How to do competitive benchmarking
Competitive benchmarking is the practice of comparing your organization against set competitors over time, by using a set of predetermined metrics.
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It forms an important part of competitor analysis - evaluating your competitors to determine their strengths and weaknesses compared to those of your brand. In short, competitive benchmarking allows you, from a macro to micro scale, gain insight into your organization; see how it compares; and remain competitive as a result. It means that not only can you identify opportunities for internal alignment and improvement, but also spot trends and identify those opportunities which arise when your competitors start slacking.
But benchmarking shouldn’t be another tick box exercise. After all, it’s all about remaining competitive. So, now we’ve understood what competitive benchmarking is and why you should benchmark against competitors, let’s take a look at how to do it.
1. How to select and segment competitors to benchmark against
We can look at which competitors to benchmark against through two lenses - the ways to identify competitors, and how to segment them. Let’s start with the former. In identifying competitors, you’ll want to make sure you have the most holistic overview possible, and this will mean using a mixture of first and third party data sources.
Ultimately, most organizations benchmark against competitors for one reason - to win and retain more business. So naturally the first thing to understand is those instances where you don’t do that. When do you lose, and who do you lose against? CRM systems like HubSpot and Salesforce often include further fields within the ‘closed lost’ section of a deal, with your sales team able to identify who you lost the deal to (and, more often than not, why). This is a great, free way to work out who your competitors are when it comes to the RFP or deal stage.
A step ahead of getting on the RFP rosta, is getting known. Arguably, much of that is achieved through earned media (media interviews, press coverage, and the like), and shared media (mainly social media posts). So, which competitors are you coming up against here? Using a platform like Talkwalker will enable you to, based on your keywords, identify the accounts posting in your space. In next to no time, you’ve identified your competitors through social listening.
And when it comes to keywords, social media isn’t the only place for brands to play. Owned content like blogs and landing pages, as well as paid media like Google Ads, have a huge role to play not only in marketing; but in competitor identification. Using tools such as Semrush, you can discover how your brand fares when it comes to keywords related to your products, and uncover those alternative brands also creating content, and bidding on the terms.
And that’s all great. But not all competitors are the same. So how do you segment your competitors? Most organizations split their competitors into three main buckets:
- Direct Competitors: These are the ones who beat you. The ones you beat. The brands you come up against time and again. You’ll go toe to toe in the buying process, and you’ll likely already be familiar with one another’s strategies.
- Market Leaders: These are the big players. This is the aspiration. And although competitive analysis against such big beasts can seem unnerving and perhaps even unnecessary; it can help you evaluate where you want to be and the sort of milestones you’ll need to be hitting in terms of your marketing communications in order to get there.
- Niche players/rising stars: These are the competitors whose product/service offering is likely less complete, and their ability to deliver is also trounced by competitors. But it’s important to monitor them nonetheless - they can be more competitive on price, they can differentiate on elements such as service; and funding could see them grow rapidly in a short time.
2. Which metrics should I use within my competitive benchmarking?
As always, start with your objectives. It really is that simple. These objectives likely span paid, earned, owned, and shared media (PESO). Or at least they should. And, if they don’t, competitive benchmarking gives you the opportunity to think more strategically and consult with the broader organization to understand which needles need to be moved to drive genuine impact.
For any organization, PESO is a good place to start:
- Paid: With large chunks of most marketing budgets being sent straight to paid ads, it’s important to understand how that spend stacks up against your competitors, and the results it is generating. Use digital marketing tools like Semrush or Similarweb to determine how your spend compares to competitors in each area, how performance differs for the keywords you’re bidding on, and traffic to each of your competitors as a result.
- Earned: This is where most PR and comms practitioners begin. They want to understand not only the value of their outputs, but how they can work strategically to outperform competitors. The metrics available here are endless, but most communicators would begin with Share of Voice (SoV), sentiment, and backlinks to your website.
- Shared and Owned: Social media is where it's happening. It is where your brand can get closer to consumers and level-up. But it can be hard to cut through the noise, and in turn it can be tricky to get to the metrics that matter. In the here and now, you should be looking at Social Share of Voice (SSoV), sentiment, reach, impressions, and engagement. But you also need to look forward - don’t rule out metrics like Audience Growth Rate or Amplification Rate either.
3. Things to remember when competitor benchmarking
Don’t forget - the most future-proofed marketers, PR pros, and communications practitioners are those who are data-driven, and led by the insights. But those insights are only valuable if they are valuable to the wider business. So…
- Ensure your competitive benchmarking is objective-led, so you can link progress back and see the needle moving.
- Anchor your efforts back to business impact, understanding that the metrics that matter go beyond reach or SoV in isolation, and instead demonstrate the tangible impact these metrics are having on you, and on your competitors.
- Share your findings with stakeholders. The intel you’ve gathered needs to be shared throughout the organization, from top to bottom, and be embedded in the strategic direction of the company, as well as the way the team goes about its day-to-day thinking.
- Feed everything back into your strategy in one feedback loop. This is not a tick box exercise - competitor benchmarking could make or break your growth over the next quarter, fiscal year, and so on. It's no good just gathering data, you also need to implement the changes.
- Think PESO - paid, earned, shared, and owned. Benchmarking against one channel or one area is like building your office on quick sand. There’s just no way you’ll be able to adapt and evolve with the rapidly changing competitor landscape.
- Ensure your tech stack supports you in that mission. Market research, media monitoring, or reviews are no longer good enough in isolation. It is time for us to get close to the data, and bridge the gap between brand and consumer. Holistic competitor benchmarking is a core part of that task.
When it comes to competitive benchmarking, you’re best to begin simply, but simply begin. Don’t worry about not being able to afford the time or cash to do it. In 2022, you can’t afford not to do it.