Importance of Competitive Analysis and Benchmarking
Feb. 20, 2023
--By Shrishti Giri--
Customers are the primary concern and organizations are trying hard to be the first choice of their customers. Though everybody is in the race to impress the customers and prospects with every possible tactic today, still what the customers are looking for is delight and personalization. To switch over from just providing satisfaction to offering a delightful customer experience, benchmarking is the process that can help every business to do so. When the discussion is about competitive benchmarking, it’s not only about immediate competitors or businesses of a particular field but it is far more concerning today’s technology-driven world. For instance- the biggest competitor for any retail store is not only the other retail store selling the same goods or products but also the increasing trend of online shopping due to the emergence of the e-commerce industry. The idea of competitive analysis and benchmarking has widened and businesses need to fabricate their strategies after benchmarking against every competition offline or online.
Why competitive benchmarking?
Competitive benchmarking helps to measure efforts and performance against competitors. This process not only rates but also compares with competitors time and again. Organizations gain an organized overview of the company at various levels and also get clear insights into the working of competitors, hence, developing their strategies accordingly. Benchmarking is essential to progress and analyze the areas of improvement irrespective of industry. It is completely a customized process wherein companies can decide which department or process they want to compare and assess. Organizations can begin by setting their competitive benchmarks followed by choosing the competitors not only from the physical space but from every platform.
How to decide on competitive benchmarks?
As there are many aspects, departments, and touchpoints in any business that needs to be assessed, it becomes a bit confusing to decide how and what should be benchmarked. So, to make it easy in the first place, there is a need to recall the reasons to benchmark and the relevant metrics mostly related to quality, time, and cost. For instance-if, the competitor is more approachable on social media and your organization’s presence has dropped on various social media platforms then it’s time to investigate. There might be two possible reasons-either your customers are expecting a lot more from you or the competitor is up to something innovative. This comparison clearly states that assessing one's performance within the organization with past status is not enough; there is an evident need to benchmark against competition.
Who is the real competitor?
To decide on the competitors, the very first thing to be kept in mind is that the business space has changed from tip to toe and the companies are trying to identify the next change for their future strategies. The rise of AI and e-commerce marketplaces has changed the competitive scenario. Though one can initiate with close competitors who have the same size and are equally successful but benchmarking only against them is not enough. The biggest factor to benchmark is to find out whether your business fulfilling your customers’ wants. Or are your customers delighted with your services? If these questions do not have a ‘yes’ as an answer, then competition can be tough. Organizations and businesses have to accept the fact that technology is taking over and is predicted to be one of the biggest and toughest competitors for every business, hence, they need to come up with something extremely innovative that would personalize customer experience reducing their efforts next to negligible.
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Competitive benchmarking is time-consuming, but the time consumed during the process gives you invaluable insights leading to well-developed ‘Go to Market’ strategies and better business.
Let’s build happy customers through competitive benchmarking and identifying the next disruption.