Everyone loves a good benchmark. And why not? To paraphrase Alistair Kroll, author of Lean Analytics, “you don’t know if you’re crushing it or being crushed” unless you have a line in the sand. Benchmarks are the inspirational lines that encourage you to identify areas for improvement, set clear objectives, and improve performance over time. They also serve as critical proof points when you have to demonstrate the need for new staff, a change to your media plan, or a boost to your marketing budget.
Sadly, some marketers set unreasonable goals (or haven’t set goals in the first place) because they’ve failed to benchmark accordingly. Many different factors sway digital marketing metrics. To successfully rank performance, you must account for each one.
So, if you’re still struggling to set the bar for your digital marketing efforts, read on. We’ve identified the advantages and pitfalls of three common benchmarks to help you do just that.
Industry benchmarks compare performance metrics to industry bests from other companies and organizations. However, comparing yourself to others may not be the best benchmarking strategy.
MailChimp, for example, regularly publishes an exhaustive, industry-segmented list of its customers’ average email metrics. But before you draw parallels between it and your own email campaign performance, consider that MailChimp’s customer base is 15-million users strong. Even when you break their stats down by industry, the results may be too broad to provide meaningful benchmarks to niche businesses or outliers.
Let’s say you have a B2B business that provides corporate training and leadership programs to Fortune 500 companies. Your natural instinct may be to choose MailChimp’s “education” category as the industry from which to make comparisons. But education may mean anything from Ivy league universities serving prospective undergrads to cosmetology schools offering beauty licenses to locals. Neither of which has a thing in common with your training company and its corporate email subscribers.
In general, industry benchmarks are an acceptable way to gauge how your digital marketing channels are doing. But be sure to examine whether you are pitting yourself against actual peers. “Industry” and “relevancy” are not necessarily one-and-the-same. Differences in products, target markets, and geography can skew your benchmarking strategy.
We all want to know how we stack up against the competition. And if you’d like easy-to-obtain competitor information, a tool or agency specializing in search engine optimization can give you the lowdown on competitor keywords, PPC campaigns, and overall website performance. Some can even compare your share of voice to that of your closest rivals.
Still, some competitor metrics are easier to come by than others. SEO and social media-driven data are available for public consumption if you know where to look. But many of the more insightful key performance indicators (conversion rates, ROI, or lifetime customer value) will be next-to-impossible to find.
Another common pitfall of competitive benchmarking is the potential for faulty comparisons. Imagine you own Wicked Apple Buttah, a Massachusetts retailer that sells only organic apple butter. Now, let’s say that Whole Foods is your chief competitor. Unlike Wicked, Whole Foods offers a range of organic produce to consumers across the country. Benchmarking your website traffic against theirs would be unrealistic at best. At worst, it would signal a level of overconfidence that would make Bill Belichik blush.
Competitive benchmarks offer valuable insights about the opposition. But they are not always the best points of comparison if you require data that isn’t public or lack “apple-butter-to-apple-butter” competitors. For genuinely comprehensive analyses, you very well may need to look within.
Some of the most useful benchmarks you’ll find will be the ones that come from your very organization. Whether you’re examining average website traffic, social media engagement, or ROI; historical data offers the 3Rs of excellent benchmarking. It’s relevant, reliable, and realistic.
Not only can you drill into internal reports for dozens of figures you won’t otherwise find, but you also gain the context that external benchmarks by industry and competitor lack. You can factor in anomalies like budgetary constraints, surpluses in revenue, and even seasonality to determine when it makes sense to raise the bar and when it makes sense not to.
If you haven’t set historical benchmarks, yet, start with averages from past reports and a simple goal set up and to the right. Once you’ve got that down, move on to competitors and industry peers to see where your performance lands in the broader digital marketing landscape. If you’ve exceeded those benchmarks, identify new ones and set smarter goals while you’re at it. Remember that there are always new sights to set, more sand-drawn lines, and fresh goals to crush.