Benchmarking Is An Important Competitive Intelligence Tool To Really Understand Competitors
Benchmarking Is An Important Competitive Intelligence Tool To Really Understand Competitors: Weekly Winning Strategies
We all know benchmarking is an important competitive intelligence tool. In theory, it empowers us to learn from industry best practices and avoid pitfalls by analysing competitors. However, it must be understood properly and executed, resulting in missed opportunities. So, here’s how you can implement benchmarking to elevate your competitive edge:
“Benchmarking done right isn’t about copying competitors; it’s about outshining them by defining their successes into unique strategies that align with your goals”.
Begin With Clear Objectives
Before diving into the data, Googling and those databases establish your purpose and goals for benchmarking. Doing benchmarking without knowing why you are doing it won’t yield great results. Are you benchmarking to refine your pricing strategy? (There’s more to it than just comparing yourself with your competitors’ pricing.) Or are you aiming to improve product quality by studying their production processes? Clarifying focus allows you to collect and analyse only the most relevant data. Saving time and aligning your efforts sharply with your business objectives.
Identify And Vet Relevant Competitors
Not every competitor’s strategy is worth studying. Look for the market leaders or those with cutting-edge strategies you aspire to adopt. Don’t select the obvious ones. The competitors you have always competed against. Look at their business models and processes to identify those who align with your goals. Do they share similar customer demographics and market dynamics? No, why not?
Capture Both Quantitative And Qualitative Data
Quantitative data, like their revenue, customer growth, or product adoption, offers performance insights. But pay attention to qualitative data. The user reviews, customer service quality, and brand perception. Again, it’s so much more than looking at their latest G2 rating or what someone has said on Glassdoor. These provide deeper insight into the customer journey and brand loyalty. All of which will help you identify gaps in your product or service.
Contextualise The Insights
Data without any context is misleading and will lead to inaccurate conclusions. For example, a competitor’s high churn rate may be due to poor service or a frequently changing user base. It may not be seen as value for money, or the customers see something better in the market. It could be because their sales team sold them something different from reality. Before making changes, you must understand the wider market and industry trends that could impact the analysis.
Focus On Process, Not Just Outcomes
It’s tempting to fixate on the end results like profit margins or market share. Understand the processes behind those results. Like their marketing strategies or supply chain management. Benchmarking processes help you identify best practices to replicate or pitfalls to avoid in your sector. What you find out during the exercise, the pulling of the strings and answering the “Why’s that’s” are so much more important than the end result of, say, finding out their revenue figures.
For instance, you may find that a competitor’s marketing strategy is driving their high-profit margins or how they communicate their go-to-market message rather than what they communicate. Understanding this process can help you adapt and improve your own marketing efforts, none of which you can read from a spreadsheet.
Adapt, Don’t Copy
Every business is unique, so a direct copy-paste approach won’t work. Instead, translate the best practices of others into strategies that fit your culture and market. Adapt what works and mould it into your distinctive operational and branding strategy, giving you a unique competitive edge. It’s a chance to make changes to outshine, not keep up with your competitors. So don’t copy; look to improve on what they do.
Monitor Continuously
Benchmarking isn’t a one-and-done activity. Regularly track your benchmarks to gauge your progress and adjust your strategy in response to market shifts. It’s about maintaining a consistent edge over your competitors rather than just catching up.
You’re Just An Afterthought.
There’s usually one aspect of benchmarking that’s often left to the end. Sometimes it’s completely ignored. Your own business needs to be put through the benchmarking exercise. Work on your own business frequently gets neglected. Why? Well, because you know your own business, dont you? But many assumptions and biases are swimming around here. So, your benchmarking needs to consider your strengths and weaknesses honestly.
So we know benchmarking is an important competitive intelligence tool to really understand competitors. So by following these steps, benchmarking can transform into a strategic advantage. It can uncover opportunities for growth and improvement that might otherwise go unnoticed. Your competitive intelligence will be less of a guessing game and more of an approach to success.
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