Effective positioning within a market segment requires an understanding of the relative strengths and weaknesses of your company and its offerings against the competition. While benchmarking is a key capability to fulfill that goal, common misunderstandings about the goals and practices around benchmarking can limit success, even by skilled competitive intelligence organizations.
Refining the Definition and Process of Benchmarking
It’s tempting to reduce the benchmarking process to simply identifying what your product can do that a competitors’ can’t, and vice versa. While those comparisons can be illuminating, you must look deeper than features and capabilities, setting the goal of developing a holistic understanding of an offering’s competitive position. That perspective includes every aspect of a customer’s pre-sale, sale, and post-sale experience.
To keep the breadth of the benchmarking study under control, discipline is needed to avoid making exhaustive comparisons between the products or services under study. Rather than listing differences for their own sake, restrict the focus to “differences that matter” in the marketplace.
Asking Questions about an Offering’s “Job” to Reveal its Competitive Identity
Context based on usage plays an instrumental role in defining the competitive reality that surrounds a product or service. Because customers make purchases to fulfill specific business needs, your benchmarking effort must ask, “what job did the offering enter the market to accomplish?” How does it perform that job, compared to competitors, and are you considering competitors that target that same job (or that may soon do so)?
Moreover, how does the product or service get accessed or consumed, and how well is that characteristic suited to the job the offering seeks to perform? How do customers experience the fulfillment of that job—for example, does the offering meet changing requirements gracefully, or does it place rigid usability demands on the customer?
Expanding Comparisons, Beyond the Product or Service Itself
To analyze the broader identity of offerings, benchmarking must compare the end-to-end experience associated with them. External, operational factors impact the delivery of a product or service, helping to forge customer experience and perception. For example, the sales process can range from a bare-bones transactional model to a high-touch consultative one, with varying degrees of turnaround time, post-sale support, and so on.
Fulfillment factors that include ordering, shipping, and service delivery can also play a large role in establishing how a customer experiences the process. The reputation of support may influence people’s decision to buy in the first place. Sales partners and channels can likewise play a vital role in the decision-making process around a sale, based on aspects such as their size, support capabilities, and geographical breadth.
Bu Sean Campbell
By Scott Swigart