A comprehensive guide on how to do competitive benchmarking

You’re investing in marketing, optimizing operations, and rolling out new products—yet your competitors seem to be pulling ahead. Why?

Without knowing where you stand in the market, you risk investing resources in areas with minimal return. Competitive benchmarking highlights your most critical performance gaps, eliminating guesswork and helping you grow your market share.

Competitive benchmarking is crucial for measuring performance over time and determining whether your brand, product, or overall business strategy can outperform competitors, increase market share, and drive sales growth.

In this guide, we’ll introduce you to competitive benchmarking and show you how to use benchmarking surveys to track your performance and stay ahead of the competition. 

Competitive benchmarking is the process of evaluating your business against key competitors using defined metrics and performance indicators to identify strengths, weaknesses, and opportunities for improvement.

By using competitive benchmarking tools to track changes over time, you can conduct competitive analysis and assess your performance against industry standards, competitors, and your historical benchmarks.

Not only can it help you evaluate your performance, but competitive benchmarking will also help you identify best industry practices, which you can then implement to gain an edge over your rivals.

Businesses should use competitive benchmarking to inform their brand strategy and better align with customer expectations. Let’s take a look at some of the advantages of competitive benchmarking.

Competitive benchmarking is a powerful tool for identifying emerging industry trends. By analyzing how leading competitors adapt to market shifts and changing customer expectations, businesses can stay ahead, remain competitive, and make more informed strategic decisions.

Competitive benchmarking enables you to compare key performance indicators (KPIs), such as customer retention, conversion rates, and revenue growth, against those of your competitors. These insights help pinpoint performance gaps and guide targeted improvements.

Competitive benchmarking analysis provides data-driven insights into competitors’ strategies, enabling more informed decisions. Whether investing in new technology or launching a product, it offers valuable context to guide smarter, more strategic choices.

Competitive benchmarking helps you identify when a competitor is gaining or losing market share—critical moments to reassess your strategy. It also reveals how and when competitors respond to emerging trends and innovations, giving you the insights to craft marketing strategies that differentiate your brand.

Studying how other companies meet customer needs can uncover opportunities to enhance customer satisfaction. Benchmarking also reveals what your audience values most—speed, support, or personalization—so you can align your efforts with their expectations.

Benchmarking reveals industry best practices that can help you streamline operations, leading to greater efficiency, reduced costs, and more effective resource allocation across your organization.

Market positioning distinguishes your business from the competition. Competitive benchmarking helps refine your messaging, pricing, and value proposition to better resonate with your target audience and strengthen your brand’s impact.

Benchmarking introduces fresh ideas and strategies that may be missing from your approach. It fuels innovation by revealing what’s succeeding for competitors and uncovering unmet customer needs.

There are many different approaches to competitive benchmarking. You may consider using one, several, or all of the following approaches:

Strategic benchmarking compares business models and strategic approaches to enhance overall business strategies and performance.

Its emphasis on learning from companies outside your industry for fresh inspiration makes it particularly valuable.

For example, many businesses across various sectors have adopted the peer-to-peer model popularized by Uber and Airbnb to drive innovation and growth.

Process benchmarking is used to compare your processes against those of your competitors. This might mean comparing your manufacturing processes, methods of obtaining supplies, or distribution strategy.

By benchmarking your internal processes against industry standards, particularly those of organizations that excel in internal efficiency, you’ll be well-positioned to enhance your efficacy, cost-effectiveness, and competitiveness.

For example, you might learn how to optimize production processes to reduce waste, lower costs, and pass on the benefits to customers through lower prices.

Process and strategic benchmarking involve examining the internal processes and business models of competitors and other businesses.

In contrast, performance benchmarking is focused on outputs and outcomes. It involves examining competitors’ performance in areas of interest and using that performance as a standard or goal for future achievement. Competitive landscape analysis helps you stay ahead of the competition by staying well-informed.

For example, you might use performance benchmarking to measure your performance in areas such as:

Performance benchmarking is typically used in the long term because industries change, and so does the performance of industry incumbents. That means regularly assessing the dominant players and tracking key metrics against one's historical performance.

Product benchmarking examines how your products' quality, features, performance, and pricing compare to those of competitors. It helps your business understand how consumers perceive your products and identify opportunities for differentiation. 

Key aspects analyzed in product benchmarking include:

Successful benchmarking follows a structured process. But don’t worry—we’re here to guide you step by step.  Here's how to do competitor benchmarking.

Start by selecting a set of competitive benchmarks—the metrics or standards you'll use to guide your comparisons and research. While the range of possible benchmarks is virtually limitless, your choices must be strategic.

Consult teams across the organization to determine which metrics are most relevant and which can be excluded. Depending on your company’s size, benchmarks can be defined at a company-wide level or tailored to individual departments.

Most businesses already track key performance indicators, which can serve as a strong foundation for benchmarking. However, relying solely on existing KPIs may cause you to overlook other valuable performance signals. Consider including early indicators of long-term success to build a more comprehensive and forward-looking set of benchmarks.

The next stage of the process is to choose competitors against whom to benchmark yourself. There are several different options.

The next stage of the process is to measure your competitive benchmark metrics. The types of competitive benchmark metrics you should consider will, of course, depend on your approach, but may include these four metrics:

After you’ve chosen your benchmarking metrics, collect data on your competitors. This step involves gathering both quantitative and qualitative data on your competitors using a mix of sources, including:

You should gather information systematically to help build a robust picture of your business's position in the competitive landscape and determine your next steps.

Implementing competitive benchmarking is just the beginning—the real value comes from how you act on the insights of the benchmarking process. It’s essential not to overlook the findings, whether they indicate strengths or reveal gaps.

If the results show you outperform competitors, that’s a strong position. Identify what’s driving that success—operational efficiency, standout marketing, or superior customer experience—and double down on those efforts. But stay vigilant. Competitors are likely benchmarking you, too, and may quickly adapt to close the gap.

If you're falling behind, use the data to understand why and develop targeted strategies to improve. In this case, regular competitive benchmarking becomes even more important, allowing you to track progress over time and adjust your approach based on measurable outcomes.

Benchmarking helps you uncover performance gaps and identify best practices for staying competitive. It highlights areas where your business may fall short of the best industry standards and reveals the strategies of top-performing companies to maintain their edge.

For example, you might discover operational inefficiencies that competitors have eliminated through automation or outsourcing. Or your messaging strategy may generate fewer conversions than theirs. In such cases, it’s crucial to analyze what competitors are doing differently and why it’s working.

By pinpointing where your performance lags, you can set informed, realistic goals and refine your processes to drive meaningful business results.

Once you’ve determined areas for improvement using competitive benchmarking, you’ll want to develop an action plan. Outline how you will close performance gaps and implement best practices, translating your insights into actionable steps.

An action plan should clearly outline objectives tied to identified gaps and specify the specific tasks required to meet each objective. These tasks can include streamlining a process, redesigning a product feature, and updating marketing messaging. Assign an owner to each task to ensure progress and set deadlines and milestones. 

Benchmarking is an ongoing process, not a one-time task. After crafting your action plan, you should monitor and evaluate results over time. To track improvement, revisit the initial benchmarking metrics (e.g., growth rate, market share, customer satisfaction).

Additionally, utilize KPIs to assess the effectiveness of your action plan and identify any emerging issues. Send surveys to customers and employees to gather feedback on how the improvements are being received. If you find something isn’t working, iterate and adjust your approach.

Repeat the benchmarking process periodically to keep ahead of the competition. 

Businesses should leverage competitive benchmarking tools to monitor key performance metrics. Tracking the right metrics ensures you gather meaningful insights to guide strategic improvements. Here are six essential metrics to focus on during the competitive benchmarking process.

Market share reflects the percentage of total sales a company captures within its industry. It’s a key indicator of competitive strength, helping you identify which companies dominate the market and analyze the strategies behind their success.

Measuring customer experience enables your business to better serve customers. You can identify where your business sits in the industry by tracking customer satisfaction through customer satisfaction surveys.

Customer Satisfaction Scores (CSAT) vary based on your industry and are used to assess how you can improve customer experience. A “good” CSAT score typically falls between 70% and 85%, depending on the industry.

Organic search tools offer insights into the daily website traffic and engagement levels of competitors. Traffic reflects consumer interest and brand visibility. Whether the traffic is organic or driven by paid ads, it represents potential leads that can be converted into sales.

Social media performance metrics, such as likes, shares, comments, and follower count, can help identify which competitors have effective messaging strategies and visual identities. Tracking social media engagement enables you to determine the types of content that your target audience interacts with most effectively. 

Different businesses use different pricing strategies. Tracking how key industry players price their products or services is critical to benchmarking. See where your pricing stands in the market and identify if adjustments need to be made to stay competitive. 

Brand awareness and perception are key brand metrics to track during competitive benchmarking. These metrics can be tracked using customer surveys, such as customer satisfaction, Net Promoter Score® (NPS), or brand awareness surveys. Understanding how customers perceive your brand compared to your competitors and why is essential. 

Here are a couple of real-world examples of businesses using benchmarking to improve. 

During the mid-1900s, Toyota was a relatively small player in the global automotive industry, facing stiff competition from established giants like Ford and General Motors. Toyota turned to benchmarking as a strategic tool to improve its manufacturing efficiency and product quality.

The company sent engineers to study Ford’s production facilities in the United States, closely examining assembly line processes and quality control practices. Instead of replicating these methods outright, Toyota refined and adapted them to suit its operations, laying the foundation for its Toyota Production System.

Walmart dramatically enhanced its supply chain efficiency through strategic benchmarking. The company identified performance gaps by comparing its operations with top competitors and uncovered opportunities to improve inventory management. This led to the implementation of innovative strategies that reduced stockouts and operational costs.

Beyond analyzing direct competitors, Walmart benchmarked against high-performing companies in other industries. This broader approach enabled the company to adopt cross-industry best practices, foster innovation across departments, and streamline logistics. As a result, Walmart significantly strengthened its supply chain and achieved greater overall operational efficiency.

Effective benchmarking requires a strategic approach that takes time and thought. Before engaging in competitive benchmarking, it is essential to understand several key best practices. 

Using competitive benchmarking to evaluate competitors, your business can assess its market position. Studying other players in the industry can help you gain a competitive advantage and drive innovation. Marketing teams can use SurveyMonkey for market research to improve customer satisfaction. With SurveyMonkey, you can turn data into insights faster than ever. 

Explore our price optimization, consumer behavior, and product development survey templates to support your competitive benchmarking efforts. 

Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.