What is product benchmarking?
Definition of product benchmarking
Product benchmarking — a form of competitive benchmarking — is defined as a methodical process of comparing a product or service with its main competitors in a given market.
To carry out this benchmarking exercise, every characteristic of the product under scrutiny is studied in depth, whether it be the features offered, ergonomics, technical performance or value for money.
The aim? To pinpoint the competitive gaps that need to be closed in order to match or even exceed market standards.
The main objectives
Assessing a product's overall performance
First and foremost, product benchmarking makes it possible to accurately assess an offering's performance across all its key characteristics, through direct comparison with competing benchmarks on the market.
This comparative analysis provides a revealing snapshot of the relative strengths and weaknesses of the solution under review. The end result is an objective overview against industry standards, giving a meaningful picture of the product's competitiveness.
Identifying priority areas for improvement
But the main value of product benchmarking lies in precisely identifying the levers to pull in order to enhance the appeal of the offering under review.
By highlighting gaps compared with market best practice, this diagnosis makes it possible to target the workstreams to prioritise in order to close shortcomings and match the competition.
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Common methodology
Step 1: Selecting the products to compare
The first step is to build a relevant panel of competing products to compare, representative of the leading solutions in the target market.
Selection is generally based on criteria such as market share, positioning (entry-level, mid-range, premium) or even the target user group.
The challenge is to choose offerings that are sufficiently comparable to obtain meaningful results.
Step 2: Defining the evaluation criteria
Once the panel has been finalised, the next step is to determine, as outlined above, the list of criteria on which the different products will be analysed and scored.
Step 3: Collecting and analysing data
The third step is to collect tangible data on each of the selected products, for all the criteria chosen.
This collection draws on a range of methods: product testing, customer surveys, analysis of specifications, market research, publishers' public data, and so on.
This raw data is then analysed to produce numerical scores for each criterion.
Why use competitive benchmarking for digital adoption?
Making informed decisions
By revealing customer expectations in detail and the gaps to close compared with market leaders, this competitive diagnostic tool helps rationalise strategic choices:
- Understanding the real criteria for users' adoption of a solution.
- Identifying the features to develop as a priority to make the offering more attractive.
- Determining the technological and UX levers that create value for the customer.
- Allocating resources to the most promising areas from a business perspective.
Continuous product improvement
Furthermore, by providing an objective barometer over time through regular waves of comparative analysis, product benchmarking ensures continuous monitoring of solutions' competitiveness. It thus becomes a powerful catalyst for incremental innovation, making it possible to:
- Monitor best practice in your sector on an ongoing basis
- Integrate the latest cutting-edge advances and features quickly
- Test promising new technologies
- Keep pace with the state of the art in a constantly evolving market
Process optimisation
In addition, the lessons learned from benchmarking can trigger an overhaul of internal product development processes, typically leading to:
- Rationalising design methods by drawing on best practice
- Accelerating innovation cycles by adopting agile principles
- Streamlining collaboration between sales, marketing and technical teams
In this way, digital transformation is fuelled by the value delivered to the end customer.
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Strategic alignment
Finally, product benchmarking provides an objective framework for challenging the strategic vision behind digital products and how well they fit the company's business imperatives in its market.
It fosters team alignment by grounding discussions in factual data and a shared diagnosis of the offerings' strengths and weaknesses relative to the competition.
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Conclusion
By objectively dissecting how your offerings are positioned in the competitive maelstrom, product benchmarking equips you with valuable insights to set a course for value-driven innovation and operational excellence. Admittedly, this comparative analysis requires a sound methodology and a rigorous, objective approach. But the competitive dividends it generates make it well worth the effort. At a time when digital disruption is ruthlessly overturning established models, measuring yourself against the best in your category is more essential than ever.