The Complete Guide to Benchmarking in Marketing

Benchmarking is an essential process for any marketing team looking to improve performance. By comparing your metrics and strategies against competitors and industry standards, you gain valuable insights into strengths, weaknesses, and opportunities. This allows you to set realistic goals, allocate budget and resources effectively, and implement targeted strategies to outperform rivals.

With the right approach, benchmarking helps drive growth, increase efficiency, and boost ROI. This definitive guide outlines everything you need to know to benchmark successfully

What Exactly is Benchmarking in Marketing?

Benchmarking refers to the practice of measuring your company’s metrics and performance against predefined reference points These are known as “benchmarks” and allow you to assess how you stack up in areas like

• Sales and revenue
• Website traffic
• Online visibility
• Marketing costs
• Social media engagement
• Email open rates
• And more

The process gives context around strengths and weaknesses. For example, benchmarking might reveal you have an above-average conversion rate but spend more on PPC ads than competitors.

Benchmarks come from

• Industry averages – Using aggregated data to compare against wider sector norms.
• Past performance – Evaluating against your own historical metrics.
• Competitors – Directly comparing performance with rival brands.

So in a nutshell, benchmarking helps answer questions like:

• How efficient is our marketing compared to the industry average?
• Is our marketing strategy more/less effective than competitors?
• Are we improving campaign performance month-on-month?

The insights uncovered allow you to refine strategy, reallocate marketing budget, and optimize activities.

Why is Marketing Benchmarking Important?

Benchmarking provides clarity on where you stand versus rivals and norms. This enables better decision making through:

Setting achievable goals

If benchmarks show you lag behind competitors in email open rates, you can set realistic goals for improvement. Blindly choosing a goal without competitive context risks over/under-shooting.

Allocating budget efficiently

Knowing which metrics you lead or lag in helps optimize budget. If social media engagement is below-average you can direct more spend to social campaigns.

Identifying successful tactics

Benchmarking uncovers what tactics work best. If analysis shows a landing page converts 2x more than yours, you can model its design.

Informing strategy

Seeing weak points through benchmarking lets you craft targeted strategies. You might boost SEO investment to improve web visibility.

Tracking improvement

Benchmarks create a baseline to measure progress against. You can quantify the success of activities by comparing before/after performance.

Simply put, benchmarking helps make better marketing decisions grounded in data, not guesswork.

Step-by-Step Guide to Marketing Benchmarking

Follow these six steps to benchmark your marketing performance successfully:

1. Identify What to Benchmark

First, determine which metrics to benchmark. Assess what factors are most important for success and directly impact key objectives like revenue and growth.

Typically important metrics include:

• Sales and revenue
• Web traffic
• SEO rankings
• Social media reach/engagement
• Email clickthroughs
• Cost per lead
• And more…

Prioritize benchmarking 3-5 metrics that:

• Align to business goals
• Have accessible benchmark data
• You can influence through marketing

Avoid vanity metrics like social media followers that lack direct business impact.

2. Determine Benchmark Sources

Next, identify appropriate sources for benchmark comparison:

• Industry averages – Associations like DMA regularly compile benchmark data across sectors.
• Competitors – Research their reported metrics through press releases, interviews etc.
• 3rd party research – Marketing reports frequently include competitive analysis.
• Your own data – Look at historical performance to benchmark against.

Ideally, utilize both your own past data alongside industry/competitor benchmarks.

3. Compile Competitor Info

Thoroughly research main competitors to benchmark against. Compile key information like:

• Company size/revenue
• Marketing strategies and campaigns
• Marketing budget
• Market share
• Business model
• Product range

Look for public information on their performance and results. Annual reports, press releases, and exec interviews often contain useful benchmark data.

4. Set Measurable Goals

Define clear goals for what you want to achieve in each benchmarked metric. Derive realistic targets based on:

• Current performance
• Competitor benchmarks
• Industry averages
• Historical trends

Set S.M.A.R.T goals that are Specific, Measurable, Achievable, Relevant and Time-bound.

For example, you may set goals to:

• Increase conversion rate by 25% in 6 months
• Reduce cost per lead by 30% in 1 year
• Lift web traffic 15% by Q4

Well-defined goals give direction to benchmarking analysis.

5. Create Action Plans

Formulate specific plans to hit the benchmark goals set. This should outline:

-Tactics to deploy
-Timeline
-Budget/resource allocation
-Owner accountability

For example, if aiming to reduce cost per lead, action plans may include:

• Shift budget from print to digital ads
• Refresh landing page design to optimize conversions
• A/B test email subject lines

Get input from across the marketing team when shaping plans.

6. Continuously Monitor and Optimize

Track benchmark metrics on an ongoing basis. Look at:

• Current performance vs. goals
• Trends over time
• Changes vs. competitors
• Impact of marketing initiatives

Course correct in response to insights. Double down on what works and swiftly optimize ineffective activities.

Ongoing monitoring ensures you continuously align marketing to benchmarks. Refresh formal deep dive benchmarking quarterly or bi-annually.

Benchmarking Best Practices

Follow these tips to maximize the value of benchmarking efforts:

• Choose metrics tied to revenue/profit – Benchmark against factors that directly impact the bottom line.

• Limit vanity metrics – Social followers or web visits offer little value. Focus on engagement and conversions.

• Use comparable data – Only benchmark against companies of similar size, industry, budget etc.

• Consider qualitive factors – Benchmark subjective elements like brand awareness through surveys too.

• Look beyond competitors – The wider industry can provide more robust benchmark data in some areas.

• Set context – Share insights on business model, market dynamics etc alongside benchmarks to aid analysis.

• Automate tracking – Use tools like Google Analytics, SEMRush and Hootsuite to efficiently monitor benchmarks.

• Segment data – Drill-down on performance by factors like channel, campaign, demographic etc.

• Make benchmarking collaborative – Get insights from across the marketing team and wider business when interpreting data.

Benchmarking Metrics and KPIs

Here are some of the key performance indicators you should consider benchmarking:

Sales and Revenues

• Revenue growth %
• Sales per marketing spend
• Monthly/annual sales

Web Traffic and Engagement

• Site visitors
• Bounce rate
• Pages per visit
• Time on site
• Traffic sources

Search Engine Optimization

• Organic traffic %
• Keyword rankings
• Backlinks

Paid Advertising

• Cost per click
• Clickthrough rate
• Impressions
• Conversions

Email Marketing

• Open rates
• Clickthrough rates
• Conversion rates
• Unsubscribe rate

Social Media

• Follower growth
• Engagement rates
• Clickthrough rate
• Cost per follower

Lead Generation

• New leads
• Cost per lead
• Sales qualified leads %
• Lead to customer %

Brand Awareness

• Brand search volume
• Social mentions
• Brand recall survey responses

Leveraging Benchmark Data

The real value in benchmarking comes from how you apply insights uncovered.

Here are some examples of how to leverage benchmark findings:

• Improve low conversion rates – If benchmarking shows your website conversion trails rivals, focus on landing page optimization and testing to lift performance.

• Refine spending – When cost per lead is higher than industry average, shift budget away from ineffective channels to more efficient options.

• Highlight successes – Benchmarking metrics where you lead competitors can help secure more budget/resources internally.

• Inform strategy – Weak social engagement metrics could trigger an improved content strategy to drive more interest.

• Set employee goals – If call center response times are slow versus peers, make this an area for improvement in staff objectives.

• Guide hiring – Lagging SEO metrics may push you to recruit an expert to lift performance.

• Allocate budget – Leading paid search clickthrough rates but low social reach suggests investing more into social activity.

• Revise forecasts – Top quart