Competitive Customer Benchmarking – A Step-by-step Approach
In this article, you'll learn a step-by-step approach to a competitive customer benchmarking process and how to do it strategy
The conventional age-old strategies around customer experience have always been primarily intuitive. A business would change the background, note its impact on the top line or bottom line, and take reactive decisions accordingly. In this article, you’ll learn a step-by-step approach to a competitive customer benchmarking process and how to do it strategy.
Now with the likes of Amazon, Walmart, Starbucks, and other business giants encroaching into unforeseeable spaces, smaller businesses have to fight tooth and nail to get one thin slice of the market share pie.
What has been even more revolutionary is the exponential boom in the use of social media platforms across the world. Imagine the degree of interaction that customers and potential customers can now achieve by publicly voicing their positive or negative experiences about products, services, or businesses.
How has Customer Behavior Changed in 2023?
The picture isn’t all gloomy, after all. According to a report by a pioneer in customer engagement, MoEngage, in Southeast Asia alone, Daily Active Users (DAUs) of e-commerce, retail and D2C businesses have surged by 13.3% in 4 months in the year 2021.
A similar uptrend has been observed in the Monthly Active Users (MAUs) of the same brands, attesting that customers have been increasingly adopting online shopping through mobile apps and websites. Footfall in brick and mortar shops has dipped, and brands are striving for an omnichannel presence to remain relevant and retain customers with customer competitive benchmarking.
Why Perform Competitive Benchmarking and Analysis?
The juggernauts of the business world have pursued benchmarking practices to attain extraordinary success shortly after being embraced by Xerox Corporation in the late 1900s for the first time. It is an extension of the Total Quality Management (TQM) philosophy that works with several predetermined metrics to compare an organization’s business processes against the industry’s best practices (also known as benchmarks).
Contrary to what it might sound like, it is not merely ‘copying or imitating,’. Rather about espousing lessons learned from the leaders in a particular function or business process to best suit your objectives and work on weaknesses. In this article, you’ll learn a step-by-step approach to a competitive customer benchmarking process and how to do it strategy.
The Status quo of Modern Day Benchmarking
The huge amassing of data in the recent past and the twin application of analytics and business intelligence has given competitive benchmarking an unusual twist. Consequently, it has evolved into the most potent tool for small businesses to stay in the game.
AI-powered, brand-focused benchmarking platforms can now curate and conceptualize robust data to help you use competitive intelligence as part of your strategic management practices. Exclusivity, quality, and innovation ought to be coupled with efficient. Competitive customer benchmarking to prevent being ousted by the unforgiving market rivalry.
Why use competitive benchmarking for customer engagement?
User engagement is under a save through online modes like push notifications, emails, text alerts, and website messages throughout the customer lifecycle.
Businesses look to communicate arrivals of new products and services, receive feedback/grievances and interact with customers through this media. Whether online shopping, fintech, or OTT Platforms – customer engagement is the lifeblood of the e-commerce space. If you can get your engagement game to match market leaders and prevent negative word-of-mouth. Monetization and growth of a customer base ought to follow suit.
The Six-Step Approach To Perform Customer Benchmarking
Before delving into the modus operandi embodied in this practice. You should be very particular about the aspect of customer relationship that you seek to elevate to industry-best levels. In this time and era, running behind transactions alone is seldom worthwhile. Businesses with an online presence should instead focus onuser engagement benchmarks.
How intelligently you engage with customers. So, respond to their sentiments would invariably have the highest impact on customer retention and customer growth with customer competitive benchmarking.
Let’s have a rundown of the steps to executive it:
Step 1: Determine the What and Why
This is the rudimental step where you sit with team members, partners, and managers for a rigorous brainstorming session. About the weaknesses or challenges that you wish to target through this approach. Having clear maps and matrices broken into definite goals and sub-goals is crucial in getting the next step right.
To get the most out of competitive benchmarking,. It is essential to acknowledge the peculiarity of your business and the immediate ecosystem where you operate.
For instance, as a retail e-commerce business. Your benchmarking objective could be to improve customer engagement at a certain YoY percentage. Or to monetize customers you were engaging with.
72% of businesses say that competitive customer benchmarking has helped them to improve their customer experience. (Source: Qualtrics, “The State of Customer Experience, 2023)
Step 2: Identify the Drivers and KPIs
While the classical benchmarking framework essentially remains the same. The drivers and Key Performance Indicators have evolved concurrently with the rapid digitization of interaction channels.