019ll realize it can be difficult to make sense of all that data. You\u2019ll need to develop a way to analyze the information to understand trends and see patterns. With that analysis, you\u2019ll be able to see things like what\u2019s driving customers when they make their purchases or how your company\u2019s brand awareness stacks up against the rest.<\/p>\n\n\n\n
Benchmarking software can perform your data analysis for you. You can have a comprehensive view of where your company rates within your industry using your predetermined parameters. Additionally, you can drill down to see the specific reviews or mentions that are driving results. If you see that a competitor consistently has better reviews, you can click to find what, specifically, customers are raving about.<\/p>\n\n\n\n
Identify gaps and opportunities<\/h3>\n\n\n\n
Using competitive benchmarking is all about acknowledging you can do better and then using real data to see what, exactly, you\u2019ll need to do.<\/p>\n\n\n\n
For example, if you\u2019re a restaurant chain, perhaps you\u2019ve been focusing on sourcing local ingredients. With benchmarking software, you may discover that customers mention larger portions at lower prices as their main reason for loving your competitor. You can use that information to increase the perception of the value of your own dishes.<\/p>\n\n\n\n
Develop and implement action plans <\/h3>\n\n\n\n
The whole reason to implement a benchmarking system in the first place is to know what you need to do to be the best. Once you\u2019ve analyzed the data and identified your areas for improvement, it\u2019s time to make an action plan. Your goal isn\u2019t to copy your competitor\u2019s methods. Rather, your plan of action makes the most of your strengths to achieve results that outshine the competition.<\/p>\n\n\n\n
Let\u2019s go back to our previous example. Say you\u2019re a restaurant chain boasting fresh, local ingredients. But your benchmarking analysis reveals that customers prioritize value over ingredients. Instead of switching to the same over-processed but inexpensive food your competitor offers, try something different. Look for ways to reduce overhead costs, offer frequent customer discounts, or more attractive daily specials, without sacrificing what makes you special.<\/p>\n\n\n\n
Monitor progress<\/h3>\n\n\n\n
Your action plan should include key performance indicators (KPIs<\/a>) and a timeframe in which you expect to achieve it. Then, use your benchmarking software to continuously monitor your progress toward your goal. You may also find a need to make changes to the plan to achieve your goal. For example, you may need to boost your market research efforts or create incentives to persuade customers to try your business again.<\/p>\n\n\n\nRepeat the process<\/h3>\n\n\n\n
Competitive benchmarking really is one of the best ways to become a top-rated company. And that\u2019s why your competitors use it as well. That means you need to make competitive benchmark analysis<\/a> a continuous practice for your company. Because once you surpass the competition, you\u2019ll become the benchmark.<\/p>\n\n\n\nCompetitive benchmarking benefits<\/h2>\n\n\n\n![\"List](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Internal-Benefits-5.png\")
<\/figure>\n\n\n\nWhen practiced over time, competitive benchmarking is a boon for your business. Just as important, it provides a yardstick you can use to measure your progress. And you\u2019ll reap the following benefits from it.<\/p>\n\n\n\n
Identify areas for improvement<\/h3>\n\n\n\n
It\u2019s often difficult to see our own shortcomings. That\u2019s why looking at others can provide perspective. In business, competitive benchmarking creates a frame of reference so that we can see opportunities for improvement.<\/p>\n\n\n\n
Gain insights into industry trends<\/h3>\n\n\n\n
In a constantly-evolving business market, seeing the big picture can be tough. Market changes, customer preferences, and competitor strategies all affect your growth. Yet these changes can be difficult to spot. Benchmarking will help you identify the trends affecting your bottom line.<\/p>\n\n\n\n
Develop effective strategies<\/h3>\n\n\n\n
The roadmap for your success has to take into account your industry\u2019s landscape. Understanding what your competition does well will help you develop a plan for surpassing their results. Competitive benchmarking gives you insights that\u2019ll help you develop a winning strategy.<\/p>\n\n\n\n
Enhance decision-making<\/h3>\n\n\n\n
Companies that use data to make their decisions are more likely to hit their goals. The data you get from competitive benchmarking will help you figure out just where to focus your efforts. You\u2019re more likely to hit your targets because you\u2019re making decisions based on real-world information.<\/p>\n\n\n\n
Increase efficiency and productivity<\/h3>\n\n\n\n
It\u2019s easy to become complacent and do things the same old way. But chances are someone out there has figured out how to be more streamlined and effective in the same processes you use daily. Competitive benchmarking will help you spot weak and ineffective methods that are preventing you from growing.<\/p>\n\n\n\n
Improve customer satisfaction<\/h3>\n\n\n\n
Benchmarking customer satisfaction levels will help you zero in on specific areas to improve the experience. You\u2019ll also be able to identify what\u2019s most important to your customers. Benchmarking software can take you deeper into insights by picking out keywords associated with the most common complaints or compliments. For example, if you\u2019re a hotel chain, running a simple sentiment analysis<\/a> will highlight \u201cold\u201d as being a recurring complaint about your d\u00e9cor.<\/p>\n\n\n\nStay competitive<\/h3>\n\n\n\n
Entrepreneurs know there\u2019s almost always a better way to do things. Strategic benchmarking will give you ideas on how to improve your company. You\u2019ll identify trends you couldn\u2019t see before. Benchmark metrics will help you gain a competitive edge.<\/p>\n\n\n\n
Best competitive benchmarking metrics<\/h2>\n\n\n\n![\"List](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Internal-Best-metrics.png\")
<\/figure>\n\n\n\nKey performance indicators are at the heart of your benchmarking metrics. Collecting the data listed below will provide a panoramic view of where your company stands compared to your competitors.<\/p>\n\n\n\n
Market share<\/h3>\n\n\n\n
Use competitive analysis to shine a spotlight on how your sales stack up. That kind of market research is built into performance benchmarking. Understanding your market share will help you develop strategies for growing your customer base.<\/p>\n\n\n\n
Sales growth rate<\/h3>\n\n\n\n
What is competitive benchmarking?<\/h2>\n\n\n\n
Benchmarking is critiquing your performance against a standard. In business, that standard can be your past performance, industry norms, or your competitors. Competitive benchmarking compares your performance \u2014 you\u2019ve guessed it \u2014 against your competitors. The data you collect about your competitors become the metrics with which you set goals for your company.<\/p>\n\n\n\n
You can use competitive benchmarking to improve internal processes, like supplier sourcing or employee recruitment by measuring it against other companies to see how you can do better. Or measuring external metrics, like social media<\/a> followers or customer review ratings<\/a>, can help you gauge how your results stack up alongside others.<\/p>\n\n\n\n Competitive benchmarking works best when you earmark top companies for comparison. By setting your sights on first-rate examples, you\u2019ll stretch your own goals for achievement. Maybe you see a competitor running a first-rate marketing campaign that places them top of mind among customers. You can use competitive benchmarking to compare their market research strategy<\/a> to your own.<\/p>\n\n\n\n You can use competitive analysis and competitive benchmarking together to create a killer business plan<\/a>. But first, you need to better understand how the two differ.<\/p>\n\n\n\n Competitive analysis is the tool you use to make your business and offering stand out among the competition. With it, you identify your competitors and suss out their strengths and weaknesses. You can then develop a strategy that makes your products or services distinct and special. <\/p>\n\n\n\n Competitive benchmarking, on the other hand, is all about emulating the best practices of your competitors. If you see your competitors winning at social media marketing or manufacturing efficiency, you can borrow their methods to improve your business.<\/p>\n\n\n\n The following best practices will help you get the most from your benchmarking efforts<\/a>. Competitive benchmarking is an ongoing process. So, you can expand your goals, data collection, and action plans once you have the basics down.<\/p>\n\n\n\n As a business owner, you\u2019re no stranger to setting goals. So it\u2019ll come as no big surprise that the first step to competitive benchmarking is laying out clear objectives. Knowing exactly what you want to improve within your core business model will help you determine what data to collect about your competitors.<\/p>\n\n\n\n Perhaps your churn rate is higher than the other guy\u2019s. Decreasing the churn rate becomes your objective. Now, you can go about collecting data about your competitor that may influence their low churn rate.<\/p>\n\n\n\n With your goals in hand, you\u2019re ready to set your benchmarking parameters. These are the factors you want to measure to help you achieve your goals. Your parameters should be relevant to your business and your industry, and they should be easily comparable to your internal metrics.<\/p>\n\n\n\n Take the churn example from above. Ask yourself what the other company is doing differently that might affect churn. Examine their customer service options, product quality, and incentive programs, along with any other factor that influences that specific metric.<\/p>\n\n\n\n Knowing what you want (and probably need) to measure is one thing. Actually, finding the data can be tricky. Your team may need to do a bit of digging to discover the information you need for competitive benchmarking. Benchmarking software, however, can give you a leg up by compiling a competitor\u2019s online information from review sites<\/a>, forums, blogs, and other channels.<\/p>\n\n\n\n You probably think of reviews sites, forums, and social media first when it comes to keeping tabs on your competitors. But everything from financial reports to trade publications may have nuggets of worthy information. Even reviews from employees on Glassdoor can offer insight<\/a> into your competitor\u2019s internal workings.<\/p>\n\n\n\n Even with a wealth of online data, your team may need to get creative. Xerox actually purchased<\/a> a competitor\u2019s copier, disassembled it, and investigated sources for its components. Their aim was to precisely find out how the competition could sell their machines at such a low price. When it comes to gathering data for competitive benchmarking, it pays to think outside the box.<\/p>\n\n\n\n Once you\u2019ve plucked the internet for mentions of your competitor, you\u2019ll realize it can be difficult to make sense of all that data. You\u2019ll need to develop a way to analyze the information to understand trends and see patterns. With that analysis, you\u2019ll be able to see things like what\u2019s driving customers when they make their purchases or how your company\u2019s brand awareness stacks up against the rest.<\/p>\n\n\n\n Benchmarking software can perform your data analysis for you. You can have a comprehensive view of where your company rates within your industry using your predetermined parameters. Additionally, you can drill down to see the specific reviews or mentions that are driving results. If you see that a competitor consistently has better reviews, you can click to find what, specifically, customers are raving about.<\/p>\n\n\n\n Using competitive benchmarking is all about acknowledging you can do better and then using real data to see what, exactly, you\u2019ll need to do.<\/p>\n\n\n\n For example, if you\u2019re a restaurant chain, perhaps you\u2019ve been focusing on sourcing local ingredients. With benchmarking software, you may discover that customers mention larger portions at lower prices as their main reason for loving your competitor. You can use that information to increase the perception of the value of your own dishes.<\/p>\n\n\n\n The whole reason to implement a benchmarking system in the first place is to know what you need to do to be the best. Once you\u2019ve analyzed the data and identified your areas for improvement, it\u2019s time to make an action plan. Your goal isn\u2019t to copy your competitor\u2019s methods. Rather, your plan of action makes the most of your strengths to achieve results that outshine the competition.<\/p>\n\n\n\n Let\u2019s go back to our previous example. Say you\u2019re a restaurant chain boasting fresh, local ingredients. But your benchmarking analysis reveals that customers prioritize value over ingredients. Instead of switching to the same over-processed but inexpensive food your competitor offers, try something different. Look for ways to reduce overhead costs, offer frequent customer discounts, or more attractive daily specials, without sacrificing what makes you special.<\/p>\n\n\n\n Your action plan should include key performance indicators (KPIs<\/a>) and a timeframe in which you expect to achieve it. Then, use your benchmarking software to continuously monitor your progress toward your goal. You may also find a need to make changes to the plan to achieve your goal. For example, you may need to boost your market research efforts or create incentives to persuade customers to try your business again.<\/p>\n\n\n\n Competitive benchmarking really is one of the best ways to become a top-rated company. And that\u2019s why your competitors use it as well. That means you need to make competitive benchmark analysis<\/a> a continuous practice for your company. Because once you surpass the competition, you\u2019ll become the benchmark.<\/p>\n\n\n\n When practiced over time, competitive benchmarking is a boon for your business. Just as important, it provides a yardstick you can use to measure your progress. And you\u2019ll reap the following benefits from it.<\/p>\n\n\n\n It\u2019s often difficult to see our own shortcomings. That\u2019s why looking at others can provide perspective. In business, competitive benchmarking creates a frame of reference so that we can see opportunities for improvement.<\/p>\n\n\n\n In a constantly-evolving business market, seeing the big picture can be tough. Market changes, customer preferences, and competitor strategies all affect your growth. Yet these changes can be difficult to spot. Benchmarking will help you identify the trends affecting your bottom line.<\/p>\n\n\n\n The roadmap for your success has to take into account your industry\u2019s landscape. Understanding what your competition does well will help you develop a plan for surpassing their results. Competitive benchmarking gives you insights that\u2019ll help you develop a winning strategy.<\/p>\n\n\n\n Companies that use data to make their decisions are more likely to hit their goals. The data you get from competitive benchmarking will help you figure out just where to focus your efforts. You\u2019re more likely to hit your targets because you\u2019re making decisions based on real-world information.<\/p>\n\n\n\n It\u2019s easy to become complacent and do things the same old way. But chances are someone out there has figured out how to be more streamlined and effective in the same processes you use daily. Competitive benchmarking will help you spot weak and ineffective methods that are preventing you from growing.<\/p>\n\n\n\n Benchmarking customer satisfaction levels will help you zero in on specific areas to improve the experience. You\u2019ll also be able to identify what\u2019s most important to your customers. Benchmarking software can take you deeper into insights by picking out keywords associated with the most common complaints or compliments. For example, if you\u2019re a hotel chain, running a simple sentiment analysis<\/a> will highlight \u201cold\u201d as being a recurring complaint about your d\u00e9cor.<\/p>\n\n\n\n Entrepreneurs know there\u2019s almost always a better way to do things. Strategic benchmarking will give you ideas on how to improve your company. You\u2019ll identify trends you couldn\u2019t see before. Benchmark metrics will help you gain a competitive edge.<\/p>\n\n\n\n Key performance indicators are at the heart of your benchmarking metrics. Collecting the data listed below will provide a panoramic view of where your company stands compared to your competitors.<\/p>\n\n\n\n Use competitive analysis to shine a spotlight on how your sales stack up. That kind of market research is built into performance benchmarking. Understanding your market share will help you develop strategies for growing your customer base.<\/p>\n\n\n\nCompetitive benchmarking versus competitive analysis<\/h2>\n\n\n\n
Best practices for competitive benchmarking<\/h2>\n\n\n\n
<\/figure>\n\n\n\nDefine your objectives<\/h3>\n\n\n\n
Select the benchmarking parameters<\/h3>\n\n\n\n
Gather data<\/h3>\n\n\n\n
Analyze the data<\/h3>\n\n\n\n
Identify gaps and opportunities<\/h3>\n\n\n\n
Develop and implement action plans <\/h3>\n\n\n\n
Monitor progress<\/h3>\n\n\n\n
Repeat the process<\/h3>\n\n\n\n
Competitive benchmarking benefits<\/h2>\n\n\n\n
<\/figure>\n\n\n\nIdentify areas for improvement<\/h3>\n\n\n\n
Gain insights into industry trends<\/h3>\n\n\n\n
Develop effective strategies<\/h3>\n\n\n\n
Enhance decision-making<\/h3>\n\n\n\n
Increase efficiency and productivity<\/h3>\n\n\n\n
Improve customer satisfaction<\/h3>\n\n\n\n
Stay competitive<\/h3>\n\n\n\n
Best competitive benchmarking metrics<\/h2>\n\n\n\n
<\/figure>\n\n\n\nMarket share<\/h3>\n\n\n\n
Sales growth rate<\/h3>\n\n\n\n
![\"Watch](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/NEW-Watch-Demo-Regular.png\")
<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"