What is Competitive Benchmarking?
Competitive benchmarking is the strategy of comparing the products, public relations and other characteristics of a particular company with those of a competitor. This type of comparison is something that many individuals and businesses conduct, either as a means of creating plans to compete more effectively in the marketplace, or to secure goods and services from the most reliable vendor, and at the best price possible. Because circumstances can change over time, the process of competitive benchmarking is ongoing, and can never be considered completed.
With companies that want to capture a larger share of the consumer market, competitive benchmarking is essential to understanding how the current product line compares to similar products offered by other companies. The idea is to compare those products based on several factors, including price, quality, and range of use. By making comparisons of this type, it is possible to identify where the current product line offers a benefit that is not offered by the competition, or possibly identify some consumer need that is not being met by any of the products currently on the market. Financial stability, leadership, and general personnel policies may also be points of comparison. The data that is collected can be used to create marketing campaigns that call attention to the product's unique benefits, or even to create some sort of value add to the product line as a means of distinguishing it from the competition.
For individuals or companies that are seeking vendors for different goods or services, the process of competitive benchmarking involves comparing what two or more potential providers offer. As with most business deals, pricing is an important point of comparison. Along with the cost, comparing the quality of each product, assessing the customer support offered by each supplier, and determining who offers the best in the way of service delivery are also key to the process. In many instances, the technology used by the suppliers to provide the desired goods or services will also come under close scrutiny. Ultimately, one potential vendor will emerge as the logical choice, and a working relationship between the customer and the selected vendor can be established.
The process of competitive benchmarking does not end once the first round of comparison has taken place. Many businesses continue to utilize this basic concept as a means of determining what may have changed since the last comparison took place. The ongoing comparison may be very structured and formal, or be conducted in a more casual and informal manner.
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