Benchmarking: What it is and how to apply it to your strategy

Benchmarking is a systematic process of comparing the most important aspects of your company with those of other leading companies in the industry.

Its main objective is to identify best practices, understand how they operate and adapt them to your own organization to improve performance and efficiency.

Types of benchmarking

1. Internal Benchmarking

It consists of comparing processes and practices within the same organization, between different departments or business units.

2. Competitive Benchmarking

It focuses on comparing your company with direct competitors. It is especially useful for identifying where they stand out and what strategies they employ .

3. Functional Benchmarking

This is where you compare similar roles across different industries. For example, you could analyze the customer service practices of a company in a completely different industry than your own.

4. Generic Benchmarking

This type focuses on comparing operational processes regardless of the industry. It looks for best practices anywhere and adapts them to your needs.

5. UX Benchmarking

It focuses on improving user experience by analyzing and comparing how other organizations design, use and optimize their platforms for user interaction.

How to do effective benchmarking?

1. Planning

Clearly define what you want to achieve with benchmarking and what type you will use. Establish the objectives and criteria for comparison.

2. Data Collection

Use analytics tools to gather qualitative and quantitative information about your competitors and the aspects to be compared. Tools like Similarweb, Ahrefs and Google Trends can be very useful at this stage.

3. Data Analysis

Organize and analyze the information collected . Use graphs, charts, and mind maps to identify trends, gaps, and opportunities for improvement.

4. Implementation

Adapt the best practices identified in your organization. Establish an action plan with a timeline to implement the necessary changes.

5. Monitoring and Evaluation

Continuously monitor the results of implemented improvements and adjust your strategy as needed. Measure KPIs to ensure you are achieving the desired goals.

Examples of successful benchmarking

Xerox case

Xerox was one of the first companies to successfully implement benchmarking. In the 1980s, they faced intense competition that drastically reduced their market share.

They implemented a benchmarking program to reduce costs and improve quality, which allowed them to identify and overcome many of their operational weaknesses.

Advantages of benchmarking

1. Opportunity Identification : Detect trends and take advantage of opportunities before the competition.
2. Knowledge of Strengths : Identify strong areas and possible expansions.
3. Position Assessment : Know your position in the market and adjust strategies.
4. Continuous Improvement : Facilitates continuous improvement through the implementation of best practices.

Benchmarking: Key Tools

Similarweb

It offers you data similar to Google Analytics, such as visits and time spent on the website, and shows page rankings.

Ahrefs

Ideal for analyzing referral links and the domain authority of your website and that of your competitors.

Google Trends

It allows you to compare interest in different brands or products and apply filters to obtain relevant information.

Applying benchmarking to your strategy

Implementing benchmarking may seem challenging at first, but with proper planning and the use of the right tools, you can transform the way your business operates.

Adapt identified best practices, maintain constant monitoring and adjust your strategy to ensure continued and sustainable growth.

Benchmarking not only helps you better understand your competition, but also provides clear guidance to improve your own processes and achieve success in the market.

Written by Moises Hamui Abadi : I am an entrepreneur, founding partner of Viceversa and SoyMacho. After leading several digital businesses and advising several other businesses, I decided to form MHA Consulting, a digital marketing consultancy dedicated to growing and empowering digital businesses in more than 7 countries and generating more than 1,500 million pesos.