Put simply, benchmarking is the process of comparing one’s performance against the standard or “benchmark” of your industry vertical, the performance leaders, and/or yourself. The purpose of benchmarking is to see how you are performing in relation to others. Are you behind, level with, or ahead of your benchmark?
As a society, we benchmark everything. For example, is your baby the proper weight for his age? We compare that with the benchmark, or the typical average among similar babies, along with other factors. The same is true with businesses.
When we use benchmarks, we keep several things in mind.
- What are the goals? Specifically, what are the micro-goals and what is the main goal that your executives are going to care about?
- How are you measuring your goals? What are your Key Performance Indicators (KPI’s)? Do these provide enough information and context for your company to take action? (I found this slide deck helpful in differentiating between a metric and a KPI.)
- Who are you benchmarking against? Who does your company aspire to be? The best in the industry, the best overall, and/or your company’s personal best?
- What do you plan to do with the results? Do you have a project plan to take action? Who are the stakeholders in your company that can use this information?
All of these decisions have to be made by you as a company. One of Avinash’s blogs highlights BP’s presentation in which they measure their customer experience and website performance against some of the best companies. BP does not limit themselves to just their competitors, but compares themselves with companies who they can learn from and be challenged by.


