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Have you ever heard that the grass is always greener on the other side? Well then. If in social life we tend to “pay attention to others”, it would be no different at work. Benchmarking is a valuable tool, as it is a process that aims to evaluate the competition.
How about we delve deeper into this subject (and also into the neighbor's grass)? See the importance of this in this article.
What is benchmarking?
If you don't know where you're going, you won't get anywhere. This has probably already been written here on the blog somewhere and when we talk about benchmarking we are talking about knowing where to go.
Benchmarking is a practice that aims to research companies in the same sector, with the aim of analyzing whether your company's performance matches that of these companies. From the English “benchmark”, which means reference, it is an essential management tool for improving processes, products and services.
In digital marketing this becomes more evident, as analysis can be done more quickly and feedback is much faster. It is possible, due to the characteristics of digital, to make adjustments more quickly.
Thus, benchmarking, as a reference point, helps to identify KPI's (key performance indicators) which are important for the sector, which allows for better assessment to correct course.
How important is benchmarking?
Firstly, it is important to keep in mind that benchmarking is essential and is a form of comparison. But it is not enough to apply the same strategies as other companies, if they cannot be applied to yours, either due to the current situation in which your company lives, or through investments, etc. Furthermore, some competitors may be doing it wrong.
This first point is already important, as a market analysis can show paths not to take. On the other hand, analyzing companies that are doing well can indicate ways of working. Benchmarking allows the company to “think outside the box”, seeking business excellence in competitiveness.
Other points may be important:
- Have more market knowledge;
- Open new fronts that your company had not imagined;
- Learn from the mistakes of companies with more experience;
- Improve processes and practices to get closer to more well-established companies;
- Understand which projects can be applied or even improved;
- Show the team what goals can be achieved, as your competitors may have already gotten there.
In the digital market, some points are very important in what we call digital benchmarking. Understanding a sales funnel and its conversion rates, for example. How much does a competitor pay for a click or how much they invest in paid media (some tools, such as SimilarWeb allow you to evaluate how much paid traffic a given website has).
Therefore, it is important to separate the wheat from the chaff. But it will always be positive to analyze the market and competitors.
How to benchmark
The web allows us to carry out direct research into what is happening in the market. Thus, you can have as a starting point the simple analysis of the digital presence of competitors, visiting the website, analyzing blog, social media and doing keyword research in your market.
As mentioned above, some tools play a great role in benchmarking analysis. Another of them is the Results Digital Sales Funnel Benchmarking, where you can buy metrics for your segment. If you send marketing emails, you can also use another company tool, the Email Marketing Metrics Benchmarking.
Other very interesting tools are the WooRank and the SEOQuake, which also evaluate the technical part of a website and can be used to identify good practices from the competition.
There are other ways, such as participating in industry events, where everyone is in the same place, face-to-face visits (not necessarily at a competitor) and even mentoring.
Types of benchmarking
There are five most common types of benchmarking:
Internal benchmarking: aims to seek improvements within the company and branches, if they have them;
Competitive Benchmarking: The objective here is an analysis of competitors, aiming to surpass them. This can be done at some points, as much internal information that could be necessary will be difficult to find;
Cooperative benchmarking: Companies in the same segment, but which are not direct competitors, can share information with the aim of improving their performance. Larger companies can also open doors to others looking for inspiration, as happens in Silicon Valley, for example, when visiting large companies in the technology sector;
Functional benchmarking: In this case, companies that are not necessarily from the same segment can be compared in relation to financial management, for example.
Generic benchmarking: the company can look for another that has similar processes, but that is not necessarily in the same segment. Comparison can help restructure areas that have similar characteristics.
Did you like this content? How about hiring Vero Contents to analyze your digital presence and your competitors? It's just speak to an expert!
Marcel Castilho is a specialist in digital marketing, neuromarketing, neuroscience, mindfulness and positive psychology. In addition to being an advertiser, he also has a Master's degree in Neurolinguistic Programming. He is the founder and owner of Vero Comunicação and also the digital agency Vero Contents.
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