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.
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.