Everything you need to know about benchmarking 

At my first day on the job, they asked me to “benchmark” the main competitors of our biggest brand. I had no idea what they were asking to do, they only explained to me the steps I needed to follow. It took all afternoon to finish and at the end I had an endless list of data that I didn’t understand nor know what to do with. So, to stop anyone else from having to go through this situation, I’ll explain here what a benchmark is, how useful it is and why we should do it.

What is benchmarking?

There are few subjects out there that have all the answers, as we’ve said many times before, marketing is not one of these subjects. There is no right answer, there is no one way of doing things and neither is there something that will guarantee success. What we do know is that certain tools can help us become successful.

To put it simply, benchmarking is researching and extensively analysing your competitors, with the aim of streamlining processes to yield better results. It’s comparison as evaluation where we can see what they’re doing and look at other companies’ statistics, like the amount of unique visitors. In doing this, it means that you don’t have to start from scratch and you can improve on any weaknesses you have. However, no matter how much inspiration you take from other companies, never forget to stay true to your identity.

It’s not about copying, and even though there’s nothing wrong with that, you have to learn from your own mistakes as well as from others in order to get the best results possible. Through this competitive method, you can analyse and streamline processes for quality, time, price, effectiveness and what feelings a product, brand, or post evokes for your client.

Types of benchmarking

There are mainly 3 types of benchmarking, which are as follows:

1. Competitive: This refers to directly analysing and comparing our brand with our main competitors. These can be direct or indirect competitors or even competitors we aspire to have (ones that we want to match or even overtake at some point). This is also known as external benchmarking.
2. Functional: In this case, we take examples of cbut use strategies that can help us grow. For example, maybe you have an online book shop, but you see strategies from a clothes shop that work super well for them and that you can apply.
3. Internal: When we talk about large companies with many different brands, this is a viable option. We can carry out an analysis comparing brands that do work to find ways to boost those that do not.

You can also compare different departments, analysing what ones are most profitable to try and emulate their results, or for a multinational, you can compare different head offices.

Finally, there is another option that could be considered benchmarking called integral benchmarking. This refers to doing a comprehensive analysis fusing the three previous types together.

How can you benchmark?

Broadly speaking, the concept sounds quite convincing. But how do you actually do it? Well, it’s a process made up of different stages, which can be shifted and adapted according to each need. Here, we’ll share some of the general ones so you can have a good starting point.

1. Choose what type of benchmarking you want to do: outline your goals, identify them well, think where you want your research to go and decide on what one of the three types you want. Each one can help you with different aspects that you’re looking to improve.
2. Put a team together: who will do it? What team is best suited for this? Assign clearly defined roles to everyone as well as deadlines. The best work is often work that is well prepared.
3. Highlight the competitors you want to study: whether its brand within your own company, external brands, or companies from other sectors, highlight what companies you’ll be looking at. Find the work that inspires you, that you know works well and brings the results you want. Don’t get carried away only by those you admire, research even those you don’t like and don’t interest you.
4. Choose your KPIs and start analysing: define what it is you want to know and basing yourself off of that you’ll know what data you want to collect and organise. Remember that this process can be quite tedious, but the more information you have, the better your conclusions will be.
5. Analyse the data collected: the numbers mean nothing if you don’t know what to do with them. This is why this step is essential. Compare all the data gathered with yours and spot where there are any differences. Complete all the schemes and graphs you need to better understand the information and make use of data driven marketing.
6. Spot any room for improvement and get to work: now is the time to use everything you’ve learned. Make a calendar that shows the start and end dates of when you’ll implement these changes. Highlight what ones can be completed in the short, medium and long term and the changes that are not viable at all.

The benefits of benchmarking

This is clearly hard work and may seem unnecessary, but the benefits reaped from this are many if you know how to target your research and apply the results to your goals.

The benefits can change depending on the type of company, from what you want to achieve to what you want to improve. But these are a few things that benchmarking can help you with:

• It can improve your organic positioning (SEO strategy): if you know what SEO in marketing is, you should know that through benchmarking you can find out which keywords your competitors are using. You can try to emulate the ones that work best for them and implement the ones they are ignoring.
• It can allow you to better know your target: your strategies probably don’t work because you’re focusing on the wrong audience. Go over what works for your competition and try to segment in a similar way to find people that like what you offer.
• It can improve your strategy: this is considered to be one of the main strategies. Find your weak spots and find your competition’s strengths so you can implement the necessary changes.
• It allows you to better know you competition: and we’re not just talking about knowing their names or what they offer, but rather the deeper knowledge you get so you can know where you stand in the market and what you’re up against.