Through benchmarking, companies can determine where they stand among their peers or rivals within their industry.

The ability for a company to adapt, develop, and prosper in the face of change is its competitive edge. By looking at what other businesses do, and contrasting the results of one company's performance versus another, companies can pinpoint areas that can be improved and achieve higher success rates than before.

The 4 Types Of Benchmarking Used In Business

Benchmarking can be divided into four categories: internal, external, Practice, and performance.

1. Internal benchmarking compares performance metrics and processes in place across the company's departments, projects, units and different activities. It is a great way to learn about the actual and expected norms of business performance.

2. External benchmarking compares performance metrics and methods of one company to another. Even though it requires a lot of time and work, this strategy may be quite beneficial. Being aware of your business current situation enables you to evaluate and plan growth objectives.

3. Practice Benchmarking entails collecting and comparing qualitative data on how an activity is carried out through individuals, structures, and systems. Process mapping is an example of a conventional way to gathering and comparing qualitative data. As a result, companies gain more visibility on how and where performance gaps happen, and conclude guidelines that could be passed on to other business units.

4. Performance benchmarking is typically used by companies as their initial method of discovering the performance differences that exists. It's based on collecting and comparing quantitative data that helps with decision-making. However, standard metrics, KPIs, as well as data extraction and analysis tools are necessary to perform this type of benchmarking.

The benefits of Benchmarking Your Business Activities

1. Competitive Analysis:

Companies frequently get stuck because they are unaware of their potential. A competitive analysis will show you where your organization stands, where its weaknesses are, and how to address them. By comparing your performance to that of the competition, you can make smart changes that might boost your growth.

2. Evaluate Progress:

Depending on your goals, benchmarking includes evaluating existing patterns in data sets and predict future ones. If your brand is thriving, it should be a continuous process. Performance should actively be tracked to make sure that success carries over to the next stages of business development.

3. Purpose and Motivation:

Once the benchmarking exercise is over, managers introduce more challenging and exciting goals. Otherwise, employees' motivation will decline if these goals are unrealistic, which will slow down progress, regardless of how much effort is invested.

4. Promote Responsibility:

Companies should raise critical questions when evaluating their methodologies and metrics. This requires speaking with employees and identifying each person's role for ownership to be appointed across all business units.
By asking insightful questions, we can learn how much passion employees have in what they do, which helps them perform better.

Social Media Benchmarking

Social media benchmarking enables you to monitor your performance and evaluate it against that of your rivals or the entire industry. Conducting one essentially requires answering two important questions:
How effective is our social media approach, and what can we change to make it even better?

Periodical social media benchmarks help you:
• Track the latest business trends.
• Discover your competition' social media tactics.
• Develop a better content strategy that appeals to your audience.
• Control your advertising budget.
Technology advancements, the availability of different tools and online platforms have made it possible for you to perform social media analysis, evaluate different techniques, and take the right actions.

Social media experts use these tools to determine how they stand in comparison to leading companies in their respective industries, to learn about what they are doing on social media, and monitor the effectiveness of each of their business social media platform.

Below a simple framework to use for a social media competitive analysis:

1. Determine your social media goals and requirements.
2. Pick a platform and select the aspects you want to analyze (Design, trends, content, audience type, engagement, etc.)
3. Outline insightful ideas and industry-specific solutions.
4. Write a report that lists the results and key metrics.
5. Decide on your success criteria.
6. Create an action plan and schedule the activities you expect to perform.

Why Should Management Value Benchmarking?

A crucial stage in any growth process is assessing your strengths and weaknesses. Benchmarking is a convenient method that allow you to evaluate and improve practically any area of your organization.

The competitive analysis gives you a clear view on the key aspects that needs to be changed or developed. This way, customers would be more inclined to select a product from your business than from a competitor.

You know it is time to change your approach if you're getting left behind the competition or the industry standards.

Key Takeaways

In the end, benchmarking is about understanding why others are better at something, and finding out a way to compete with or even outperform them.
If you don't look outside of your own workplace, department, or organization, you'll never learn that lesson.

Making simple changes and using available information to your advantage can lead to big results.
Discover how to easily create business and social media benchmarks and gain strategical insights for your brand with