Lots of things in life involve comparison. When planning a vacation, you might compare prices of different destinations. Or, when you're trying food at a new restaurant, you might compare it to another restaurant you have previously visited. This comparison translates over to the business world too. Allow us to explain.
Do you remember the last time you compared your business to a competitor or industry leader? We've all done that at one point or another, maybe even today. Did you know there is actually a term for this? It's called benchmarking. Benchmarking is the process of comparing business performance metrics and best practices to industry leaders and companies that have a competitive advantage. Plus, it even plays a large role in marketing.
What is benchmarking?
Benchmarking can essentially help you develop a better understanding of how your business is performing in comparison to competitors. It can also give you a clear vision of the potential your business has. Performance benchmarking can help you keep track of industry averages and industry standards. With this knowledge, you can start to develop key performance indicators (kpis) that you'll need to follow for continuous improvement in your business. Benchmarking should play a crucial role in your organization when developing goals for your business, pinpointing ways to improve, or creating new processes.
When it comes to benchmark marketing, analytics is going to be your best friend. Keep track of google analytics of your website and social media performance such as Instagram and twitter analytics for a clear lens on where your business stands in the industry.
The challenge of benchmarking
Sometimes it can be hard for marketers when trying to find clear goals and metrics for their business. They know they want to be an industry leader, but they create goals and metrics that are unattainable or unrelated to where they need to be. (Houston, I think we have a problem!) So, when benchmarking, make sure you keep the following challenges in mind:
1) Compared to the right organizations: You're going to want to know your organization inside and out to know which ones to compare to. Construct a set of KPIs, and understand your target audience, the marketing activities you do, your company's market share, and its marketing budget. Then, find competitors that have these similarities in their business to compare to. It will be easier to pinpoint things to improve on and learn how to improve upon them when you compare your business to one that is like yours in several aspects.
2) Know how to find the "right" best practices: You've found the right organizations to compare to - congratulations! Now onto step two. With so many competitors out there, it can be hard to know what a best practice is and what is just a current trend. Do some market research on the best practices in your industry first to spot which ones you should implement.
3) Establish how to develop your own solutions: The next step is to take a unique approach in setting up a clear business case in terms of performance metrics such as market share, cost, risk, customer retention, and customer satisfaction. This sounds like a lot but keeping track of all performance metrics will make it easier for your business to reach its goals in the long run.
Why benchmark marketing is helpful
One of the main types of benchmark marketing is strategic benchmarking. Strategic benchmarking is all about improving your business by scoping out what other businesses are doing well. Doing this can help your business determine where it stands in the industry. You'll be able to look at how other businesses are succeeding in comparison to your own company. This form of benchmarking is helpful because it can give you a better idea the strategies your business should implement. Maybe you find out you need a customer service team, different marketing activities, or that you need to focus more on your Google analytics. Whatever it is, your work is cut out for you!
By having an annual benchmark marketing strategy, your business can determine the right goals to set in order to boost the business's efficiency. Look at what other companies are doing well and use that as a baseline for where you hope to be. Maybe you want to create a new email marketing strategy that promotes brand awareness and increases the average click per campaign. Start by subscribing to competitor's email newsletters to see the things they're implementing in their content. Mimic some of the things they do that seem to be working well - you might just start seeing results! Plus, you can set up an innovative strategy to effectively monitor your progress towards your goals that will prove whether the new techniques you're following are helping.
Benchmark marketing isn't just helpful to point out where your business stands. It can also help motivate employees and give your business a more effective analysis strategy. If you set up clear goals while benchmark marketing, you can plot out where your company needs more work. We know this can be hard, but no company is perfect, and admitting what you need to work on will help you get closer to the end goal sooner!
Benchmark marketing can even help give your employees more motivation. We know what you're thinking: how is providing employees with things to work on supposed to motivate them? Wouldn't this just make them mad? Well, you definitely want to approach it in a way that says, "look where we can be" rather than "you're doing this wrong". By taking this approach and showing your fellow employees the cold, hard analytics, you're essentially spelling it out for them where they need to work on and the potential that they have. Who knows, maybe they'll even thank you.
Even HubSpot speaks highly of benchmarking. They say that, "By benchmarking yourself against the competitors, you can identify any "blind spots" in your sales efforts, pinpoint best practices, and maintain a competitive edge within your market." Sounds to us like benchmarking means setting your business up for success in the future.
In short, keeping a benchmark marketing strategy will enable your business to create a template to follow in order to be successful and reach your goals. If you're looking to start benchmarking in order to map out your business's place in the industry, we'd be happy to get you started. Reach out to us to set up your discovery call today.