Evaluating your competitors can be more beneficial than you might think. Looking at the competition is a chance to not only gather inspiration for your own business strategies, but pinpoint opportunities to differentiate and expand your business too.
Competitor benchmarking tools are software solutions which examine your competitors’ results related to specific KPIs and metrics. These tools can show you how effective other companies are at promoting their business to consumers, or driving traffic with content.
There are a number of different benchmarking tools available online today, each offering their own distinct range of benefits. Today, we’re going to look at some of the most important factors you should look at in a competitor benchmarking tool.
What Is Competitive Benchmarking?
Competitive benchmarking is the process of collecting critical data about your competitors’ apps, websites, and other assets. You can then use this data to uncover marketing and sales opportunities, determine which of your business strategies aren’t performing as they should, or look for areas of potential for market growth.
While most business leaders are well-aware of the importance of tracking their own company’s performance metrics, they forget about the value of looking into their competitors.
Google Analytics and similar tools can provide you with complete visibility into your site’s performance, while sales metrics assist with gauging revenue growth. However, your own metrics only allow you to examine your company’s performance in a vacuum.
While you might think a growth rate of 10% per year for your sales is excellent, you may actually be underperforming and missing out on opportunities compared to your competition. Viewing your data in context is an important part of understanding your strengths, weaknesses, opportunities, and threats in any given market.
Why Is Competitor Benchmarking Important?
Competitor benchmarking helps you to see your business as it stands in relation to other companies targeting similar customers. You can use a benchmarking tool to.
- Detect industry trends: Competitive benchmarking allows you to see changes in customer interests and potential patterns driving your customers’ purchasing behaviors.
- Understand your potential: Your benchmarking session shows you how much you can potentially grow, and where your most valuable opportunities are for improvement.
- Evaluate your market strategy: Monitoring your performance in relation to your competitors can help you to see where you’re missing the mark.
Of course, you can only truly discover the benefits of competitive benchmarking if you’re using the right tools. That’s why it’s so important to make sure your software offers the correct features.
As mentioned above, there are many different types of competitive ranking tools on the market. Some focus exclusively on things like SEO and traffic, while others will help you to understand how well your company is performing in terms of sales.
No matter what your competitor analysis strategy entails, the following three capabilities will ensure you’re making better business decisions in the long-term.
Activity and Engagement Insights
Engagement is easily one of the most important things a company can pursue in today’s landscape. The more engaged a community is with a company, the more likely it is that business will benefit from conversions, brand advocacy, and growth. A competitor benchmarking tool should help you to understand exactly how customers are interacting with the business.
For instance, your system might include an evaluation of how long customers spend on a certain page, to help you see which kinds of content your clients find most appealing. You can look at metrics like bounce rates, to see which pages are more likely to drive customers away from a website. This can help you to create more relevant content for your target audience.
Even insights into how many pages a customer looks at per visit, or how they engage with that page (such as clicking on a link or completing a form) can offer insights into how you can improve your conversion efforts.
Audience data is crucial to competitor benchmarking, because it can help you to understand how closely your target audience and the target audiences of your competitors are linked.
You can use knowledge about the traffic on another company’s website to determine whether your own content is reaching out to people from the right demographic or geographical groups.
Audience data can also help you to pinpoint potential market groups you may not be targeting yet. If certain pages on a company’s website are appealing to a type of customer you haven’t considered, you can look into whether you might benefit from expanding your own marketing net.
Keyword and Traffic Information
Finally, keyword data is a common component of many benchmarking tools, but that doesn’t make it any less important. Keyword data will show you what kind of phrases are being indexed for competing companies. This will help you to determine whether you’re targeting the correct keywords for your own marketing strategies.
Traffic information, like whether the largest percentage of people visiting a page on a website come from organic or paid sources, will show you what kind of strategies drive the best results when you’re trying to attract new fans and customers for your website.
You can even use traffic and keyword information, combined with audience data, to determine whether certain pages might be a good place to request a backlink from other companies who aren’t direct competitors of your brand.
Choose the Right Benchmarking Tools
Benchmarking is a valuable way to view the success of your business in the context of your chosen market. However, like any critical technology for your business, your benchmarking software will only deliver the right results with access to the correct features. Ensure your benchmarking solution has at least the three features mentioned above to get the best results.