In digital marketing, a benchmark is a standard you use to measure performance against comparable industry metrics. Measuring your performance against industry benchmarks helps you determine your brand’s strengths and areas for improvement.
Benchmarking works by analyzing specific key performance indicators (KPIs) to set standards for your business. There are 3 main types of benchmarking:
- Competitor benchmarking: compares your business performance to your closest competitors
- Peer benchmarking: compares your business performance to an anonymized sample of your industry peers
- Industry benchmarking: compares your business performance to other brands in your overall industry
How to benchmark your brand against your peers
Here we’ll focus on peer benchmarking as a way to get started with comparing your performance to other businesses that are similar to yours.
Use this type of benchmarking when you don’t have access to data from your competitors but want to know how similar brands in your industry perform so you can make informed choices for your own marketing strategy.
Here’s how to benchmark your brand against your peers:
1. Choose a marketing automation platform that offers benchmarking
Some marketing automation platforms use anonymized data to tell you if your messages are performing better or worse based on what similar companies are seeing for results.
Good benchmarking data includes metrics like click rate, conversion rate, opt-out rate, open rate, and revenue per recipient.
2. Define KPIs
Choose which key performance indicators (KPIs) you want to create a benchmark for. For example:
- If you want to compare customer satisfaction, find out your peers’ repeat purchase rate or customer retention rate.
- Look at your peers’ click rate to determine their SMS engagement on flash sales.
- Check your peers’ YoY conversion rate to gauge their BFCM performance.
3. Compare your data
Compare your business performance data to your peers’ KPIs based on the anonymized data you have access to. If your peers are performing better, set their KPI scores as a new benchmark to accomplish and build an action plan to improve. For example, you can do this by:
- Offering exclusive deals to encourage repeat purchases and improve your customer retention rate
- Personalizing your SMS campaigns to achieve better engagement on flash sales
- Developing a thorough BFCM strategy to boost your YoY conversion rate
Ready to find out how your brand fares against businesses similar to yours? Use Klaviyo’s benchmarks to compare your KPIs against the industry median within one dashboard. Klaviyo automatically displays the strongest and weakest metrics to help you focus on data that truly matters.
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