B2B Benchmarking: The Element of Competitive Advantage

B2B benchmarking is no new trick. It began in the 70’s when Xerox pioneered formal benchmarking processes to improve their operations by comparing them with industry best practices. By the 80’s and 90’s, it became widespread, and its application extended into the B2B space. But we’re not here to talk history. Today, the principles of B2B benchmarking have evolved. While operational efficiencies remain a key metric, product innovation and customer satisfaction allow a greater competitive edge. As a B2B marketing agency, we regularly use benchmarking to strategically plan solutions for our clients, making it a pivotal tool in B2B marketing.

Let’s explore the core elements of B2B benchmarking and steps to conduct an effective benchmarking process.

B2B benchmarking is a strategic process where businesses compare their performance metrics against industry standards or best practices. In B2B marketing, this comparison helps businesses identify areas to enhance such as operational efficiencies, innovating products, or improving customer satisfaction. By understanding their relative position in the market, companies can make informed decisions that lead to better prospects.

We’ve already mentioned the types of benchmarking that businesses can engage in to optimise their performance, but what do they actually mean?

This involves comparing quantitative performance metrics like open rates, click-throughs, and conversions against industry averages. For example, understanding the average open rates for email marketing within the industry can help gauge the effectiveness of their email campaigns.

This type examines the strategies that leading companies employ to remain competitive. By analysing the strategic approaches of market leaders, businesses can adapt and refine their strategies to better compete in their respective industries.

Focuses on comparing operational aspects of a business, such as production processes, efficiency, and technology deployment, against those of competitors known for operational excellence. This type of benchmarking can lead to significant improvements in process efficiency and cost reduction.

Each type of these benchmarks provides specific insights that aim to maintain or improve market standing. But continuously engaging in these practices helps companies not only understand their current performance but also gain foresight into evolving industry trends.

To initiate effective B2B benchmarking, businesses must first identify the key performance indicators (KPIs) and metrics that are most relevant to their strategic goals. This involves determining what aspects of performance are needed to compare to industry standards. Establishing these metrics ensures that the benchmarking process is aligned with the company’s objectives and can effectively measure success.

Now the relevant metrics are identified, the next step is to collect and analyse data. This involves gathering performance data both from within the business and from industry benchmarks. Analyse this data to provide insights into where the business stands in comparison to competitors and highlights areas of strength and opportunities for improvement. Tools and technologies that can automate data collection and analysis are particularly useful in this phase to ensure accuracy and they save time.

The final step in the benchmarking process is implementing improvements based on the insights gained. This could involve making strategic adjustments to marketing strategies, enhancing operational processes, or adopting new technologies. The goal is to leverage the insights from benchmarking to drive meaningful changes that result in better performance and a stronger competitive position in the market. Continuous monitoring and adaption are key to maintaining the gains achieved through these improvements.

Benchmarking enhances decision-making, improves operational efficiency, and strengthens market positioning by comparing performance metrics against industry standards. This process helps businesses identify areas for improvement, adopt best practices, and adapt swiftly to market changes, leading to a sustainable competitive advantage.