How to Benchmark Your Closest Competitors And Grow
In our previous article about competitive comparison, we talked about the importance of focusing on close competitors, how to identify close competitors, and a basic approach to studying competitors. In this article, we’re going more in-depth on items to study as well as tools available to make benchmarking easier.
General Benchmarks and Competitive Comparison
Expanding on what we wrote in our last article about competitive comparison, it’s always important to focus on what your competitors do well. However, beyond that, you also want to pay attention to the “five P’s”:
- Price – What are they charging for similar products?
- Product – What are they offering in terms of fitment, add-ons or “extras”, as well as the product type
- Promotion – What sorts of promotions are they running? Are they repeating the same promotions over and over (a sign that the promotion works well), or are they trying lots of different promos (a sign nothing is working)
- Placement – Where are they trying to “place” their products, in terms of advertisements, media/press mentions, sponsorships and events, etc?
- Positioning – How are they positioning their products? Do they have a premium line? An extra-affordable line? Are they emphasizing customer service, fast shipping, easy returns, freebies, or something else? How are they choosing to market specific brands – are they emphasizing performance, value, or something else?
These are “general” benchmarks because they’re very much subject to interpretation. For that reason, it’s a great idea to get opinions about your competition from staff, vendors, and customers. It’s also a good idea to work with an experienced marketing person, as they can often identify details that people without experience will miss.
Specific Benchmarks to Compare
One of the smartest things you can do to track your company relative to your competitors is to pay attention to a group of metrics over time. If, for example, you can measure your social media fan base growth relative to key competitors over a specific time period, you can determine how effective your social media marketing has been.
While the value of this comparison will change from one company to the next (for many companies, social media isn’t an important marketing channel), it can help “paint a picture” of the marketplace over time. Here are some metrics that are easy – and potentially useful – to track:
- Facebook page activity and growth, which can be done week to week with Facebook’s built-in “Pages to Watch” tool (under page insights), and even better with FanpageKarma.com (free reports are available). At the very least, keep a tally of fans.
- Same with Twitter (use FollowerWonk ) and YouTube (use Socialblade.com)
- Top content (in terms of social media activity) by checking your competitors domains on app.buzzsumo.com (you can see the top 5 content items over the last year for free)
- Blog post frequency, which can help you determine if they have a content strategy
- Email marketing frequency (how often are they sending out coupons and newsletters)
- Website traffic estimates from Quantcast.com and Alexa.com (emphasis on estimate…don’t look at the traffic figures as trustworthy, just look at changes over time)
- Link metrics, which can help you keep track of a competitor’s efforts to boost their search engine rankings. Moz.com has a great free tool that will tell you about the number of inbound links, spam score, etc., only you probably just want to pay attention to changes in domain authority over time (increasing authority is good, decreasing is bad)
In terms of tracking these metrics, a simple spreadsheet is all you need. Create a column for each metric, create a row for each competitor, and then update the spreadsheet over time. Every time you update, you can keep a copy of the old version to refer back to.
For most companies, tracking these metrics on a quarterly basis is more than sufficient.
Applying These Benchmarks to Your Marketing Plan
Periodic reviews of all benchmarks – as well as your company’s marketing strategy – are always a good idea. If, for example, you notice a competitor has seen a big jump in Facebook page likes over the last 6 months, you can look back at their posts and see if there was one that led to the jump. If not, you might start looking at some of the other tools mentioned to see if you can figure out what happened.
While you wouldn’t want to copy whatever your competitor did to increase their page fan count (at least not exactly), their success should absolutely influence your strategy. Likewise, if you see a competitor with a Facebook fan page count that’s stagnant or shrinking, you should make sure your Facebook strategy is different than theirs.
But this isn’t just about Facebook – this is about all the metrics. Pay attention to what your competitors are doing – and what they’re doing well – so that you can learn from their success.
Finally, it’s important to understand that benchmarking your competition is only a small portion of a complete marketing plan. Too many companies react and respond to whatever their competitors are doing, which inevitably leads to mediocrity. Success requires you to focus on your products and your customers – competitors should only influence your plan, not dictate it.
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