How Integrating Competitive Benchmarking in Market Research Works?

As a business, what makes you think you are better than others? If your answer is better than your competitors, then yes, you got it right. But apart from feeling good about it, do you know the benefits of comparing yourself to your competitors?

Yes, there are many benefits, and the process by which you unlock these benefits is called Competitive Benchmarking. This process allows you to benchmark the crucial factors in your industry by evaluating competitors and then surpassing them to become better.

However, the best part is that it becomes even better when you integrate it with market research, which is a process to analyze the market in various aspects. This duo allows you to grow better by making you more informed about your business. But if you are still confused, then worry not, as we are left with this whole blog to explain to you this ultimate duo in the world of business.

What is Competitive Benchmarking?

It is a process where you compare your performance with your competitors. It is not the same as competitor analysis, as when we do analysis, it refers to a thorough analysis of the competition. It includes looking at their pros and cons to gain a competitive advantage. On the other hand, competitive benchmarking is when you benchmark the performance of others in your industry for your company to chase it.

It is crucial for any business for many reasons, including:

● It has the ability to make you aware of your position in the market. 

● It helps you identify what you are doing better than other competitors and what you need to improve. 

● You can set achievable goals for your business to become better than the competition. 

● It helps you to learn about your progress over time, which is important to know if your strategies are working or not.

The Types:

1. Financial Benchmarking: It refers to the benchmarking of indicators that showcase the progress of a company in terms of financial performance. For instance, profitability, revenue generated in a month, quarter, or annually, and debt-to-equity ratio are some of the indicators that help in competitive financial benchmarking.

2. Strategic Benchmarking: In this, your focus has to be on the aspects that represent you in the market, like market share, market concentration, SEO ranking, etc. These factors are what hold you up or down in your industry. 

3. Product Benchmarking: As its name refers, it is the benchmarking of the product where you compare your product with the similar product being offered by the competition. The comparison has the key aspects like price, features, production cost etc. 

4. Process Benchmarking: Process benchmarking is the comparison of your processes to that of competitors to benchmark various factors. Such as, how is their hiring process, how well their customer service is and how much they spend on customer acquisition, etc.

What is Market Research?

● It is used to analyze the market for various reasons like the trends, customer behavior and other market dynamics.

● It helps the brands to understand the future trends in advance, any change in customer's behavior and anything else like a business opportunity. Hence, the business can prepare for what's coming and make changes accordingly.

● It can be done through various means, such as surveys, focus groups, interviews, and the analysis of existing data. These methods are divided into two types: primary and secondary MR. So, if you choose a first-hand method like surveys, it will be primary research, while analyzing the existing data, such as other research, will be secondary research. Moreover, the outcome of the Market Research can also be of two types, which are qualitative and quantitative. In simple terms, it can either be represented in numbers or in detail. 

Integrating Competitive Benchmarking into Market Research

Since you now know both of these business concepts, let's get into the details of how to integrate one into another. Before we start, let's first understand what will happen if we do so. 

When you integrate competitive benchmarking with MR, what it does is that it narrows down the scope of research to focus on your competitors. So, now you have your competitors as the subject of research, which means whatever they are doing, you'll be able to know it as a benchmark that you have to surpass with your strategies.

Now, when you benchmark your competitors, you can identify the gaps in the market, learn about the customers' expectations, and learn about the trends that will soon emerge in your industry. For instance, if you benchmark the customer satisfaction level of your competitors' customers, then you can use it for your organization. You can use MR methods like NPS, CSAT, and CES surveys to find your customers' satisfaction level and compare it to see if you are better or not.

Moreover, you can continue with more comprehensive market research methods like telephonic interviews with open-ended questions to find the solutions and strategies to deploy to be better than your competitors.

The Evolving Role of Competitive Benchmarking in Market Research

As we look to the future, this duo is poised to become a cornerstone of strategic decision-making. Here's why:

● Comprehensive and Data-Driven Insights

By merging competitive benchmarking with MR, businesses can get access to more detailed data sets. You will be able to combine information on both internal performance metrics and external market trends. As a result, companies will be able to make more informed decisions backed by strong data in the future. Hence, this data-driven approach will become important in making your way through the complexities of future markets. 

● Real-Time Market Adaptation

As the power of AI and advanced analytics gets better, the benchmarking will be conducted in real-time. Because of this, you will be able to track competitors' actions continuously for your business. So, this ability to speed up strategizing will become a game changer. Most importantly, it will allow your company to stay active and be responsive in the ever-changing market conditions.

● Innovation and Differentiation

Innovation will definitely become the key differentiator in the future. So, when this happens, competitive benchmarking will become the main promoter of creativity. Hence, businesses will be able to identify opportunities for innovation by understanding where their competitors are falling short. As a result, benchmarking will help you stay ahead of the curve in the future as well.

● Sustainable Competitive Advantage

With this pair of business tools, businesses can stay ahead of their rivals. You will be able to build a lasting edge in the market if you keep analyzing your competitors regularly. In fact, your business will become more likely to succeed if you keep learning from others and adapting accordingly. So, this forward-thinking approach will become your key to staying relevant and competitive over time.

Wrapping Up

To sum up, this is how this binate works. So, if you are stuck somewhere without a hint or you think that you are lacking from your competitors, then you must embrace the benefits of this duo. However, make sure to be backed by professionals so that your efforts don't go to waste.