Businesses across the globe are shifting their focus to building top-notch customer experiences. So, having a competitive benchmarking strategy is vital to stay ahead of the game. Although competitive benchmarking essentially involves comparing your company’s performance with those of the key competitors, it is much more than a casual and anecdotal view of the competition. It also involves pinpointing which of the competitor strategies to focus on and also provides an idea on the benchmarking metrices to use. A well thought-out competitive benchmarking strategy is a worthwhile pursuit that will yield desired results for businesses. It helps to measure the performance of a company and compare it to others over time. Take a look at these six competitive benchmarking best practices to follow for effective and impactful business results.
Competitive benchmarking best practices
Understanding competition and gaining a clear overview of their strategies is like a map that shows a business the path to their ultimate destination. The sooner this is done, the better for companies to transition from a reactive to a strategic organization. Half the work in competitive benchmarking is done if businesses know where to begin. Also, make it a point to establish a measurement and tracking system that keeps tabs on the progress.
Maintain a timeline
Competitive benchmarking is an extremely time-consuming process as it involves researching competitors, analyzing opportunities for improvement, and implementing changes. It is advisable to limit the scope of benchmarking to research and other activities that can be finished within a time period that reflects a typical planning cycle in the company. By doing so, businesses can analyze how they compare to their competitors early in the cycle, implement changes, and share the results that can help in better planning for the next quarter. Request a free proposal to know more.
Take inspiration from other industries
Organizations can gain useful insights from analyzing companies operating outside their industry. Start by identifying one critical problem and then understand how companies in other industries with similar challenges are handling the situation. Understanding how companies in other industries are solving challenges can help organizations frame similar strategies to overcome their problems. For instance, examining how companies in the retail industry handle customer grievances and their increased focus on customer experience can help companies in other sectors to follow similar strategies to retain their customers.
Use meaningful metrics
There are several metrics that can be used to measure the overall health of a business. This makes it essential for businesses to be collectively clear on which metrics define superior performance and world-class customer support. Benchmarking research should be limited to factors that are standard across the industry, making comparison easier. Before rolling out the plan, it is also important to involve various teams to reach a consensus on how these metrics will be measured. Furthermore, focusing on key business-driving metrics like revenue, order volume, and cost of goods sold makes researching competitors and measuring success more effective.
Focus on operational improvements
Once an organization gains a clear understanding of where they want to be, the focus should be shifted to team operations rather than emphasizing only on metrics. Statics can only be studied to make improvements, however, factors such as people, processes, technology, and strategies can be improved to enhance the overall performance of the business before it is too late.
Choose the right peer group
Key factors including location, size, industry, product category, and business model should be taken into consideration based on the company’s goals. For instance, if the prime objective of an organization is to understand how your performance compares to companies similar to theirs, they must limit the peer group to the same industry. However, if the intent is to gain perspective on different business processes and push the team to think outside the box, studying companies in different industries could prove to be a great option. Learn how competitive intelligence can help you drive business growth by requesting a free brochure.