Understanding your performance is the key (OK, one of many) to unlocking growth. Just as athletes track their progress to compete at the highest level, marketers must benchmark their strategies to stay ahead. Otherwise falling behind is inevitable.
This process isn't just about chasing trends for the sake of it; it's about understanding your position in the market landscape and optimising your approach for maximum impact.
Let’s look at how you can benefit from benchmarking your marketing.
What is benchmarking?
Benchmarking is a strategic approach that involves comparing your business's performance, products, or services against those of your competitors or industry standards. Simply put, it allows your company to identify areas for improvement, set realistic goals, and gain a competitive edge in the market.
Why benchmarking marketing is important
Benchmarking your marketing is a vital component and can’t be ignored. Here’s why you need to give it more attention:
- Identify performance gaps: Benchmarking acts like a magnifying glass, highlighting where your business may fall short compared to other industry leaders or standard practices. By pinpointing these performance gaps, your business can focus its efforts on areas of improvement. This ensures you’re not just playing catch up, but potentially leapfrogging the competition too.
- Set realistic goals: Setting marketing goals can sometimes feel like a shot in the dark. Benchmarking equips your marketers with tangible data, helping them set achievable and realistic targets that reflect industry standards. These informed goals are not just theoretically attainable—they're grounded in what’s proven possible.
- Improve competitiveness: Understanding where you stand relative to your competitors is pivotal. By benchmarking effectively, you can gain insights into market trends and best practices, allowing your business to adopt tactics that keep it competitive. This proactive approach helps ensure that your strategies remain relevant and robust against market shifts.
- Optimise resource allocation: Resource allocation often dictates a campaign’s success or failure. Benchmarking empowers your business to allocate budgets and resources more efficiently by revealing which marketing initiatives deliver the best returns. In doing so, you can easily streamline spending, maximise returns, and refine your marketing focus for optimal results.
- Drive innovation: In a competitive landscape, stagnation is not an option. Benchmarking encourages businesses to embrace innovation, exploring new strategies and technologies that align them with industry pioneers. This drive for continuous improvement not only elevates business performance but also positions companies as thought leaders within their sector, pushing boundaries and setting new standards.
Types of benchmarking
Here are some examples of benchmarking that show how you can enhance strategic decision-making and foster continuous improvement:
- Strategic benchmarking: Think of it like comparing your business's roadmap to those of successful explorers who've already navigated similar journeys. It's about aligning your mission and objectives with others who've reached the peaks you aim for. By examining how they tackled obstacles, you can refine your path to success.
- Performance benchmarking: Imagine analysing your business like an athlete reviewing past performance and industry records to improve their game. Performance benchmarking uses KPIs as metrics to evaluate your actions today against what you've achieved in the past. It helps ensure you're on track and provides insight into how you measure up within your industry.
- Process benchmarking: Similar to a cook adjusting their recipe by borrowing a page from a rival chef’s cookbook. By assessing your methodologies against those of competitors, both inside and outside your organisation, you can find ways to enhance efficiency and effectiveness.
- Competitive benchmarking: Picture yourself as a sprinter glancing sideways to gauge the other racers' pace. Competitive benchmarking involves assessing your operations against direct competitors. By understanding where you stand, you gain insights into how your strategies measure up in the broader industry landscape.
- Functional benchmarking: Consider functional benchmarking as a focused magnifying glass examining specific departments or functions within your organisation. Whether you're observing companies like yours or those in different fields, this approach breaks down silos to optimise specific areas.
- External benchmarking: Like a bird taking flight, external benchmarking lets you broaden your horizons by comparing your practices with other entities beyond your usual competitive sphere. This approach offers fresh perspectives, unlocking insights from diverse industries.
- Generic benchmarking: Much like a painter finding inspiration across various art forms, generic benchmarking encourages you to draw wisdom from different fields. It's not confined to your industry, so it allows you to adopt universal best practices and performance benchmarks to enhance your operations.
Our very own Partner Benchmarking Tool scores your current marketing efforts based on your blog, website and social presence. It helps you to better understand your areas of strength and weakness. Try it for free.
10 steps for benchmarking success in 2024
Ready to know how to benchmark marketing? Below are ten points for you to follow that will drive strategic growth and continual improvement:
1. Define clear objectives
The foundation of any effective benchmarking effort is rooted in clear and well-defined objectives. These objectives should align with your overarching business strategy to ensure cohesion across all initiatives. Begin by identifying the specific areas of your business that require enhancement. Are you focused on increasing brand visibility, improving customer engagement, or boosting revenue? This clarity not only streamlines your benchmarking efforts but also serves as a guiding light for your entire team. Objectives act as the compass that directs your actions, ensuring every endeavour contributes meaningfully toward achieving your strategic goals. Additionally, clear objectives facilitate better communication across teams, enabling each member to understand their role in the larger picture and drive focused efforts toward common goals.
2. Identify key metrics
Once objectives are established, the next step is to pinpoint the key performance indicators (KPIs) that will serve as your benchmarks. These metrics should be both relevant and attainable, reflecting your objectives and aligning with industry standards. For instance, if your objective is to enhance customer satisfaction, metrics like Net Promoter Score (NPS) or customer retention rates become paramount.
Here are the key metrics that you should be benchmarking:
- Market share
- Share of Search (SoS)
- Brand awareness
- Customer satisfaction and net promoter score (NPS)
- Conversion rate
- Customer acquisition cost (CAC)
- Customer lifetime value (CLV)
- Website traffic and engagement metrics
- Social media engagement
- Click-through rate (CTR)
- Return on investment (ROI)
- Ad spend and return on ad spend (ROAS)
- Email marketing metrics
- Churn rate
- Engagement-to-conversion rate
KPIs provide quantifiable markers of success, offering insights into what’s working and what’s not. Careful selection of these metrics is crucial; they not only gauge performance but also inform strategic decisions that can recalibrate efforts toward achieving desired outcomes. Each KPI should be investigated in relation to its impact on your business goals, ensuring it provides valuable feedback that drives improvement.
3. Choose competitors
Selecting the right competitors for benchmarking involves more than just identifying who's in the same industry. It requires a deeper look at those who excel in areas pertinent to your objectives. Create a balanced list of direct competitors who share your market space and industry leaders who may showcase best practices worth emulating. This comparative group forms the basis of your benchmarking process, providing the necessary context for evaluation. Examining their strategies, strengths, and weaknesses offers invaluable insights, allowing you to refine your approach and adopt practices that can elevate your business standings. By broadening your focus beyond immediate competitors to include industry giants, you expand your learning scope, potentially uncovering innovative tactics and trends.
4. Utilise advanced analytics tools
To assess your performance accurately, embrace advanced analytics tools that use artificial intelligence and machine learning. These technologies enable comprehensive data analysis, uncovering patterns and insights that might go unnoticed with traditional methods. From social media sentiment to website traffic trends, AI-powered analytics provide a detailed picture of your current position, empowering data-driven decisions. The ability to process vast datasets quickly leads to more swift and informed actions, keeping your company agile in a rapidly changing digital landscape.
Here are the best tools to benchmark marketing activities:
These tools can identify predictive trends, anomalies and more – allowing for proactive strategy adjustments and resource optimisations tailored to specific business needs.
Each of these tools will help with your benchmarking efforts.
5. Gather comprehensive data
Data collection is a critical phase in benchmarking, requiring meticulous attention to sources and methods. It should involve a blend of internal performance metrics and external market data. Sources include social media analytics, website traffic analysis, industry reports, and customer feedback. This diverse data pool provides a holistic view, essential for robust benchmarking. Efficient data collection strategies streamline the process and bolster data accuracy, forming a strong foundation for subsequent analysis. By ensuring a mix of qualitative and quantitative data, you enrich your understanding of market dynamics and consumer behaviour, setting the stage for more impactful business strategies.
6. Analyse performance gaps
Identifying where your business underperforms relative to competitors or industry averages is where benchmarking's true value is realised. Analysing performance gaps involves evaluating data and metrics to spotlight areas needing improvement. These gaps may represent untapped opportunities or weaknesses that hinder growth. By understanding the root causes, you can implement targeted strategies to close these gaps, enhancing competitiveness and overall performance. This analysis requires cross-departmental collaboration to ensure insights lead to actionable solutions, setting a clear path for strategic enhancements.
7. Develop action plans
Armed with insights into performance gaps, the next step is crafting action plans to address these areas. This involves setting realistic targets for improvement, outlining strategic initiatives, and prioritising efforts. Effective action plans incorporate timelines, responsibilities, and measurable outcomes, providing clarity and accountability. Look to industry best practices and innovative solutions used by competitors to inform your strategies, adapting them to fit your company’s unique context. Regularly revisiting and refining these plans ensures they evolve in step with market trends and technological advancements, keeping your initiatives relevant and effective.
8. Implement changes
Execution is key to translating plans into tangible improvements. Implementing action plans involves aligning resources and teams with your strategic initiatives, ensuring a coherent push towards improvement goals. Monitoring these changes closely ensures they are effective and allows for real-time adjustments. Measurement of success should be constant, with performance against set KPIs reviewed to determine the impact of your efforts. Dedicated support from leadership and a well-defined change management process can facilitate smoother implementation and increase the likelihood of sustained improvements.
9. Continuously monitor and adjust
In the dynamic digital landscape, ongoing monitoring and adaptation are imperative to maintain a competitive edge. Regularly reviewing benchmarking data ensures your business remains aligned with market shifts and evolving customer expectations. Prompt adjustments based on real-time feedback enable continuous improvement, reinforcing your company’s agility and responsiveness. Developing a culture that values flexibility and iteration keeps your strategies robust and reduces the risk of inertia. Effective systems for feedback and monitoring empower teams to iterate and innovate continually, fine-tuning approaches to align with strategic objectives.
10. Foster a data-driven culture
Encourage your team to embrace a data-driven mindset, fostering an environment where decision-making is informed by insights rather than intuition. Cultivate curiosity and the willingness to delve into data to uncover trends and drive innovation. Promote the use of analytic skills and tools across all levels of your organisation. Providing training and resources helps employees become proficient in interpreting data, enabling them to contribute meaningfully to strategic initiatives. A data-driven culture supports transparency, accountability, and demonstrates a commitment to constant learning and adaptation.
Don’t wait to get started
Now you know how to benchmark marketing. Now is not the time to sit on your hands and contemplate – it's the to put these steps into action.
When you benchmark marketing activities, you get a transparent and objective way of tracking the effects and impacts of your work. This will lead to you to developing a more comprehensive and data-driven marketing strategy that generates more leads.
And remember: once you have an idea of where you are, it’s a lot easier to plan where you’re going.
We can raise your game
At Fifty Five and Five, our expert marketing team use a variety of digital marketing technologies to help them deliver the best results for our clients. To find out more about our team, what we do, and the technologies we use, get in touch with us today.