The Beauty of Benchmarking
Benchmarking is an extremely effective tool, and you are probably already using it in one form or another.
From a business perspective, benchmarking the practice of investigating and analyzing your competition to understand what they are doing and to build from that learning to plan your own strategy.
From a marketing perspective, we drill down a bit further and try to understand all of the influences that are competing for our clients and prospective customers’ mindshare.
So benchmarking is not copying or stealing others ideas. It’s simply the intelligent approach to learning from what has been done and what seems to be working within a given marketplace. Then it means taking that learning and developing your own strategy to carve out your own piece of the market.
Here are some great benchmarking exercises.
1. Who are your 3-5 closest competitors?
• What are they doing right? Do they have a strong brand identity? Is their Unique Selling Proposition (USP) clear?
• What could they be doing better? Is their website lacking? Is their logo or tagline weak or dated?
• What can you learn from their efforts and put into practice for your business, but with your own unique spin? While imitation is the sincerest form of flattery, you don’t want to flat-out copy your competition. Instead, you should take a concept and rebuild it to support your own brand identity and USP.
• Where can you leverage the efforts of these competitors to promote your own message? A restaurant on a corner often will experience a clear boost in business when one or two more restaurants or bars open on the other corners at that intersection. This creates a destination for diners. Think in terms of your competitors creating a “destination” or a “market” for the service or product you sell.
2. What are some other direct and indirect factors competing for your audience mindshare?
• For a web-based business, a brick and mortar store would be in direct competition for your audience, but only in a limited geographical area.
• If you offer pet walking, pet sitting and skilled pet training, then an indirect competitor might be a popular dog training course that is being heavily promoted by Amazon. This course is indirect because your customers probably buy from you because they want the personal attention they can’t get from a DVD, CD or book.
• If you offer a line of premium, organic diet food and personalized consultation, you might consider Weight Watchers to be an indirect competitor. Again, this is indirect competition because your USP is a personal, premium service that a standardized national program like Weight Watchers can’t provide.
3. Use the power of the Internet to benchmark both direct and indirect competitors
• Try Googling each of your competitors’ brand names and see what comes up. How many pages of their websites has Google cached? What types of content is displayed? Blog entries? Articles? Press Releases? Directories that you have never heard of? Local search results?
• Run their websites through free online tools like Alexa (http://www.alexa.com), SpyFu (http://www.spyfu.com) and check their Google Page Rank (add this button to your Google Toolbar on any Internet browser you use). These tools will tell you if your competitors are using Pay Per Click (PPC) advertising, what keywords are driving traffic to their sites, and lots more.
• Setup Google Alerts (http://www.google.com/alerts) for each of your competitors.
4. Stay up to date on whatever industry data you can get a hold of, whether from an industry organization or through analysts and journalists covering your area.
These exercises are just a few of the steps you should take to benchmark your competition and industry segment. But even if you just undertake one or two of these, you’ll be getting closer to understanding how to more efficiently reach and retain your customers.
Make it a practice to allocate an hour each week, or 20 minutes each day, for one or more of these benchmarking exercises. The beauty of benchmarking is that you’re likely to glean something useful every time: a new perspective; something your competitors are doing differently; an opportunity you hadn’t been aware of.
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