{"id":118020,"date":"2022-04-18T08:59:32","date_gmt":"2022-04-18T08:59:32","guid":{"rendered":"https:\/\/www.similarweb.com\/corp\/?p=118020"},"modified":"2025-04-02T10:03:35","modified_gmt":"2025-04-02T10:03:35","slug":"external-benchmarking","status":"publish","type":"post","link":"https:\/\/www.similarweb.com\/blog\/research\/business-benchmarking\/external-benchmarking\/","title":{"rendered":"External Benchmarking: How Does Your Business Compare?"},"content":{"rendered":"

How do you assess business success? Let\u2019s say Nike<\/a> just dropped a new running sneaker and sales are up this quarter. Successful, right? But what if Adidas<\/a> also launched its own running sneaker at around the same time, outperforming Nike in sales. Would you still consider Nike\u2019s sneakers a success? The truth is you won\u2019t be able to measure the success of any brand, your own included, without comparing it to industry averages and competitors. In other words, you need to see how good you are against the rest. Enter benchmarking<\/a>.<\/p>\n

What is external benchmarking?<\/h2>\n

External benchmarking is a realistic view of your business in the race for success. If you keep up a consistent pace of, let\u2019s say, five miles per hour, but your competitors ran twice that speed, you\u2019ve found yourself facing the sharp truth of external benchmarking. A valuable form of benchmarking, it compares your performance to the performance of those similar to you and if used wisely, helps you pinpoint areas for improvement.<\/p>\n

Let\u2019s say you produce a show for netflix.com<\/a>. You\u2019d want to know how your show performs compared to competitors so you\u2019d benchmark your traffic against others and make a note of the top Netflix shows<\/a>.<\/p>\n

\"Netflix\u2019s<\/p>\n

But if the external benchmarking definition considers anything, it\u2019s specificity<\/strong>. You can\u2019t compare your general business performance to any other similar company without considering a comparable cohort. In other words, you have to find commonly measured metrics<\/strong> between two companies before conducting research into a general comparison.<\/p>\n

So, we\u2019ve covered a couple of general external benchmarking examples. But let\u2019s narrow the scope and look at tangible external benchmarking examples with a focus on competitive benchmarking<\/a> for your business.<\/p>\n

3 examples of external benchmarking<\/h2>\n

1. Product benchmarking<\/h3>\n

If you can\u2019t access competitor data, why not take a piece of their product? Product benchmarking entails purchasing a competitor product similar in price, size, and purpose to your own offerings.<\/p>\n

Once you have both products in hand, you can measure all sorts of things for external benchmarking \u2013 when to start, runtime, efficiency, weight, price, design \u2013 you name it.<\/p>\n

2. HR and salary benchmarking<\/h3>\n

Do you pay your employees too much? Not enough? Or just the right amount? Salary benchmarking helps you compare your offered salaries to industry averages within a certain geographic region. If you find that your salaries are consistently higher than industry averages, you better hope that the output you’re getting is comparable.<\/p>\n

Salary benchmarking helps companies maintain appropriate labor budgets and employee engagement.<\/p>\n

3. Financial performance benchmarking<\/h3>\n

Companies should compare their financial performance with competitors. This includes overall revenue, expenses, and profits. While competitors might not hand this information over easily, you can access it through publicly available information, such as annual financial reports.<\/p>\n

Get an edge with Similarweb<\/h2>\n

External benchmarking can be pretty difficult if you don\u2019t have the right tools at your disposal. A lot of important data is simply unattainable, and without these digital insights, it\u2019s impossible to know how you compare.<\/p>\n

Similarweb benchmarking tools<\/a> allow you to perform external benchmarking in just a few clicks, using the most granular and fresh data that\u2019s constantly being updated in real-time.<\/p>\n

Here are some handy features you should be using when performing external benchmarking research:<\/p>\n