What is benchmarking
Also known as: benchmark, competitive benchmarking
Benchmarking is the process of comparing a company's processes, results and practices with references, which may be competitors, companies in other industries or other areas of the company itself, to find what can be improved and how. The goal is not to copy: it is to understand why the reference gets a better result and adapt what makes sense for your own reality.
An online store takes five days on average to deliver in its home city. It compares its process with three stores that deliver in two days and finds the difference is not the carrier but order picking, done once a day.
The store starts picking orders twice a day and changes its pickup time. Delivery drops to three days without switching suppliers. The comparison showed where to look; the solution was adapted to the store's own structure.
Types of benchmarking
| Useful for | |
|---|---|
| Competitive | Comparing product, price, service and communication with direct competitors |
| Functional | Learning a process from companies in other industries that excel at it |
| Internal | Comparing units, teams or periods within the company |
| Performance | Comparing numbers, such as conversion rate or cost per customer, with market averages |
How to do it
- Choose what to compare: a process or number that matters to the business.
- Measure where the company stands today, with data.
- Pick references that make sense by size, audience or process.
- Gather information from public sources, customers, suppliers or partnerships.
- Understand the gap: what the reference does differently, and why.
- Adapt, test and measure again.
Benchmark numbers: be careful
Market averages, such as an industry's conversion rate or cost per click, help place a company, but they mislead easily. Each source measures differently, with different samples and periods, and the average lumps together very different businesses. The most reliable comparison is usually with your own history and with references whose method you know.
How not to become a copy
Copying a competitor's site, price or campaign transfers another company's strategy to yours, without the conditions that make it work. Useful benchmarking asks why a practice works there, and whether the same reason exists here. Often the lesson comes from a company in another industry that solved the same problem in a way nobody in your market has tried.
The classic methodology
Robert Camp, author of one of the earliest books on the subject, in 1989, organized benchmarking into 12 stages, from selecting the subject and process to setting goals and implementing. The logic boils down to measure, compare, understand, adapt and measure again.
Frequently asked questions
What is benchmarking?
Comparing a company's processes, results and practices with market or cross industry references to find what to improve.
What are the types of benchmarking?
The most common are competitive, functional, internal and performance benchmarking, depending on who and what you compare.
Is benchmarking copying the competition?
No. It is understanding why the reference gets a better result and adapting what makes sense for your situation.
Can I trust market averages?
Carefully. Each source measures differently, and averages mix different businesses. Your own history is the most reliable comparison.
How often should I benchmark?
Whenever you face an important decision and, lightly, once or twice a year for the business's core processes and numbers.
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Rodrigo Fávaro
Founder of ROO3, a marketing and technology agency in São José do Rio Preto, Brazil. Builds AI products running in production (Tobia, gerar.app, Pense Mercado) and maintains the AI Benchmark, a public ranking of AI models.
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