You need benchmarking because it isn’t enough just to know what your own sales figures are, or that the average battery life on your product is 11 hours before recharging is required, or the fact that 95% of your customer support calls are resolved within 8 hours. In an ever increasingly competitive world, you need to know what the expectations of your customers are, how you rank against this and also how your competitors rate – if their figures show that their average battery life is 22 hours, and 99.5% of customer support calls are resolved within 6 hours who looks the more attractive to the potential customer?
Benchmarking is the process of comparing factors such as cost, quality, product features and functionality, scope, service, response and availability of your offering against competitors in the same market – whether that be geographic or industry sector. By creating a comparative matrix of your competitors’ product or service offerings you have the beginnings of a business case to make any necessary improvements and develop an optimum offering.
As with most other elements of a market analysis study, benchmarking will include both secondary and primary research methodologies.
Benchmarking yourself not only against competitors but also against companies of a similar standing to yours in other industries will provide you with additional valuable insight.
A note of caution – speaking with competitor personnel or with personnel from companies in other industries must be handled sensitively and it is recommended this benchmarking stage of an analysis project be conducted by highly trained and experienced analysts and interviewers.