Benchmarking consists of identifying the competition, both in terms of quantity, type of product or service, and the practices and strategies that they carry out in their own company. It is a campaign to contrast the methods of your company and the competition. The main objective is to find out how the market situation is in order to know where you need to improve your own strategy. Benchmarking comes from the English "benchmark" which means "reference" and is an essential management tool to improve processes, products and services.
To get all this information, it is about doing a competitor analysis, identifying the strengths and weaknesses of companies or brands that work in your sector. Thanks to a good analysis, you have the possibility to recognise how to optimise your own strategy. Determine who are your most active competitors and their buyer personas. Detect the level of interaction with their customers. You can discover new trends in the market or new user needs that are not yet covered. You have the opportunity to improve the relationship with your customers, by initiating a unique experience.
However, we have to be careful when conducting a competitor analysis. It's not about de-friending our competitors, but about how our business can improve. That's why we are going to point out which criteria we have to take into account.
9 CRITERIA TO TAKE INTO ACCOUNT IN A BENCHMARKING PROCESS
- The competitors you are comparing yourself with must be in the same category or subcategory as your product or service.
- That they satisfy the same customer needs that your company aims to satisfy.
- If you are in the same price range. Compare prices. Different marketing channels allow you to change prices or promotions based on customer profiles. Determine whether competitors offer higher or lower prices. This can help you set prices or promotions.
- Whether you share the same cards or target the same type of buyer persona.
- Whether you distribute your products or services in the same area.
- Identify the star, cow and dog products. What do we mean by these terms? Star products have high growth and high market share. Cow products are a high status product, although due to their high market share they have low growth. And finally, dog products make a small contribution to the business and may be consumer goods at a given time. Knowing the ranking of your competitors, evaluate your competitors and see where you have the opportunity to compete, where you need to improve and where you are superior.
- Acknowledge competitors' best practices. Designate all the processes that are done well and highlight the best campaigns. By evaluating competitors' processes, you can detect where you can improve the experience.
- Generate a calendar and specify the date and duration of campaigns so you can more easily implement the most relevant ones. You can advance promotional campaigns to your competitors.
- Communication channels: There is no better way to analyse your competitors than to know all the places where they interact. The communication channels they use to reach their audience. Analyse the type of communication and the frequency.
To start with benchmarking it is essential to analyse two elements: SEO and SWOT.
- We already know what SEO strategy is. The SEO strategy of your competitors can really play a crucial role in evaluating and comparing your position in search engine rankings. As well as identifying keywords, as using different keywords will increase the visibility of your website.
- SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), is to understand what actions should be taken to take advantage of opportunities, reduce threats, analyse your strengths and weaknesses. It is important to know that with proper analysis, your competitor's strengths can be yours and well researched weaknesses can help improve your business. You can study your competitor's annual reports in the Register of Commerce. Thus, understand the buying and selling volumes as well as trade reports.
By doing a competitor analysis, it becomes possible to identify the strengths and weaknesses of companies or brands working in your sector. With good market research you recognise how to optimise your own strategy. Determine who your most active competitors are and their buyer personas. Thanks to this, you can outline in a more concise way the characteristics of your target and niche market.
In the free market landscape, businesses have become more competitive. Businesses that fail to update and improve their solutions and business needs can fall into oblivion and therefore bankruptcy. Therefore, it is important to know your competitors. This is how the process of benchmarking arises, with which you can study the failures and successes of other companies in the same market guild to get new ideas that can be applied to a business reality.
The objective of implementing this strategy is to provide you with knowledge about your own company. The main focus of this campaign is your company as a reference point. The points that can be evaluated can be: your products or services, employees, sales volume, response rate, social media status, and a myriad of other issues.
It's all about marking the elements you want to study within your boundary of possibilities. This is achieved by setting comparable and SMART objectives. If you want to read more about SMART objectives, read our blog article. With fixed goals, the process that allows a company to achieve the results becomes easily understandable and can be applied to your strategy.
By setting realistic and achievable targets to analyse against the competition, we can help our business not to get lost in absurd criteria and instead focus on more specific issues. Benchmarking will help us understand what to focus on during the work, to improve our weaknesses and boost our company's strengths.
