Competitive Benchmarking to Outperform Your Competitors Analysis Tools & Examples for Success

Competitive Benchmarking to Outperform Your Competitors: Analysis, Tools, & Examples for Success

Competitive benchmarking is all about comparing your business performance, products, or services against your competitors.  In short, it's like

Competitive benchmarking is all about comparing your business performance, products, or services against your competitors.

In short, it’s like a performance check-up in the market.

Business benchmarking enables you to learn from others’ successes and failures. 

Brands need to stay relevant, competitive, and thriving.

So, they choose to benchmark against competitors to discover areas for improvement.

In fact, 90% of Fortune 500 Companies have already invested in competitive intelligence to maintain an edge in the industry.

It’s currently 2024 and the company landscape is expanding.

Whether you’re a business owner or a growth marketer, it’s 100% certain you need to master the art of industry benchmarking.

This blog post goes deeper into the what, why, and how of competitive benchmarking. 

So, read below to get a full competitive benchmarking analysis, including benefits, examples, and tool suggestions.

What is Competitive Benchmarking?

Competitive benchmarking is a strategic process that businesses use to evaluate their performance compared to competitors within the same industry.

It involves analyzing various aspects of rival companies, like operations, products, and strategies to identify strengths, weaknesses, opportunities, and threats. 

This helps them gain knowledge of market trends, customer preferences, and effective industry practices.

However competitive benchmarking is different from any other type of benchmarking, such as internal or functional benchmarking.

And what sets it apart is its focus on direct comparison with competitors.

Most people also confuse benchmarking competitors with performing a competitor analysis. But they’re not the same!

What is the difference between competitive analysis and competitive benchmarking? 

On one hand, competitor analysis is simply studying rival businesses to understand their strategies and market positioning.

On the other hand, competitive benchmarking goes a step further by systematically measuring and comparing your performance against those rivals.

The last part involves being familiar with competitive benchmarking metrics.

Right now, businesses tend to combine competitor analysis and benchmarking as parts of a combined strategic plan.

The goal is to merge data-focused analytics and real-example comparisons to come up with actionable insights.

The actual objective isn’t necessarily beating the other company, of course.

It’s about using their performance data and several benchmarking metrics to become better.

By benchmarking against industry leaders or successful peers, companies can set realistic performance goals and track progress over time.

Additionally, competitive benchmarking helps decision-making in various areas, such as product development, pricing, and marketing strategies.

Benefits of Competitive Benchmarking

Here are the top 3 use cases of competition benchmarking.

1. Enhancing competitive intelligence

Companies don’t succeed on guts and feelings.

Business owners need to base every move on data and strategic planning.

Competitor benchmarking in business empowers teams with comprehensive insights into market dynamics and competitor strategies.

If you’re a marketer, benchmark data to gain a deeper understanding of industry trends and emerging threats. Then, adapt your actions accordingly.

Remember to seize opportunities but only after reducing any risk factors.

2. Driving performance improvements

Benchmark with competitors to streamline your business performance by identifying opportunities to improve in various areas.

This proactive approach ensures that brands stay relevant and maintain a competitive edge, based on what’s working for others.

For instance, by understanding exactly what’s trending right now, companies can develop targeted strategies to improve brand awareness and visibility.

3. Identifying industry best practices

Discovering what practices are the top option for your industry at any time isn’t a piece of cake.

An easy way to drive efficiency is to observe what the rest of your market is doing right now.

By learning from competitors’ successes and failures, companies can work to position themselves as leaders in their industries.

Types of Competitive Benchmarking

Let’s see what each type of competitor benchmarking is all about.

An infographic describing  the Types of Competitive Benchmarking

1. Product Benchmarking

Product benchmarking involves comparing the features, quality, and performance of your products against those of your competitors. 

In reality, product analysis mostly focuses on helping product design teams.

Designers and marketing executives benchmark competitors to understand where their products excel and where they need improvements.

This process allows companies to stay on top of the market and ensure their products meet or exceed customer expectations.

Imagine you have a project management SaaS product. Through product benchmarking, you might compare your features (task management, team collaboration, reporting) to leading competitors.

You’d also assess user reviews to understand how your product stacks up in terms of ease of use, customer support, and integrations with other popular tools.

This process allows product designers and marketing executives to understand where your product excels (e.g., intuitive interface) and where it needs improvements (e.g., limited mobile functionality).

2. Service Benchmarking

Service benchmarking is pretty much similar to product benchmarking; but instead of focusing on features, you’re comparing the quality and effectiveness of the services you provide against your competitors.

This includes examining various aspects of service delivery, such as response times, customer support quality, and service customization.

You could also analyze online reviews to see how your customer support compares in terms of friendliness, efficiency, and problem-solving skills.

Competitive analysis and benchmarking are a top priority for service providers, as they show you how to raise customer satisfaction.

3. Process Benchmarking

Process benchmarking is less common but equally important for companies!

It’s about analyzing and comparing internal operational processes to identify areas for improvement and streamline workflows. 

This type of competitive benchmarking focuses on efficiency, cost-effectiveness, and productivity.

Through process benchmarking, you might compare your onboarding steps (e.g., account setup, data migration, training materials) to leading competitors.

You could also analyze how quickly they get new customers up and running. This would help you identify bottlenecks in your process (e.g., lengthy manual data entry) and discover more efficient approaches competitors use.

Operational teams need to study how similar-sized competitors do the same job to discover new, innovative approaches and reduce costs.

4. Strategic Benchmarking

This one’s all about the big S; Strategy.

It focuses on long-term strategic planning and goal-setting by keeping an eye on different strategies and competitor decisions. 

Strategic benchmarking can lead you to insights into competitors’ methodological direction, market positioning, and future business goals.

Through strategic benchmarking, you might analyze how your competitors are expanding their product offerings (e.g., adding AI-powered features) or their recent partnerships with other companies.

This can provide insights into their long-term vision (e.g., becoming a one-stop shop for marketing needs) and market positioning (e.g., targeting larger enterprises).

By focusing on strategic benchmarking in business, companies identify emerging trends and can anticipate market shifts beforehand.

5. Performance Benchmarking

We mentioned performance in previous types of benchmarking, but this one centers specifically around it.

It gives your entire company a performance review.

It measures key performance indicators (KPIs) against industry standards and competitors to assess overall business performance. 

Some of these KPIs are sales growth, profitability, market share, and customer retention rates.

But we’ll dive into all of that in a bit.

6. Customer Benchmarking

Last but not least, everyone cares about customer response.

This type of competitive benchmarking evaluates customer satisfaction, loyalty, and feedback to assess the effectiveness of customer service and experience.

For example, you might analyze customer satisfaction surveys, social media sentiment, and support ticket resolution times to understand how your customer experience compares to competitors.

Customer benchmarking is super important when you start building brand loyalty.

How to Perform Competitive Benchmarking?

Here are 10 easy steps on how to do competitive benchmarking.

An infographic describing the steps to perform Competitive Benchmarking

Step 1. Define Your Benchmarking Objectives

Clearly outline the goals and objectives of your benchmarking process.

Don’t be afraid to focus on specific parts. 

A well-rounded approach isn’t always the correct path on how to do industry benchmarking; Especially if it’s your first time.

Determine what aspects of your business you want to compare with competitors and what you aim to achieve.

Step 2. Identify Your Competitors

Who are the key players in your industry?

Strategic planning requires a comprehensive identification of your competitors.

Here are two approaches to follow if you want to make this process less chaotic.

Understanding Your Market

Analyze market trends, customer preferences, and competitor strategies to gain a comprehensive understanding of your industry landscape.

Tip: Remember that the market never stops changing; Always look for new trends, new competitors, and new gaps.

Direct vs. Indirect Competitors

Don’t focus on everyone everywhere all at once.

Instead, set your priorities straight by distinguishing your competitors into direct and indirect.

Direct competitors offer similar products/services to yours.

On the contrary, indirect competitors target the same customer base with different solutions. This is also impactful for your competitive analysis strategy, but not as much as a direct competitor.

Step 3. Select Key Performance Indicators (KPIs)

The KPIs one can choose to focus on are too many.

So, select wisely the ones that are completely necessary for your growth at the point of your benchmarking.

We will explore future goals and KPIs later.

Here are some suggestions if you’re new to this.

General KPIs for Competitive Benchmarking

  • Revenue Growth Rate: Measures the percentage increase in revenue over a specific period, indicating business growth and market demand.
  • Share of Voice: Measures how visible a brand is in the market compared to competitors, focussing on influence and reach.
  • Customer Satisfaction and Loyalty Metrics: NPS (Net Promoter Score), CSAT (Customer Satisfaction), and CLV (Customer Lifetime Value) are indicators of brand loyalty and customer retention.
  • Profit Margins (Gross, Operating, Net): Profit margins evaluate the business’s profitability, reflecting its efficiency in managing costs and generating revenue.
  • Cost of Customer Acquisition (CAC): This shows how much you spent to get new customers, indicating the effectiveness of marketing and sales strategies in client attraction.
  • Employee Efficiency and Productivity: Collects data that prove how much time employees spent on tasks and how well they performed in them.
  • Brand Equity: The value brands have in the market, including brand awareness, loyalty, and perceived quality, influences consumer behavior and market positioning.
  • Website Traffic and Online Presence: Gauges the volume of website traffic and online visibility, indicating brand reach, audience engagement, and effectiveness of digital marketing efforts.
  • Innovation and Product Development: Assesses the rate and success of product development initiatives, indicating the business’s ability to innovate and adapt to market trends.

Step 4. Collect Data on Your Competitors

How do you benchmark your competitors?

Industry leaders don’t collect data manually, of course.

Instead, they turn to social listening tools to start spying on competitors.

An intelligent tool like Mentionlytics can help you benchmark with competitors in a few minutes.

How to do competitive benchmarking with Mentionlytics

With features like Share of Voice reporting and sentiment analysis, you can benchmark against competitor products, performance, and customer satisfaction.

Step 5. Analyze Competitor Performance

When you collect your data, examine it to identify strengths, weaknesses, and emerging trends in competitor performances.

AI-powered tools provide valuable insights and analytics into market dynamics and competitor strategies, guiding strategic decision-making.

Step 6. Compare Your Performance Against Competitors

After completing an initial competitor analysis, start comparing your numbers to those of your rivals.

Find out where you’re better and make sure you really understand why to keep the momentum going.

Step 7. Identify Performance Gaps

It’s unrealistic to expect to perform better in every aspect.

Pinpoint specific areas where your business lags behind competitors. 

Identifying performance gaps is crucial to start working towards improvement, but take a second to realize what’s going wrong.

Run internal business tests, ask company team leaders, and erase external factors. 

For example, you might discover that while your product boasts a user-friendly interface, customer reviews consistently mention limited mobile functionality compared to the competitor’s offering.

Additionally, sales data might reveal slower customer acquisition compared to the market average.

Step 8. Develop Strategies for Improvement

Are you sure you understand why your data didn’t meet the numbers of other businesses in your competitor benchmarking?

Good! Now, start crafting actionable strategies to enhance performance and gain a competitive edge.

These strategies may include product enhancements, marketing initiatives, or operational improvements aimed at addressing weaknesses and capitalizing on strengths.

Step 9. Implement Changes and Monitor Progress

Competition benchmarking doesn’t stop when you start changing your actions.

Tracking progress allows businesses to assess the impact of implemented changes and make adjustments as needed to ensure continuous improvement.

That’s the only path to long-term success.

Step 10. Repeat the Benchmarking Process Regularly

Competitive benchmarking is an ongoing process.

Regularly revisit objectives, collect updated data, and repeat the benchmarking process to maintain competitiveness in the market. 

After the first time, it’ll be easier for you to shake up benchmarking goals and look at other competitors.

Performing Competitive Analysis on Social Media

Social media plays an important role in competitive benchmarking by providing knowledge of competitor performances, customer interactions, and market trends.

Through social listening, businesses can monitor competitor activities, track social mentions, and analyze audience sentiment to gain competitive insights.

Social listening tools allow businesses to understand customer preferences, refine their social media strategy, and stay ahead in the industry.

For example, Mentionlytics lets you create mention trackers for your competitors. 

Start finding out everything about your competition;

  • Which of their marketing campaigns scores the best when it comes to engagement?
  • What’s the general sentiment of their social media audience?
  • Who are their top social media leads?

After getting a good glimpse of your competitor’s social media presence, it’s time to compare it to yours.

In fact, you can group all your competitors to make the final benchmarking process easier.

Measure your own performance on all social media platforms and then benchmark against competitors individually for each social media channel.

Use the right social media KPIs to determine what platforms you need to focus your improvement strategies on.

Here’s a list of what you need to keep an eye on.

Social Media Competitor Analysis KPIs

  • Followers Count: Indicates the number of users subscribed to a social media account.
  • Engagement Rate: Measures user interaction with content through engagement metrics, such as likes, comments, and shares.
  • Share of Voice: Reflects a brand’s presence and visibility compared to major competitors on social media channels.
  • Content Virality Rate: Measures the extent to which content spreads organically across social media platforms.
  • Audience Growth Rate: Tracks the rate at which a brand’s social media audience is expanding in a specific timeframe.
  • Brand Mention Volume: Quantifies the frequency of brand mentions across social media channels and shows if your brand is relevant.
  • Sentiment Analysis: Evaluates the overall sentiment, opinion, or attitude expressed towards a brand on social media.
  • Influencer Engagement and Reach: Measures the effectiveness of influencer collaborations in engaging and reaching target audiences.
  • Conversion Rate from Social Media: Tracks the percentage of social media users who take desired actions, like buying products or signing up for a newsletter.

Competitive Benchmarking Examples

Let’s look at benchmarking against competitors using Mentionlytics.

Here’s a quick example of Klarna and its competitor, Sezzle.

How to do competitive benchmarking with Mentionlytics - Share Of Voice feature

Using the Share of Voice feature, Klarna can benchmark Sezzle in 3 competitive benchmarking metrics: Mentions, Reach, and Social Engagement.

After choosing to focus on social engagement, Klarna is clearly in the lead for most days of the month.

How to do competitive benchmarking with Mentionlytics - Keyword cloud feature

So, after searching for what types of posts created the biggest buzz around their brand name, the answer is simple.

TikTok creators seem to have been mentioning Klarna a lot these days while creating organic engagement.

That’s good to know, so next month they can focus on TikTok influencers, possibly to connect and create valuable content.

They can perform the same quick search for Sezzle’s higher engagement days.

They will mostly find branded YouTube videos that seem to be working well for the company’s image.

So, after careful consideration, they might end up capitalizing on YouTube content creation to check out the benefits next time!

Competitive Benchmarking Tools

Here are the top online tools for competitive benchmarking analysis:

  • Mentionlytics

In short, Mentionlytics is an all-in-one web and social media monitoring platform and a leader in the brand reputation industry.

Numerous marketers, agencies, and brands have chosen the easy-to-use app’s AI-powered software for detailed analytics, actionable insights, and competitive benchmarking.

Some cool features include: 

  • Customizable Reporting
  • Social Intelligence Advisor (SIA)
  • Influencer Identification
  • Team Collaboration and Alerts

Pricing starts at $69/month.

  • SEMrush

SEMrush is a comprehensive competitive benchmarking tool that provides valuable knowledge of competitor strategies, keywords, and backlink profiles.

Apart from competitive analysis insights into competitor marketing efforts, traffic sources, and ad campaigns, SEMrush offers features, like:

  • Keyword Research
  • Link Building
  • Local SEO
  • Rank Tracking

Pricing starts at $129.95/month.

  • SimilarWeb

SimilarWeb is an all-in-one digital intelligence platform that empowers businesses with insights into competitors’ web traffic and performance.

Apart from focusing on competitive analysis and industry benchmarking, the platform offers solutions in sales, stock, and shopper intelligence.

Key features of SimilarWeb include:

  • Market & Company Research
  • Ad Intelligence & PPC
  • Audience Analysis
  • Keyword Research

Pricing starts at $149/month

Conclusion

In general, competitive benchmarking is a complex process that requires careful analysis and strategic planning.

However, the benefits of the work are undeniable, offering businesses valuable insights that can be turned into action.

It’s not easy to do all of that and drive results.

Leveraging social listening tools, such as Mentionlytics, proves to be the most effective assistance for successful competitive benchmarking.

Do you want to stay ahead in your industry?

Then sign up for a free trial and start benchmarking against competitors right away! 

Nicolas Braoulias

About Nicolas Braoulias

Passionate about social media and communication, Nicolas is a junior content writer at Mentionlytics. His interests include writing & editing, pop culture, and graphic design.