Competitor benchmarking provides insight into what a competitor is doing, what works, what doesn’t work, and ultimately what you can use to your own advantage – either through adopting successful practices or avoiding ineffective ones.
As a website owner or brand you know if your online assets are performing. However, do you know if they’re performing as well as they potentially could or if a competitor is doing even better? In isolation your performance reports don’t show the full story. The competition might be selling more to your ideal customers.
These are the sorts of insights which will show brands how well they are doing. A false understanding of performance – i.e. when you could actually be doing a lot better than you are – is dangerous as you won’t know you’re struggling until it’s too late. This is why you need to benchmark yourself against your opposition.
There are plenty of other benefits provided by a benchmarking exercise.
- to improve the effectiveness of search, display, affiliate, email and social marketing campaigns
- to make timely decisions based on the products and services consumers are searching for
- see the demographic, attitudinal and behavioural characteristics of your competitors’ website visitors and compare them to yours
How does benchmarking help brands?
There are a variety of ways brands can use the results of online benchmarking . First, brands can simply choose to put more effort into a given area that may have been neglected in the past. Another option is to adopt some of the best practices employed by a competitor, implementing them effectively into an existing own business plan. Finally, brands can opt for innovation, and attempt to create a new tactic or strategy based on what has been learned.
Best practice benchmarking
Although benchmarking should be an integral part of every brand’s marketing planning there are still pitfalls to be aware of and issues to be considered. Here are the top five considerations:
- Be clear about what is being benchmarked and why it’s being done. It’s important to have a purpose and a goal. If it’s going to cost money and take time these efforts need to be justified with a clear answer to ‘what are we trying to achieve?’
- Remember that benchmarking should be a continuous and on-going process, not a one off. You may get some one-off wins from individual findings but the process of competitor benchmarking should be constant.
- Don’t use the wrong tools. There are a lot of tools available with some offering cheap options and free trials. While it may be tempting to use inferior tools the insights gained will not be the whole picture and won’t deliver reliable insights. If done correctly the benefits of a thorough benchmarking will outweigh the cost – so do it properly, just remember to have a clear goal.
- Don’t miss competitors. In the online space competitors aren’t just those offering similar products. A brand’s online competitors include all websites which are competing for the attentions of the same people. This often comes down to the types of content and topics they are interested in. If analysing a paid channel (PPC, social media advertising) there will be a varied selection of brands bidding for the same keywords/traffic.
- Make it actionable. This point is heavily linked to having a purpose, it’s crucial that work and investment result in some kind of action that delivers benefits. This can be ensured by fully justifying the work in the first place and prioritising actions based on potential benefits to the business.
- Ensure you are measuring performance. In order to be able to prove that benchmarking works it’s critical that the correct tracking and analytics is in place from that start so that increases and changes are transparent – from the moment they were implemented.
What does competitor benchmarking mean for brands?
Brands should think first and foremost about their customers. If the customer wants something then the brand should do its utmost to provide it. Actions off the back of a benchmarking exercise should not be taken simply because competitors are doing a certain thing. Decisions need to be made with the customer front of mind – it could be the competitor is doing something which is not beneficial to the customer, in which case it should be avoided.
Competitor knowledge should be used to gain insights into what your customers want and what’s working – not as a base for an entire strategy.
Competitor benchmarking is an industry-standard process. This means that brands not doing so are quickly going to get left behind, not by a single competitor with a breakthrough or revolutionary strategy, but by every other competitor who has sight of that fast-moving competitor.
Essentially, online competitor benchmarking HAS to be part of every brand’s marketing strategy.