AI-based algorithms and other sophisticated tools provide you with an immense amount of data about your website’s performance. You can follow customer journeys, customize offers, gauge products’ success or failure, measure traffic and session times, and much more. While all this data enables you to grasp many of your strengths and weaknesses, it only provides insights about your own performance over time.
In order to understand how your brand is truly faring in the competitive world of online retail, you must gauge your products’ performance in comparison to others. Competitive benchmarking is a highly productive process used to compare your enterprise’s performance to that of competitors based on set parameters.
What is Competitive Product Benchmarking?
Competitive product benchmarking is a strategic process that involves evaluating and comparing your products or services against those offered by your competitors. The goal is to identify your strengths and weaknesses relative to your rivals, understand industry standards, and uncover potential areas for innovation and differentiation. This process provides valuable insights into how your products are performing in the market and enables you to make data-driven decisions to enhance their competitiveness.
Useful Tips on How to Perform Competitive Benchmarking
Step 1: Define your competitors
If you are interested in comparing yourself to your closest competitors, focus on the performance of companies similar to your own in terms of scope and products. Study your competitors closely: Follow their SEO performance and see which of their products are failing. Boost your own SEO to pick up their lost traffic. Take note of their product reviews and conduct your own benchmarking surveys to attain actionable insights into ways to boost your own products.
If your aim is to truly stand out in your industry, study the most successful international brands that sell products similar to your own. Analyze their marketing strategies, pricing tactics and promotional campaigns to discover how they make their brand so popular. Use competitive benchmarking analysis to find effective ways to boost your own name.
You might be in indirect competition with companies that sell products similar to your own but serve a different audience. In these cases, there is a certain amount of overlap which could cause your target audience to shift to your competitors’ offering. For example, if your company sells hard copies of books but another sells audio books, they are still competitors although their product is different and they appeal to another audience. Use price benchmarking analysis to compare prices and make attractive offers.
Step 2: Learn industry best practices
What are they doing right?
Compare various product aspects vis-a-vis your competitors. What makes your competitors’ products so popular? Their design? The brand message? Special marketing campaigns? Use these insights to improve your own messaging, hone marketing strategies and develop future products.
What processes are they using?
Compare your processes to those of your competitors. How do they determine pricing? How do they decide what products to sell? What are their main sales channels? Compare your performance against external benchmarks to discern methods that can optimize your own processes. By comprehending how leading performers handle a process, you can make your own processes more efficient and more effective.
What sentiments are you arousing?
You may be offering a great product at a reasonable price while experiencing disappointing results. Use sentiment analysis as a competitive benchmark to see how your appeal compares to the competition. Does your audience feel an allegiance to your products and brand voice? How are leading competitors’ able to command empathy and emotional involvement? Study these strategies in order to learn how to generate personal interaction with your name and products.
Key Benefits of Competitive Product Benchmarking
Identifying Competitive Advantages: By benchmarking your products against the competition, you can identify areas where you outperform your rivals. Whether it’s superior features, quality, pricing, or customer service, understanding your competitive advantages allows you to leverage them to gain market share and attract more customers.
Pinpointing Improvement Opportunities: Benchmarking also helps you identify areas where your products may fall short compared to competitors. It could be in terms of functionality, design, or customer satisfaction. Recognizing these shortcomings allows you to develop strategies to address them, improve your products, and bridge the gap with your rivals.
Understanding Market Expectations: Competitive product benchmarking provides valuable insights into industry standards and customer expectations. By analyzing how your products measure up, you can gain a clear understanding of what customers value most and align your product development efforts accordingly. This enables you to deliver products that meet or exceed market expectations, enhancing customer satisfaction and loyalty.
Enhancing Innovation: Benchmarking is not just about comparing your products to those of others; it’s also an opportunity to identify innovative ideas and best practices. Analyzing your competitors’ products can inspire you to explore new features, technologies, or business models that can give you a competitive edge. This encourages a culture of continuous improvement and innovation within your organization.
To learn more about competitive product benchmarking, schedule a demo now.