What, Why and How to Do Competitive Benchmarking

Competitive benchmarking is a well-established business tool for understanding a market. However, it offers opportunities to us as digital professionals too.

Let me start by saying that I am not a fan of focusing overly on what your competition is doing. Admittedly that is a bizarre way to start a post about competitive benchmarking, but it is a point worth making.

As I work with organisations helping them improve their digital presence, all too often they fixate on what their competition is doing. Unfortunately, this rarely leads to good results.

For a start, it presumes that the competition is more competent and capable than you are, which is rarely true. Secondly, if you focus on emulating your competitors, then you are always one step behind them.

I am not saying reviewing the competition is pointless. We just need to do so in a way that is focused on benchmarking ourselves, not emulating others. That is where competitive benchmarking comes in.

However, before I dive into the benefits of competitive benchmarking, let’s first take a step back and ask, what is it?

What Is Competitive Benchmarking Analysis?

When organisations undertake competitive analysis online, it is a more qualitative approach. They look at the website, social media channels, etc. of their competitors and look to glean as much information as possible.

The emphasis is on trying to learn what they do well and avoiding what they do poorly.

Some even choose to do usability testing on competitor websites as a way of avoiding the usability mistakes they make.

These are all valid approaches and ones I use. However, these approaches do introduce the danger of blindly copying what competitors have done, without understanding why it has worked.

By contrast, competitive benchmarking doesn’t seek to learn from competitors in the same way. Instead, it is a method of comparing the performance of your competitors with each other and you.

While a competitor review is about qualitative observations, competitive benchmarking is about gathering quantitive data for comparison.

But, why would you want to do that, if you aren’t going to learn from what the competitors are doing online?

Why is Competitor Benchmarking Important?

Although competitive benchmarking doesn’t provide the depth of insights that you would get from the competitor analysis, it has other benefits a review does not have.

Competitive benchmarking allows comparisons over time

A competitive review may give you insights into what your competitors are doing today, but they are a lot of work to repeat regularly. By contrast, you can run competitor benchmarking often, because they tend to be more lightweight.

Also, because it is quantitive, it means you can make comparisons over time. Together these two characteristics (straightforward to measure and quantitive results) enables you to build up a picture of how much competitors are investing online over time. You can see if they are improving or falling behind.

Do you need help implementing a competitive benchmarking system or somebody to run it for you regularly? Feel free to contact me.

Competitor benchmarking allows direct comparisons

As well as comparing a competitor to itself over time, you can also compare them to each other. That enables you to get a sense of the market as a whole.

Most crucially of all competitive benchmarking allows you to measure your digital efforts against those of the competition. That is where competitor benchmarking shines. You have hard data to judge whether all your hard work is paying off.

Competitive Benchmarking provides a frame of reference

But it goes further than that. Let’s imagine for a moment that you ran a survey asking people to rate the usability of your website (maybe something like the system usability scale). Now let’s say you scored 72%. Is that good? Is it bad? How do you know?

You would know whether you had improved or not (presuming you had run the same survey before), but if you had the same data on your competitors, it allows you to put your score in context. For example, if the majority of your competitors were getting scores in the forties, then you could focus your attention elsewhere.

Hopefully, you can now see why it is worth considering doing a competitive benchmarking analysis, but what goes into one?

What Does Competitive Benchmarking Focus On?

The scope of your competitive benchmarking is entirely up to you. However, for it to have value, it needs to be consistent over time. That means you have to consider not only what you want to know today, but what you might want to know in the future.

That fact makes it very tempting to cast the net wide and review everything from accessibility and usability through to personalisation, performance and device compatibility.

However, there is a consequence to that. Going wide means one of two things. Either you will have to put considerable effort into the analysis each time you benchmark, or your benchmarking will be relatively superficial.

Put another way; you can have two of the following:

  • Breath of insights.
  • Depth of insights.
  • Ease of benchmarking.

That said, in most cases, I still advise to go broad and sacrifice depth in favour of ease of analysis.

For me, competitive benchmarking is about getting a view of the competitive landscape over time. If I want a more detailed analysis of competitors, I will use a competitive review instead.

With that in mind, I usually review websites using four broad categories.

  • Accessibility. Can people find the site and then access it on their device of choice?
  • Relevance. Does the site address user questions and provide them with the information they need?
  • Usability. Can people find the information they require and complete tasks successfully?
  • Engagement. Does the site hold the user’s attention and elicit the right emotions in them?

If I am looking at other digital channels as well, I may adjust that slightly depending on the mix, but the basic principle is the same.

Once I have agreed on the categories with any stakeholders, I can dive into performing the review.

Competitive Benchmarking Example
Because competitors are being graded against a scale it is to make comparisons.

How Do You Perform Benchmarking?

The first step in performing a competitive benchmarking analysis is to decide on the individual criteria within each category and the scale by which I am marking those categories.

If I decide to go with the four categories above, I tend to have five criteria within each group and then rate each scale from one to five. That gives me a score out of one hundred for each site.

Although the categories and criteria are entirely up to you, here is the competitive benchmarking template I often use.

Accessibility

  • Search Engine Visibility
  • Site Speed
  • Device Support
  • Readability
  • Disabled Access

Relevance

  • Addressing User Questions
  • Appropriate Tone for Users
  • Appropriate for the Web
  • Homepage Relevance
  • Value Provided to User

Usability

  • Conforming to User Expectations
  • Ease of Critical Tasks
  • Error Handling Search Usability
  • Site Structure

Engagement

  • Clear calls to action
  • Back Links
  • Social Media Profile
  • Use of Media
  • Quality of Design

How to Ensure Consistent Benchmarking

The next challenge is ensuring that the way you grade criteria is consistent over time and across websites.

Some criteria can be measured objectively — for example, the number of backlinks or the performance of a site. There are tools out there that allow you to measure that consistently.

Backlink checking tool.
Some criteria like backlinks can be checked with automated tools.

However, other criteria are going to require a judgement call such as “does the site address user questions“.

I’ll be honest; I am yet to find a perfect way of measuring these. The variations will inevitably happen. It is really about deciding on what degree of difference you can tolerate.

The problem is less acute when one individual will always be responsible for measuring all of the websites. However, that is rarely the case.

When it is not, I advise on describing what each rank looks like for the various criteria. For example, if you had one for “clear calls to action”, your five rankings might be:

  • Rank 5: The primary call to action was compelling and clearly placed on every page of the website.
  • Rank 4: The primary call to action was clearly placed on critical pages of the site but wasn’t particularly compelling.
  • Rank 3: The primary call to action was found on a critical page, but position and how compelling it is could be improved.
  • Rank 2: The primary call to action appeared on only some pages and was not particularly compelling.
  • Rank 1: There was no prominent call to action.

However, even then, a judgement call is required. For example, what does it mean to say a call to action is “compelling” or not?

What defining ranking does provide is a much clearer decision-making structure, which will allow you to assess sites faster.

In my experience, speed is a critical factor in benchmarking. If it takes too long to benchmark competitors, it either doesn’t happen at all, or it only happens once or twice. To get the most from competitive benchmarking, it needs to occur at least annually.

Competitive Benchmarking Is Great if Used Wisely

Competitive benchmarking can be a two-edged sword. It can be a great indicator of progress and position in the marketplace. However, there is also a danger the organisation starts to obsess over the metrics.

I have seen too many management teams focus more on improving rankings than the experience that underpins them. That is a mistake they seem to make with almost any form of quantitive data.

That said, if everybody understands that competitive benchmarking is a guide to performance and not an infallible metric, then it is another valuable weapon in our arsenal.

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