What is competitive benchmarking?
Competitive benchmarking is the process of comparing your performance against an industry standard or a competitor based on critical metrics. Competitive benchmarking requires research of present and past data to uncover trends related to your business, gain visibility into your competitors' share of voice, and gather business intelligence on how customers are engaging with other brands in your industry.
Competitive benchmarking can be done internally among teams or externally among organizations. Brands can greatly enhance their external benchmarking by capturing customer experience data from social media and other digital channels, but to do so, it requires advanced artificial intelligence (AI) capabilities to gather and convert unstructured data into actionable insights.
Why is competitive benchmarking important?
Competitive benchmarking allows you to:
Gain actionable insights about your market position.
Analyze your performance versus your competitors and the market.
Track your performance indicators and work toward targets.
Use data-driven results to refine your strategy and be on par with industry trends.
Bring about internal reforms in the business process and establish best practices.
Recognize your strengths and spot opportunities for improvement.
Save time and reduce spending on inefficient processes.
Types of competitive benchmarking
There are three types of competitive benchmarking.
1. Process benchmarking
Process benchmarking includes analyzing processes of how teams or organizations function. For example, if you are a bank, you’d want to examine your customer onboarding process with your competitors and get insights into what you can do better.
2. Strategic benchmarking
Strategic benchmarking is a more micro-level form of benchmarking where you study the long-term strategy of a successful competitor’s business model. For example, a traditional retail business may check the system of an online platform and adopt the approach to expand further.
3. Performance benchmarking
Performance benchmarking is when you study the outcomes of your organizational processes versus those of your competitors. These outcomes can be annual revenue, customer satisfaction score, profitability, or the functional performance of your teams, to name a few. For example, as a software as a service (SaaS) company, you can compare your content strategy against your competitors’ to gauge what’s working for them and what measures you can take to increase your social media engagement.
What is the competitive benchmarking process?
Now that you know the advantages of competitive benchmarking, here are the steps you need to take to get started.
1. Identify your key performance indicators (KPIs).
To get started, your existing KPIs may help, but you also need to identify what other metrics you need to track. For example, if you’re selling fashion items online, and your growth stagnates after a year, it’s time to analyze what others are doing differently and update your strategy accordingly. You’ll need to track social media metrics, such as activity or engagement, in addition to traditional KPIs.
2. Identify competitors to benchmark against.
If you’re a medium-sized business and study a giant like Amazon, you’re set for heartbreak. Be sure to pick competitors who are similar in size and industry.
3. Identify your data sources.
Choose your data sources based on your KPIs. Some data sources are case studies, press releases, interviews, websites, social media, paid research reports, etc.
4. Research and collect data.
Research data from the different data sources you shortlisted and draw reports from the findings. There are tools in the market that can help you do this. Sprinklr Insights enables you to gather real-time data from multiple sources with its AI capabilities.
5. Prepare a plan of action.
Once you have the insights and reports, it’s time to reorganize. Implement changes in your processes and policies to start realizing the results you’ve targeted.
Upgrade your competitive benchmarking analysis with Sprinklr’s competitive insights and benchmarking tools.
Lack of actionable data makes it difficult to assess your company’s success in the industry, and traditional benchmarking methodology is slow and incomplete. Sprinklr Insights offers competitive insights and benchmarking tools that help you grow your business with AI-powered insights drawn from real-time customer experience data.
With Sprinklr’s Benchmarking Insights, you can:
Automate and centralize data collection of competitors’ social data.
Compare data on different competitors based on dozens of metrics.
Receive real-time email notifications on high-impact activities like a spike in engagement, follower count, or increased competitor activity.
Use AI insights to learn from competitor campaigns and reduce losses.
Be more efficient by listening, learning, and acting upon insights.
Improve customer experience on social channels by beating competitors’ service level agreement (SLA).
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