The term benchmarking started with shoemakers, who asked their customers to put their feet on a bench where they were marked to serve as a pattern for cutting leather. But of course, feet are absolute things. They are a certain size and that’s all there is to it. Benchmarking has since been adapted to a more qualitative context.
For example, let’s take digital marketing maturity. How does one measure how good a company is at connecting with customers online? We all have our opinions, and I suspect, just like those little Wobegonians, most of us think we’re above average, But, of course, we all can’t be above average, so somebody is fudging the truth somewhere.
I have found that when we work with a client, benchmarking is an area of great political sensitivity, depending on your audience. Managers appreciate competitive insight and are a lot less upset when you tell them they have an ugly baby (or, at least, a baby of below average attractiveness) then are the practitioners who are at the front lines. I personally love benchmarking, as it serves to get a team on the same page. False complacency vaporizes in the face of real evidence that a competitor is repeatedly kicking your tushie all over the block. It grounds a team in a more objective view of the market place and takes decision making out of the vacuum.
But before going on a benchmarking bonanza, here are some things to consider:
Weighting is ImportantIt’s pretty easy to assign a score to something. But it’s more difficult to understand that some things are more important than others. For example, I can measure the social maturity of a marketer based on Facebook likes, the frequency of Twitter activity, the number of stars they have on Yelp or the completeness of their Linked In Profile, but these things are not equal in importance. Not only are they not equal, but the relative importance of each social activity will change from industry to industry and market to market. If I’m marketing a hotel, TripAdvisor reviews can make or break me, but I don’t care as much about my number of LinkedIn connections. If I’m marketing a movie or a new TV show, Facebook “Likes” might actually be a measure that has some value. Before you start assigning scores, you need a pretty accurate way to weight them for importance.
Be Careful Who You’re Benchmarking AgainstIf you ask any marketer who their primary competitors are, they’ll be able to give you 3 or 4 names off the top of their head. That’s the obvious competition. But if we’re benchmarking digital effectiveness, it’s the non-obvious competition you have to worry about. That’s why we generally include at least one “aspirational” candidate in our benchmarking studies. These candidates set the bar higher and are often outside the traditional competitive set. While it may be gratifying to know you’re ahead of your primary competitors, that will be small comfort if a disruptive competitor (think Amazon in the Industrial supply category) suddenly changes the game and blows up your entire market model by resetting your customer’s expectations. Good benchmarking practices should spot those potential hazards before they become critical.
Keep ObjectiveIf qualitative assessments are part of your benchmarking (and there’s nothing wrong with this) make sure your assessments aren’t colored by internal biases. Having your own people do benchmarking can sometimes give you a skewed view of your market. It might be worthwhile to find an external partner to help with benchmarking, who can ensure objectivity when it comes to evaluation and scoring.
And finally, remember, everybody is above average in something…
Originally published in Mediapost’s Search Insider September 13, 2012Biography / Resume : Gord Hotchkiss is the founder and senior vice president of
Enquiro, now part of
Mediative. He is renowned in the industry for his expertise when it comes to understanding online user and search behaviour. He and the Enquiro team have built a solid reputation for being the leading experts when it comes to understanding what happens on a search portal and why. Before Enquiro, Gord was chairman and director of SEMPO (The Search Engine Marketing Professional Organization), he worked as a columnist for MediaPost and Search Engine Land, and he was a regular speaker at industry conferences and events. Gord is also the author of The BuyerSphere Project: How Business Buys from Business in a digital marketplace.