Once you have your business idea and you have validated initially, you need to know who’s taking the money from your future customers now. Remember: Only when you know in deep your competitors you can focus on the “unfair advantage” you are going to develop to bring customers from them to you.So it’s time to use a good benchmarking process. You should find one way to do it efficiently.. and cheap! In this article, I’m going to help you exactly with that, and I even going to give you a free google sheet to do it even more easily.
Here you have the structure of this article. If you are new into this subject, I recommend you to read it in the order is presented, but if you know some of the points I’m talking you about, just skip it and click on the one you’d like to start reading.
A. what's benchmarking?
As you can find on Wikipedia: “Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost.”
This time Wikipedia is clear and accurate. In short, as I told you in the introduction of this article: You need to know what and how is your competence doing before you even start. It would be a true drama if you decided to develop your business improving a lot an aspect that you “guess” it’s going to be your competitive advantage, to realize after the launch that this is not an advantage or innovation at all.
Do you think this is common sense? It is. Nevertheless, there are hundreds of new projects that are delivered to the market without this essential task. Please, now that you know, don’t be another one of them. Take your time, follow this benchmarking process, and save a lot of future suffering and wasting money.
b. THE PROBLEM WITH THE "REGULAR" BENCHMARKING METHODS
You probably know that there are many companies that are specialized in doing Benchmarking studies. But only big companies usually hire their services. Why? Yes, you probably already discovered. Price. They are very expensive.
“The right answer to the question “how much does a benchmarking study cost?” – IF we are talking here about a market where quality standards are taken into account and the used databases are approved – is that the arm’s length range is the EUR 2,500 median. If the market is not so regulated or it’s new, even much more- www.transferpricing.ro”
You don’t want to spend almost 3000$ (at least) when you are starting a project and you’d like to have the first outlook about your niche, competitors, etc. So we need to use creativity and the free tools we have around to achieve our goal.
Let’s do this.
C.THE QUICK AND CHEAP BENCHMARKING PROCESS
There are two main things you should achieve with an effective benchmarking process.
- To know the players and the products that are currently in your market’s niche.
- To develop KPI’s (Key Performance Indicators) to measure every aspect is important for us to consider before we decide our strategy in our business.
1. USE THIS SHEET:
Before you start to learn how to do it, I’m going to share with you the exact same google sheet I use so you can easily follow the steps. Just click on any of the buttons below:
Most of this sheet is based on the one suggested by Pat Flynn in his book “Will it fly?”, But I think that, at least for me, it was necessary to change the last tab in order to complete the Benchmarking process. I will explain it now in depth now. [Full Disclosure: As an affiliate, I receive compensation when you make a purchase through this link on this post. Thanks]
2. places tab:
As Pat says: “Even if it’s an offline brick and mortar store, you need to find out where your target audience resides online. During the research phase, this allows you to not only know what other websites exist in the space, but it helps you learn more about who they are.” – Will it fly?
So you are going to use the Places tab to write the main projects or companies that are nowadays taking the money from your future customers. And even the places (forums, facebook groups, etc.) were your customers are talking about their needs and their experiences with their actual suppliers.
You are going to write down the name of the place, the web address, and some notes.
3. pEOPLE tab:
Here: “By identifying existing authorities that your target audience already trusts, you can collect massive insight as to how your audience behaves, what they respond to, and what they ignore. In other words, you can see what works and what doesn’t.” – Will it fly?
So you are going to use the People tab to have there the top players in your market.
Again, the name, the web address, and some notes.
4. pRODUCTS tab:
Easy: “This is likely one of the most useful areas of research within your niche. You’re going to find the top products, services, and books that are being offered to your audience. In other words, what are they willing to pay for right now?” – Will it fly?
You can do this task easier if you go to amazon.com and you make your search there.
Again, the name, the web address, some notes and the author of the product.
5. KPI's tab:
This is the tab that I changed from Pat’s idea. For me is very important to compare and categorize. Tabs of data that are not analyzed are totally useless.
Here you are going to decide the main KPI’s (Key Performance Indicators) that you are going to compare to know how are your competitors doing it, compared with your business idea.
At this phase, as you can see in the sheet’s tab, you only have to choose the main three competitors and compare them with you.
This is the last part of the sheet you have to make. Now it’s time to get results from there.
D. WHAT TO DO WITH ALL THAT INFO?
Now is time to dive into the data and bring some conclusions out. You should ask yourself these questions and some other you could imagine asking in order to build a good idea about your real possibilities:
1.- How is the market doing it? Is it a young sector? Is it mature? Is it over-exploded?
2.- Is your idea already in the market? Is it something new that you still can’t find out there?
3.- Can you find any “gap” where you could enter the market? Is it a better product? Is it a service? Is it the way both are delivered?
Once you have all those questions answered and much more others you could imagine, it’s time to make “the” big decision:
Do you have one Value Proposition that could fit into the market and stand out from the other competitors?…. Then go ahead, it’s time to develop de idea!! (I could help you with this in my resources area).
Do you think that maybe you still haven’t got what you thought could be great, and you prefer to think twice? Congrats!! You just saved a lot of time and money! You only have to go back to the stage you need in order to correct your strategies and make them better.
Do you need to ask any doubt about this procedure or make any comment to this article? Please, do it! I’d love to hear it from you. I always answer back.
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