{"id":116618,"date":"2022-04-04T06:40:01","date_gmt":"2022-04-04T06:40:01","guid":{"rendered":"https:\/\/www.similarweb.com\/corp\/?p=116618"},"modified":"2025-09-07T13:48:24","modified_gmt":"2025-09-07T13:48:24","slug":"ultimate-guide-benchmarking","status":"publish","type":"post","link":"https:\/\/www.similarweb.com\/blog\/research\/business-benchmarking\/ultimate-guide-benchmarking\/","title":{"rendered":"What Is Benchmarking: The Ultimate Guide"},"content":{"rendered":"

Comparison is part of human nature. Think about the last time you ate a burger. Was it tasty? How tasty? You can only decide how good the burger was by comparing it to others you\u2019ve eaten.<\/p>\n

Comparison helps us understand relationships and make quality judgments. We compare different products (like burgers), and elements in our environment (like night versus day), and even compare ourselves to peers to determine our own merits (though maybe we should do less of this one).<\/p>\n

Let\u2019s face it, we\u2019re benchmarking everything all the time! While you may not call it benchmarking when you eat a burger and think it wasn\u2019t quite as delicious as the last one, it\u2019s exactly what you were doing. Who knew you were already such a benchmarking expert?<\/p>\n

Now that we\u2019ve got the basic benchmarking definition out of the way, it\u2019s time to focus on benchmarking in business, its benefits, the different types, and how it\u2019s done. So sit down and buckle up, because here we go!<\/p>\n

What is benchmarking, and what does it mean in business?<\/h2>\n

Benchmarking is defined as the process of comparing and measuring different businesses\u2019 activities and performances. It\u2019s a great way to evaluate performance, determine industry best practices, and identify opportunities for improvement.<\/p>\n

Studying other companies that may have superior performance will give you insight into their activities, processes, goals, and metrics. By comparing your findings to your brand\u2019s performance, you can set realistic goals and create a plan to achieve them.<\/p>\n

What are the benefits of benchmarking?<\/h2>\n

There are numerous benefits of benchmarking<\/a>. Not only will you understand your competitors, but you\u2019ll also be able to:<\/p>\n

1. Spot trends and opportunities:<\/strong> Being able to identify trends<\/a> can keep you from getting blindsided by a shift in your industry. With benchmarking, you\u2019ll know exactly what your competitors are doing and be able to make the most of opportunities in real time.<\/p>\n

Pro Tip:<\/strong> The Similarweb Identify Industry Trends tool will allow you to analyze how demand and interests change in your industry.<\/em><\/p>\n

\"Similarweb<\/p>\n

2. Know your potential:<\/strong> Do you know what similar companies are achieving? What\u2019s realistic for you to achieve? Benchmarking can help you understand your growth potential and identify areas where you can expand.<\/p>\n

Pro Tip:<\/strong> Use the Similarweb Analyze Industry Leaders tool to see your top-performing competitors\u2019 achievements and benchmark your potential.<\/em><\/p>\n

\"Similarweb<\/p>\n

3. Track your market position<\/a>:<\/strong> It\u2019s important to understand how you compare to competitors. Benchmarking can reveal your position in the market<\/a> and analyze the competitive landscape<\/a>. Monitoring market changes will let you know if your activities are successful or if you need to pivot.<\/p>\n

Pro Tip:<\/strong> Tap into the Similarweb Industry Overview tool to get a bird\u2019s eye view of your industry and industry-wide metrics.<\/em><\/p>\n

\"Similarweb<\/p>\n

4. Improve strategic planning and goal-setting:<\/strong> Basing your strategic planning and goal-setting on benchmarks ensures that you\u2019re working toward relevant and realistic goals.<\/p>\n

What are the different types of benchmarking?<\/h2>\n

There are several types of benchmarking<\/a> and each is important for your business.<\/p>\n

\"7<\/p>\n

Competitive:<\/strong> Competitive benchmarking<\/a> is about staying on top of what your competition is doing. Let\u2019s say your company is developing software and all your competitors suddenly develop a similar feature \u2013 you\u2019d be wise to tap this trend and develop this feature too.<\/p>\n

Strategic:<\/strong> Strategic benchmarking<\/a> is the process of understanding which business models are best for strategic success. Prime example: If an organization is looking to develop a new marketing strategy, it may benchmark against the digital marketing strategies<\/a> of companies it admires.<\/p>\n

Performance:<\/strong> Performance benchmarking<\/a> includes collecting quantitative data<\/a> and other key performance indicators. A performance benchmark analyzes a company\u2019s revenue, costs, or number of sales. Performance benchmarks can be made by looking at your own company\u2019s data or competitors\u2019.<\/p>\n

Digital:<\/strong> Digital benchmarking<\/a> is performance benchmarking for web activity. It can help you assess your activity\u2019s impact and potential. For example, you might benchmark your engagement rate<\/a>, bounce rate<\/a>, or amount of unique visitors<\/a> to determine whether these metrics align with industry standards.<\/p>\n

Practice:<\/strong> Practice benchmarking evaluates practices and processes for optimization. It can include looking at processes or workflows within your organization, or at how competitors complete similar activities. Let\u2019s say you\u2019re experiencing delays in posting regular content on your website. You can benchmark your content creation and approval process to identify areas of improvement in your content marketing strategy<\/a>.<\/p>\n

Internal:<\/strong> Benchmarking is not only against the competition. You might do internal benchmarking<\/a> to compare similar time periods in the past and future or compare different projects or departments.<\/p>\n

External:<\/strong> External benchmarking<\/a> is about analyzing areas outside your business. These could be competitors, industry standards, or anything else that might be relevant. Competitive, strategic, and digital are generally forms of external benchmarking.
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How do you do benchmarking?<\/h2>\n

You already know the concept of benchmarking. Now let\u2019s break down how it\u2019s done.<\/p>\n

1. Plan<\/h3>\n

Your first step is to decide exactly what you\u2019re looking for and why you\u2019re benchmarking. Here you can decide which type of benchmarking you\u2019ll use, the subject of your benchmarking, and what you plan to do with your benchmark.<\/p>\n

Start by deciding if the benchmark is internal or external. If it\u2019s internal, you need to pick which processes, practices, or metrics you\u2019ll analyze. If it\u2019s external, which companies will you look at?<\/p>\n

Next, you want to understand the purpose of the benchmark. Are you looking to improve something? Create a new goal? Better your understanding of the market?<\/p>\n

Answering all of these questions will help you focus on collecting relevant information while you benchmark.<\/p>\n

Read More – The 6 Benchmarking Questions Every Organization Needs to Ask<\/a><\/p>\n

2. Collect<\/h3>\n

Now that you know what you\u2019re looking for, it\u2019s time to gather data.<\/p>\n

If you\u2019re creating an internal benchmark, you\u2019ll look to your employees, colleagues, and website analytics tools<\/a> to provide qualitative and quantitative information about the topic of your benchmark. If it\u2019s an external benchmark, you\u2019ll start researching competitors.<\/p>\n

External benchmarking can be challenging because many companies don\u2019t make their data public. Get creative to get the answers you need. For example, you could put yourself through your competitors\u2019 sales funnels<\/a> to understand their processes, focus, and how they nurture their leads<\/a>. You could also talk to your competitors\u2019 customers or maybe even their former employees to find out about their experiences.<\/p>\n

If you\u2019re looking for quantitative data such as performance or digital metrics, you can use tools such as the Similarweb Market Intelligence Platform<\/a> to gather insights not available elsewhere.<\/p>\n

\"Similarweb<\/p>\n

At this point, you want to collect as much data as possible. Write everything down and keep every piece of information you gather because you may not realize what\u2019s important yet.<\/p>\n

3. Analyze<\/h3>\n

Once you feel you\u2019ve exhausted all avenues for acquiring data, it\u2019s time to organize and analyze. If you\u2019re performing quantitative market research<\/a> by analyzing quantitative data, create graphs or charts that will allow you to easily compare the data points.<\/p>\n

Plot your own metrics on the same graph as your competitors\u2019 metrics to see how you stack up, and for qualitative data<\/a>, review for themes or interesting ideas that stand out. You can create diagrams or mind maps to organize the information and highlight pertinent points. If you\u2019re analyzing processes, simply map them and look for any bottlenecks or opportunities for streamlining. You can even map similar processes together to analyze for differences and ideas for improvements.<\/p>\n

Organizing all your data will help you identify trends, gaps, opportunities, and themes, not to mention gain a great understanding of your company\u2019s position overall.<\/p>\n

Here\u2019s a quick example. Using Similarweb Website Performance, let\u2019s benchmark popular brand websites target.com, walmart.com, and kohls.com.<\/p>\n

\"Website<\/p>\n

Unsurprisingly, industry mogul walmart.com leads in monthly visits<\/a> and unique audience. Interestingly, kohls.com sets the standard in terms of visit duration, pages per visit, and bounce rate. All three of those metrics are key in determining the quality of traffic a website receives.<\/p>\n

So, in this case, if you were target.com, you\u2019d want to look at how both of those competitors are driving traffic. Walmart.com\u2019s marketing channels<\/a> are driving higher quantities, but kohls.com\u2019s channels are driving higher quality traffic<\/a>.<\/p>\n

This information will not only give target.com a good way to compare its own traffic metrics but also help the team dig into opportunities to improve.<\/p>\n

4. Implement<\/h3>\n

You probably came up with tons of ideas while analyzing your data. Maybe you saw a process that could easily be streamlined or noticed metrics that were ripe for improvement, or you identified a useful strategy from a competitor that you\u2019re eager to try out. That\u2019s all great!<\/p>\n

Now you need to put your findings into action. This means developing a list of action items you\u2019d like to implement. You\u2019ll have to prioritize and figure out which changes will bring about the most benefit for your organization. You might want to chart all the opportunities you identified to determine which to implement, based on which will bring the most value for the effort required.<\/p>\n

\"Tons<\/p>\n

Don\u2019t worry if you can\u2019t implement all your activities at once. Choosing a few to focus on will actually improve your likelihood of success. You can also come back to other opportunities when you have the bandwidth.<\/p>\n

5. Monitor<\/h3>\n

So, was your benchmark successful? You\u2019ll only know by monitoring. Are you set to reach your goals? If not, go back to your analysis and figure out what to change. You also want to keep monitoring your benchmark to see changes in the data.<\/p>\n

Different types of data may require different frequencies for monitoring. For example, processes or strategies can probably go a few quarters without being looked at, but digital and performance metrics should be checked more often.<\/p>\n

What tools can I use for benchmarking?<\/h2>\n

A sound benchmark requires tools that provide reliable and timely data. Similarweb has multiple tools that can help you create top-notch benchmarks:<\/p>\n