effective benchmarking expert tips to improve your brand

Expert Tips for Effective Competitive Benchmarking

Every successful company that ever exists, has used competitive benchmarking at least once in their existence. It could be in the product development phase or the launch phase, or when certain features or products fail to land well. 

In all these scenarios, competitive benchmarking – comparing your company’s performance against industry leaders or competitors, is vital to ensure success. 

Let’s understand how it helps. 

Tips for Successful Competitive Benchmarking

1. Identify Your Goals and Metrics

Before starting any benchmarking process, it’s vital to identify what you want to accomplish. Are you looking to improve customer service, increase sales, reduce costs, or enhance product quality? Once you have clear goals in mind, determine the key performance indicators (KPIs) relevant to those objectives. These could include metrics such as conversion rates, average order value, net promoter score, or return on investment.

Identify Your Goals and Metrics

Image Source: Towards Data Science

Step 1: Brainstorm with your team to list potential areas for improvement.

Step 2: Prioritize these areas based on strategic importance and feasibility.

Step 3: Select appropriate Key Performance Indicators (KPIs) for each area identified.

2. Choose the Right Companies to Compare With

Select companies similar to yours in terms of size, market share, products offered, target audience, etc., but also consider aspirational organizations known for their best practices. Be sure not to limit yourself only to direct competitors; sometimes, businesses outside your immediate field can offer valuable insights into innovative approaches and strategies.

Choose the Right Companies to Compare With

Image Source: HubSpot Blog 

Step 1: Research industry leaders and aspiring organizations.

Step 2: Create a list of potential comparison companies based on factors like size, market share, products offered, target audience, etc.

Step 3: Validate your choices by discussing with internal experts or consulting external resources.

3. Gather Data Systematically

Collect data systematically from multiple sources like annual reports, financial statements, press releases, social media platforms, online reviews, and industry surveys. Use automated tools where possible to streamline the data collection process, ensuring consistency and accuracy. Regularly update your database so that your comparisons remain current.

Step 1: Define a consistent data collection process.

Step 2: Assign tasks to team members responsible for different aspects of data collection.

Step 3: Utilize automation tools wherever possible to ensure efficiency and accuracy.

Step 4: Store collected data securely in a central location accessible to authorized personnel only.

4. Analyze Data Thoroughly

Analyzing collected data is just as important as gathering it. Look beyond raw numbers and percentages to understand trends, patterns, correlations, and anomalies. Consider using statistical analysis techniques, visualization tools, and machine learning algorithms to extract meaningful insights from complex datasets. Remember, context matters: Understand the story behind each data point before concluding.

Zapier

Image Source: Zapier 

Step 1: Clean and preprocess the dataset to remove inconsistencies or errors.

Step 2: Apply statistical analysis techniques to discover trends, patterns, and correlations.

Step 3: Use visualization tools to represent findings graphically for easy understanding.

Step 4: Interpret results in the context of your organizational goals and industry landscape.

5. Draw Actionable Insights

Translate findings into actionable recommendations tailored to your organization’s unique situation. For example, if a competitor offers faster delivery times, analyze how they do it and explore whether implementing similar methods makes sense for your business. Avoid copying blindly; instead, adapt successful competitor strategies creatively within your operational constraints.

Step 1: Identify strengths and weaknesses relative to competitors.

Step 2: Translate analytical findings into practical recommendations tailored to your organization.

Step 3: Evaluate proposed changes considering resource availability, timelines, and potential impact.

6. Communicate Results Clearly

Present results clearly and concisely, focusing on implications rather than details. Make sure all stakeholders understand the purpose of the study, its methodology, major findings, and recommended actions. Visual aids like charts, graphs, infographics, and dashboards can facilitate comprehension and engagement.

Step 1: Design presentations using simple language and engaging visuals.

Step 2: Tailor content according to the audience’s background and interests.

Step 3: Provide ample opportunity for questions, discussions, and clarifications.

Step 4: Summarize key takeaways and next steps in follow-up communications.

7. Implement Changes Strategically

Implement changes strategically, monitoring progress closely to ensure desired outcomes are achieved. Continuously review KPIs and adjust tactics accordingly based on real-time feedback loops. Keep track of ongoing improvements and communicate successes back to the team to maintain motivation and momentum.

Step 1: Develop detailed implementation plans including milestones, responsibilities, and contingency measures.

Step 2: Allocate necessary resources and obtain required approvals.

Step 3: Monitor progress regularly through established feedback loops.

Step 4: Adjust the course as needed based on real-time feedback and changing circumstances.

8. Establish a Culture of Continuous Improvement

Competitive benchmarking should be part of an ongoing effort towards continuous improvement, not a one-off exercise. Encourage employees at all levels to participate in identifying areas for improvement, setting targets, collecting data, analyzing results, and suggesting solutions. Foster a culture where constructive criticism and open dialogue lead to innovation and growth.

Establish a Culture of Continuous Improvement

Image Source: BetterUp

Step 1: Encourage employee participation in benchmarking activities.

Step 2: Recognize and reward contributions made towards continuous improvement efforts.

Step 3: Incorporate lessons learned from past experiences into future planning and decision-making processes.

9. Respect Ethical Guidelines

When conducting competitive benchmarking, always respect ethical guidelines related to confidentiality, privacy, fairness, and legality. Never engage in espionage or deceptive practices, which could damage your reputation and expose you to legal risks. Always seek permission when using proprietary information belonging to others, even if publicly available.

Step 1: Familiarize yourself with applicable laws and regulations governing competitive intelligence.

Step 2: Ensure transparency and honesty throughout the benchmarking process.

Step 3: Seek explicit consent whenever utilizing proprietary information belonging to others.

10. Learn From Failures

Not every benchmarking initiative will yield positive results. Don’t shy away from acknowledging failures; instead, use them as opportunities to learn and grow. Reflect on why certain initiatives didn’t work out, what could have been done differently, and how to avoid similar pitfalls in future endeavors. Embrace failure as a natural step toward long-term success.

Step 1: Conduct post-mortem analyses to identify reasons behind failed initiatives.

Step 2: Document lessons learned for future reference.

Step 3: Share insights gained from failures across the organization to promote collective wisdom.

Step 4: Maintain a positive attitude towards experimentation and risk-taking despite setbacks.

Conclusion 

Competitive benchmarking is necessary with the competition that exists today. If you’re interested in a platform that provides clear and actionable insights on competitors, schedule a demo with 42Signals today. 

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