"Customer obsession is not just about meeting their needs, it's about exceeding their expectations and providing an exceptional experience that they'll remember." - Jeff Bezos, Founder of Amazon.
According to a study by Deloitte, customer-centric companies are 60% more profitable compared to companies that are not focused on the customer. Another study also found that experience-driven businesses grew revenue 1.4 times faster and increased customer lifetime value 1.6 times more than other companies.
In today's highly competitive business landscape, you can't afford to be complacent when it comes to meeting customer expectations. It's crucial for you to adopt customer-centric practices and prioritize customer obsession to stay ahead of the game.
But how do you know if you're truly meeting your customers' needs and expectations? One way to start is by benchmarking against your competitors.
Benchmarking against competitors can help you identify gaps in your customer experience and gain insights into what your customers value most. By analyzing your competitors' strengths and weaknesses, you can learn from their successes and failures and fine-tune your customer experience strategy. So if you're ready to get serious about customer obsession, it's time to start benchmarking and take your CX endeavors to the next level.
In this blog, we will discuss the importance of customer obsession, the benefits of benchmarking, and how to conduct a successful benchmarking analysis to kickstart your customer obsession journey.
Define Your Customer Obsession By Benchmarking Against Competitors
Customers today crave exceptional customer experiences, and to provide them with that, you require a customer-obsessed mindset that puts the customer at the center of everything a company does.
However, it can be challenging to determine why customer obsession matters, what exactly it entails, and how to achieve it. That's where benchmarking against competitors comes in. By studying your competitors' customer experiences and comparing them to your own, you can define your customer obsession and identify areas for improvement.
Here are 4 benefits of benchmarking against competitors which assist you in defining your customer obsession status:-
1) Improving Customer Experience
By analyzing your competitors' strategies and comparing them to your brand's, you can identify areas where your customer experience falls short, and accordingly, you can implement changes to improve it. This can include everything from enhancing the user interface of your website to improving customer service response times.
As a result, your business can create a more streamlined and enjoyable customer experience, ultimately leading to increased customer loyalty and higher conversion rates. By striving to improve your customer experience, you demonstrate a true customer obsession, which can help you increase customer satisfaction and stand out in a crowded marketplace.
2) Increasing Customer Loyalty
By identifying what your competitors do well and what your customers demand from the product or service you offer, you can deliver a better customer experience that exceeds their expectations. When customers feel that your company truly understands and cares about their needs, they're more likely to remain loyal and continue doing business with you for a very long period.
Furthermore, this can lead to increased customer lifetime value, improved customer retention rates, and a more positive brand reputation. By prioritizing customer loyalty, you can confirm your commitment to customers and build a business that promotes a customer-first culture, making it customer-friendly.
3) Reducing Costs
Benchmarking against competitors can also help businesses reduce costs. By analyzing your competitors' operations, you can identify areas where you may be overspending or where you could implement cost-saving measures. For example, if one of your competitors can provide a similar level of customer service with fewer staff members, you may be able to run your operations efficiently and reduce your workforce while still meeting customer needs.
Additionally, by adopting best practices from your competitors, you can avoid costly mistakes and improve efficiency. Ultimately, reducing costs can help your business increase profitability and further reinvest in enhancing the customer experience, leading to even greater success in the long run.
4) Gaining a Competitive Advantage
By studying your competitors and identifying the ways they operate, you can gain valuable information that can assist you in informing your strategies. Competitive benchmarking helps you focus on creating an exceptional customer experience and position your business as the go-to choice for customers.
Additionally, by adopting best practices from your competitors, you can improve your operations and better serve your customers. Ultimately, gaining a competitive advantage can help your business thrive in a crowded marketplace, and a customer-obsessed approach is key to achieving this goal.
Justify Customer Obsession by Choosing the Right Competitors
As companies strive to gain the majority of the market share, many are following a customer-obsessed culture, where the customer and their concerns are at the heart and soul of every decision. However, to truly justify the customer obsession, it's crucial to choose the right competitors to benchmark against. By carefully selecting competitors, you can create a flawless and standard comparison model and use that to drive business success.
Consider these 6 factors to benchmark against competitors:-
1) Industry
Different industries have unique characteristics and dynamics, and you must select competitors within the same industry to gain meaningful insights. By analyzing competitors within the same industry, you can identify industry best practices, consumer behavior, and trends that can help you inform your business strategies.
2) Size
Companies of different sizes have different resources, capabilities, and priorities, which can impact their strategies and operations. Benchmarking against competitors of similar size can help your brand identify areas where you can improve performance while also providing insights into how to leverage the company size advantage.
Moreover, companies that are smaller than their competitors can learn from larger rivals about scaling operations and processes, while larger companies can learn from smaller competitors about agility and innovation.
3) Geography
Different regions and countries have unique economic, cultural, and regulatory environments which impact a company's operations and performance. Benchmarking against competitors within the same geographic area can provide valuable insights into local market conditions, customer choices, and business practices.
4) Customer Base
Companies that serve different customer segments have unique business models, marketing strategies, and product offerings, which can help them run their businesses smoothly. Benchmarking against competitors that serve a similar customer base can provide valuable insights into their procedures and customer preferences, needs, and pain points and help you gain different ideas to perform a particular task in distinct and most effective ways.
5) Reputation
Companies with different reputations have varying levels of trust and credibility among customers, investors, and other stakeholders. Benchmarking against competitors with similar reputations can provide valuable insights into how to build and maintain a positive brand image and mitigate reputational risks. By considering brand reputation for benchmarking, you can drive brand recognition, loyalty, and advocacy.
6) Data Availability
Companies that have different levels of data availability may have varying degrees of insight into customer expectations, market trends, and operational performance. Benchmarking against competitors that have similar data availability can provide valuable insights into how to collect, analyze, and leverage data to drive business success. By considering data availability as a factor in your benchmarking efforts, you can make data-driven decisions that drive innovation, efficiency, and growth.
Challenges You Might Face While Benchmarking Against Competitors
Here are 3 challenges that you might face while benchmarking against competitors:-
1) Availability and Quality of Data
It can be tough to gather accurate and comprehensive data about the competitors' performance, especially if they are private companies or operate in opaque industries. Even when data is available, it may be inconsistent or outdated, making it challenging to compare apples to apples.
Moreover, there may be a lack of standardization in data collection and reporting, leading to confusion and inaccuracies. Companies that can overcome these challenges and gather high-quality data are positioned better to benchmark effectively and gain insights that can drive performance improvements.
2) Lack of Willingness to Share Information
Competitors may be reluctant to share information about their strategies, tactics, or performance, especially if they view benchmarking as a zero-sum game where any gain by one company is a loss for another. This reluctance can worsen if there is a history of intense competition or if the companies have a contentious relationship.
To overcome this challenge, companies can focus on building trust with their competitors, highlighting the mutual benefits of benchmarking, and assuring the confidentiality and anonymity of data. Companies may also consider working with third-party organizations that specialize in benchmarking to help facilitate data sharing and reduce perceived bias.
3) Resistance to Change
Benchmarking often involves identifying areas where a company can improve and making changes to processes, systems, or strategies to achieve better results. However, employees may be resistant to change, especially if they perceive the changes as a threat to their job security or workload. Additionally, some stakeholders may be attached to current practices or processes, making it difficult to gain buy-in for changes.
Companies can engage employees and stakeholders early in the benchmarking process, communicate the rationale for change, and provide opportunities for feedback and input. They can also leverage change management frameworks to minimize disruption and ensure a smooth transition to new practices or processes.
Conduct Competitive Benchmarking to Enhance Customer Obsession
Competitive benchmarking involves comparing one's business processes, practices, and performance metrics against those of competitors or industry leaders. And to conduct successful benchmarking, it is crucial to have a well-planned procedure in place.
Here is a 4-step effective process to conduct competitive benchmarking and enhance your customer obsession strategy:-
1) Identifying Key Performance Indicators (KPIs)
KPIs are measurable values that indicate how effectively a business is achieving its objectives, and they are essential in determining the success of any customer-focused initiative.
Here are some key points to keep in mind when identifying KPIs for benchmarking and customer obsession strategy enhancement:
- Determine the specific goals of your customer obsession strategy and identify KPIs that align with these objectives.
- Look at the KPIs of competitors or industry leaders to determine which metrics are essential for success in your industry.
- Choose KPIs that are measurable, specific, and relevant to your business, and can be tracked consistently over time.
- Keep your KPIs simple and manageable - too many indicators can dilute your focus and make it difficult to identify areas for improvement.
2) Collecting Data from Competitors
Collecting data from competitors involves gathering information about your competitors' practices, processes, and performance metrics to identify areas where your business can improve and provide exceptional customer service.
Here are some key points to keep in mind when collecting data from competitors:
- Use a variety of sources to collect data, including public sources like annual reports, industry publications, customer feedback, and social media, as well as private sources like surveys and interviews of competitors' employees.
- Look for both quantitative data (numbers and statistics) and qualitative data (descriptive information) to gain a holistic understanding of your competitors' performance.
- Focus on areas where your competitors excel and compare these to your performance to identify gaps in your customer obsession strategy.
- Use benchmarking tools like SWOT analysis, gap analysis, and trend analysis to analyze the data and identify key insights.
- Be ethical in your data collection efforts - avoid unethical or illegal methods like hacking or industrial espionage.
3) Analyzing and Interpreting Data
After collecting data from competitors, you need to analyze and interpret the data to identify trends, patterns, and areas where your business can perform meaningful transformations.
Here are some key points to keep in mind when analyzing and interpreting data:
- Use data visualization tools like charts and graphs to help identify trends and patterns in the data.
- Compare your performance to that of your competitors to identify areas where your business is falling short and act accordingly.
- Use statistical analysis to identify significant differences in performance between your business and competitors.
- Identify best practices and successful strategies used by competitors that can be adapted and implemented in your business.
4) Developing an Action Plan
Developing an action plan involves using the insights gained from analyzing and interpreting data to create a plan of action for improving your business's customer obsession strategy.
Here are some key points to keep in mind when developing an action plan:
- Use the insights gained from benchmarking to identify specific areas for improvement in your customer obsession strategy.
- Develop SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals that are aligned with your business's overall objectives and focus on areas where your business can gain a competitive advantage.
- Identify specific actions and strategies to achieve your goals, including changes to business processes, technology investments, and training programs for employees.
- Assign responsibility for implementing the action plan to specific individuals or teams within the organization.
- Develop a timeline for implementing the action plan, and regularly track progress and adjust strategies as needed to ensure success.
To Wrap Up
Customer obsession is the key to building a successful and sustainable business in today's competitive terrain. By focusing on the needs and preferences of your customers, you can create products and services that truly resonate with them and build a loyal customer base that drives long-term growth. And competitive benchmarking is one of the best ways to describe your customer obsession.
So, if you're serious about customer obsession, don't wait any longer. Start your benchmarking efforts today and gain valuable insights into your competitive landscape.
And remember, the key to successful benchmarking is choosing the right competitors based on industry, size, geography, customer base, reputation, and data availability. From identifying areas of improvement to pinpointing new growth opportunities, benchmarking against your competitors is an essential step on the path to becoming one of the customer-obsessed companies.
Read More:- How Can A Stellar Customer Experience Become Your Competitive Advantage?