With numerous players in the market, you need to be updated with all kinds of industry information. According to Emerald.com, 90% of Fortune 500 companies use Competitive Intelligence to gain an edge over industry competitors. This is where competitive benchmarking comes into play. Let us explore benchmarking research and how you can make the most of it to ensure business success.
What is Benchmarking?
The Merriam-Webster dictionary defines benchmarking as: Something that can be used as a way to judge the quality or level of other, similar things. In the business world, benchmarking is a systematic process of measuring your company’s relative performance and metrics compared to industry standards, competitors and historical data. Benchmarking data is usually an identified metric to industry best and best practises from other companies within the same industry.
Understanding industry benchmark is not a one-time process. It is a continuous improvement testing with the help of which you understand where you stand within the industry. This would enabling you to make improvements according to industry best practices to give you a competitive edge and stay ahead in the game.
Competitive benchmarking provides a high-level view of the competitive landscape. It brings together information on strategies, trends and best practices. This is not to be confused with “competitive analysis” which is more of a deep dive into individual competitors strengths and weaknesses.
Why is Benchmarking Research Important?
While this sounds very interesting you might ask why it is so important. Think of benchmarking as a compass guiding you within your industry. While you might be doing a lot of research, it is not always easy to know everything about the industry. Not only does it help you stay competitive, it will also give an organized view of how well your company is doing at different levels. Benchmarking research is the answer when there is stunted growth to understand your strength and weaknesses and relook at your strategy and positioning based on performance.
You will get answers to some key questions such as:
What are the strengths and weaknesses of your products, services, or brand compared to competitors?
How does your performance stack up against the competition?
What sets your products apart, and what can be improved?
How can you outpace your rivals in the market?
What can you do differently or better to secure your position?
How to Conduct Benchmarking Research?
Conducting Benchmarking Research is a systematic process. Let’s deep dive into the steps involved:
Define Objectives: Before getting into the nitty gritty of benchmarking research, understand the objective you are trying to achieve. What do you aim to achieve through benchmarking? Is your focus improving efficiency, enhance product quality, or boost customer satisfaction? Understanding your goal ensures you have a specific path to works towards during the research process.
Identify Key Metrics: Benchmarking is as good as the metrics you choose. The key performance indicators (KPIs) you choose should align with your business objectives and goals. Whether it's customer satisfaction, revenue growth rates, or operational efficiency, choose metrics that can create a positive impact.
Choose The Right Competitors: Many times, who you consider competition might not be one while someone not in your radar might turn out to be your biggest adversary. Understand and choose relevant competitors wisely. Focus on direct competitors but also ensure disruptors and complimentary sectors are within your purview as well.
Data Collection and Analysis: Gather data meticulously. This involves not only your own performance data but also that of your competitors and industry benchmarks. utilize tools, surveys, and market research to ensure your data is comprehensive. Once you have the data, it's time to analyze—look for trends, outliers, and areas of improvement.
Implement Strategies: Once you have the results of the test, strategies need to be aligned accordingly. Identify areas for improvement, craft strategies, and implement them. Whether it's refining your marketing approach, streamlining processes, or innovating products, let your benchmarking insights drive your business decisions.
Key Metrics in Benchmarking Research
When you're sizing up the competition, ensure you keep your eyes on a few key metrics:
Awareness: Understand your market and how knowledgeable they are about your product and your direct and indirect competitors. Also, understand market size and your total addressable market.
Perception: Not only do you ned to understand the market, the market also need to understand you. What is the perception of your brand in the minds of the users/consumers? Is your positioning correct or do you need to realign that?
References: This metric measures how likely people are likely to spead word about your product through references. Word-of-mouth is one of the best ways to high growth.
Customer Satisfaction: A major chunk of sale happens through repeat customers rather than new customers. Keeping your customers happy is a key metric to a successful business. Completition surveillance aside, even brand loyal can be measured through benchmarking.
Best practices in Benchmarking Research
Continuous Monitoring: Benchmarking isn't something you should do only once. It's an ongoing process. Regularly monitor and update your benchmarks to be updated with ever changing consumer needs and stay relevant.
Stay Agile: With evolving consumer needs, market conditions keep changing as well. Ensure you are ready to take on decisions which might require changing strategic decisions in line with benchmarking research results.
Embrace Technology: Tools and technologies like Entropik’s Decode provides the platform and technologies for conducting research and gathering insights. These can help make the benchmarking process more steamlined and provide deep insights for quick decision making.
Every data point, every analysis, and every strategy is a step closer to market dominance. Brands that take extra steps to learn everything about the industry and act on the information gains a competitive edge. Benchmarking, as a strategic compass for business, give you the knowledge to be able to get an edge in the market. It's not just about gathering data; it's about transforming raw information into actionable insights.
By meticulously analyzing data points and conducting thorough industry assessments, businesses can uncover hidden opportunities and potential threats. This deep dive into the market landscape enables companies to fine-tune their strategies, understand consumer behavior, and stay ahead of industry trends. By comparing performance metrics against industry leaders and best practices, organizations can identify areas for improvement and innovation. This process is like a tailored fitness plan for businesses—targeting weaknesses, building strengths, and enhancing overall performance.
Moreover, the insights derived from benchmarking empower decision-makers to make informed choices. Whether it's optimizing operations, refining marketing strategies, or enhancing product development, businesses armed with comprehensive knowledge are better positioned to navigate challenges and capitalize on opportunities.
In conclusion, the journey to market dominance is paved with a commitment to continuous learning and strategic adaptation. Benchmarking serves as a powerful tool for businesses to not only survive but thrive in a competitive landscape