Benchmarking is important to businesses of all shapes and sizes, including those in the B2B world.
Determining how your company stacks up against your competitors is crucial.
If you track your competitors correctly, you’ll be able to:
- Identify the best opportunities for your business
- Understand the main weaknesses you should work on
- Inspire yourself from best practices.
This is one of the best things you could do to you and your business: correctly track and benchmark yourself against your competitors.
This way, you’ll make better marketing decisions for your business, 100% guaranteed.
From there, there are two things to consider:
- How do you get your hands on the right data?
- And, how do you develop a more effective business strategy using this data?
Today, we will delve deep into the process of benchmarking for B2B.
We aim to help you identify competitive benchmarking metrics, set realistic goals for your business, and gain an edge over your competitors.
Ultimately, you'll be able to build an impactful marketing strategy using the right information and tools.
What is B2B benchmarking and why is it important?
B2B benchmarking refers to the process of comparing a company's business practices, processes, and performance metrics to those of other businesses in the same industry or market segment.
As we’ve said, it’s key to make sure you can stay competitive, and improve your performance and market position.
It helps you take better marketing decisions overall, instead of just guessing what might work.
I’m just going to repeat this: correctly benchmarking competitors will help you take better marketing decisions.
It involves a systematic evaluation that allows companies to identify areas for improvement and adopt best practices from industry leaders.
By analyzing competitors and top-performing companies, you can gain valuable insights to enhance yourown operations and strategic decision-making.
Good news: Panoramata can help you do this automatically.
What are the key areas of B2B benchmarking?
If done correctly, this can help you inscrease your company’s growth. Never underestimate the power of taking the right marketing decisions.
But let’s make sure we’re benchmarking correctly before, right?
Identifying and understanding the key areas of B2B benchmarking is vital for several reasons:
- It allows your business to focus your efforts on the aspects of operations that need more resource allocation
- It lets you evaluate your performance across different areas of operation and marketing channels
- It helps you develop a targeted approach to improvement
Looking at the current state of your business, what are the areas you need to focus your energy on?
Let’s review the main areas you could benchmark.
Financial Performance
Financial performance is a critical metric for B2B benchmarking as it provides insights into a company's overall health and competitiveness.
It can be measured in terms of financial indicators such as revenue growth, expenses, return on investment (ROI), and cost structure.What I love here: check your competitors pricings. Try to assess their cost structure and their margins.
This way, you can identify which kind of clients they’re likely targeting and working with.
Marketing and Sales Effectiveness
Marketing and sales effectiveness directly impacts a company's ability to attract and retain customers. It may include lead conversion rates, customer acquisition costs, and sales cycle length or the amount of time it takes for a potential customer to move through the sales funnel.
Compare these metrics with the industry benchmarks to identify areas where you need to improve your marketing strategies and sales processes. This action relates heavily to your financial performance discussed above.
Customer Satisfaction
Another correlated area that you need to keep an eye on is customer satisfaction or how well you gain and retain loyal customers.
The key metrics that measure customer satisfaction may include customer retention rate and customer lifetime value.
You have to know these numbers to identify rooms for improving your overall customer experience. You might be lacking in some aspects of your customer service, or perhaps in product quality.
Operational Efficiency
You also need to focus on how effectively you utilize your resources to produce products or deliver your services.
By evaluating metrics such as your productivity rates, and resource allocation, you can identify opportunities to streamline processes and improve the efficiency of your service.
B2B Benchmarking Process
1. Identify the main KPIs you need to benchmark
These are the specific metrics you'll use to measure performance and compare against other businesses.
Ensure that your chosen KPIs are relevant to your business goals and industry standards. This step is crucial as it forms the foundation for effective benchmarking.
For instance, if you want to focus on marketing and sales effectiveness, then you need to evaluate and work on your lead conversion rates and optimize your customer acquisition channels.
Some pro tips you might find useful:
- Once you identified the main KPIs you’d like to benchmark, immediately link them to a public competitor’s resource you could monitor.
- For instance: conversion rate. In this case, you should focus on:some text
- Check your competitors' landing pages as well as their homepage design and changes to analyze how they capture and convert leads.
- Look at the advertisements they publish across channels such as LinkedIn and Meta.
You can of course do this automatically on Panoramata.
2. Collect internal data
Once you’ve identified the public resources you’d like to track, make sure to consistently gather all relevant data.
Ensure that the data collected is accurate, up-to-date, and comprehensive enough to provide a clear picture of your current performance.
This step is crucial for establishing a baseline.
Why consistently
Because this way, you’ll be able to track what your competitors are changing/improving/deleting over time, giving you a clear picture of what’s working for them.
3. Research industry standards and competitor performance
This step involves gathering data on industry benchmarks and your competitors' performance. Utilize industry reports, market research, and publicly available financial data to gain insights.
We understand that scouting the web to get data related to your competitors' performance can be tedious and tricky. This is where benchmarking tools, such as Panoramata, can help you.
4. Analyze and compare data against your competitors
Once you have gathered all the necessary data, it's time to analyze and compare them.
This is where the process gets more exciting!
This step involves examining your internal metrics alongside industry standards and competitor performance. Look for significant differences, trends, and patterns that emerge from the data.
Pay particular attention to areas where your company excels or lags behind the benchmarks.
To facilitate this, consider using data visualization tools or creating comparative graphs. These visual aids can help highlight performance gaps and areas of excellence more clearly.
5. Identify gaps and opportunities
Based on the analysis, identify areas where your company's performance significantly differs from industry benchmarks or competitor standards.
These gaps represent potential areas for improvement. While the areas where your company outperforms the benchmarks are opportunities to leverage.
Prioritize these gaps and opportunities based on their potential impact on your business goals and the feasibility of addressing them.
6. Develop and implement improvement strategies
After careful identification of the gaps and opportunities, you can now work on crafting targeted strategies.
Improve on your weaknesses and capitalize on your strengths. This is the part where you realize you're getting the most out of benchmarking.
7. Monitor progress and adjust as needed
Remember that successful benchmarking is an ongoing process.
Regularly track the progress of your improvement initiatives against the benchmarks you've set.
Be prepared to refine your approach based on the results you observe, ensuring that your benchmarking efforts continue to drive meaningful improvements in your B2B operations.
By doing a benchmark, you'll be able to continuously improve your business strategies and take on the challenges of the ever-evolving B2B market.
And, speaking of challenges...
Here are the most common issues a B2B company could face related to benchmarking. The best practices to solve them come in handy.
Challenges in B2B benchmarking and best practices to overcome them
B2B benchmarking offers numerous benefits.
But it's also important to recognize the potential challenges that may arise during the process as they can affect the effectiveness and accuracy of your benchmarking data if not managed properly.
Limited access to competitor data
For one, there's limited access to competitor data. Many companies keep their performance metrics and operational details confidential.
Good thing there are available tools to help you gather insights about your competitors' performance where it's legal.
Difficulty in finding comparable businesses
There's also the challenge of finding truly comparable businesses due to variations in company size, product offerings, target markets, and business models.
To address this, you may need to look beyond your immediate competitors and consider companies with similar operational models or those facing comparable challenges, even if they're in different industries.
For best results, you can use the keyword search on Panoramata to find exactly what you're looking for – whether it's a company, a subindustry, or a specialized service.
Ensuring accurate and relevant data
Your benchmark data can quickly become obsolete when you do your research manually. Plus, this process won't save you time and energy.
It is exceptionally helpful to use automation in this regard to ensure that the information used for comparison is accurate, up-to-date, and truly representative of the metrics being measured.
Regularly updating your benchmarking strategy
As mentioned earlier, benchmarking is an ongoing practice.
It is a must to establish a regular schedule for benchmarking activities to maintain momentum and keep your organization aligned with industry trends.
Some companies create a dedicated benchmarking team or assign specific roles to team members – responsible for overseeing the process, ensuring consistent data collection and analysis of gained insights.
Alternatively, others rely on benchmarking platforms to provide quality reports whenever they need it.
