Benchmarking helps you to define the goals that you should be striving for by determining where you stand in comparison to your own past results (internal benchmarking), competitors (competitive benchmarking), or your industry (strategic benchmarking).
Understand Where You Are
Get familiar with your KPIs (key performance indicators). There are many KPIs that you can use depending on your specific business. For example, you might want to consider sales, growth, social media, brand awareness, SEO, or an array of these things. In addition, KPIs include things like sales, keyword ranking, or email open rates. For additional insight check out a recent article we wrote on measuring marketing effectiveness.
Tools that you can use to help you understand your KPIs include Google and social media analytics, SEMrush, Similarweb, MailChimp, and Spyfu. In addition to these third-party tools, also consider your internal records from years past as well.
Use Industry Benchmarks to Find Out Where You Should Be
Small local storefronts may want to compare their numbers with direct competitors. For larger companies or online stores and commerce, you will need to compare your KPIs with the industry standard to get a more accurate picture of where you want to be.
Be careful not to fall into the confirmation bias trap. Instead, take a look at the evidence, and then let the numbers lead you. Then, consider whether or not you come closer to reaching or exceeding the industry standard year after year, as this helps you define your own business’ trends.
Set Goals to Get There
You can compare where you are with where you want to be to set achievable goals. Find gaps where your numbers are lower than the standard you are comparing to. For example, if your email open rate is at 15 percent, but across your industry, the average is 21 percent, your goal will be to reach or surpass an open rate of 21 percent.
Benefits of Benchmarking
Benchmarking or benchmark marketing can have many benefits for your business, no matter what size or type of business it is.
You can use internal benchmarking to improve your processes and procedures. This can help you increase your bottom line by cutting costs and becoming more efficient.
You can use competitive benchmarking to help you determine which of your competitors’ practices you might want to adopt or improve upon for your own business.
Strategic benchmarking helps you understand the trends and new opportunities within your industry. You can start competing in these areas before your competitors, giving you a solid edge.
Benchmarking helps you to define what you are doing that works and what doesn’t work. Knowing this will allow you to correct course if necessary and invest more effort into what will take you the furthest.
Don’t Stop with Benchmarking
Benchmarking is not something you should do one time and then forget about it. As your business grows and your industry moves, you will need to re-assess. It is a good idea to use the benchmarking process every quarter for the best results.
By following the advice outlined above, you can improve your marketing campaigns’ quality and overall efficacy going forward.