Analytics, Digital Marketing Analytics, Digital Marketing Strategy, General
Best Practice For Setting Benchmarks
Jun 20 2023
A benchmark is a way to understand if your digital marketing is performing well relative to a set standard or benchmark. For example, you may have an open rate on your email of 10% – is this good? Should you be satisfied? What does good look like in digital marketing? Here is a best practice for setting benchmarks for your company.
While benchmarking sounds like an easy concept, it is more challenging once you start trying to set them. When thinking of creating a strong benchmark, try IAP.
I love IAP because it looks at benchmarking holistically. It can be tempting to set a benchmark based only on industry averages alone (for example, aiming for a click-through rate that matches industry standards.) However, it is important to keep in mind that based on your unique business, marketing objectives, and investment, you may see valid differences and should look for improvement and a well-thought plan, as well.
The most important thing (even if you are well below or above industry averages) is that you are improving. Always aim for improvement when setting benchmarks that are realistic for your business. Additionally, evaluate when things are not improving, so you can reallocate resources.
Most businesses set benchmarks based on industry averages. While this should be a part of your strategy, it should not be the only thing you look at.
WATCHOUT: These are averages and may not be representative of your industry or approach.
There are three types of benchmarks that you can consider:
Finally, check that your benchmark is realistic based on your time and resource investment. If you have a large investment, it is reasonable to expect more than if you have a small investment. It is also helpful to check that your benchmark or goal is aggressive enough to generate a positive return on investment.
In evaluating content for an agency, we were able to identify the content that performed best. However, when looking at benchmarks from Facebook (Industry Standard), it all performed well below benchmarks set by Facebook and standards for the industry.
Rather than setting a goal of incremental performance (Plan), the agency realized that they needed to change their approach overall since while some content did better, it all did poorly on a more objective scale (Improvement).
Power Tip:
When setting benchmarks, it is also a good idea to consider your benchmark relative to your investment. For example, if you are making a big investment for minimal growth, is it worth it?
This is an excerpt from Krista Neher’s best-selling book, “Digital Marketing That Actually Works.” You can find this and more books at Boot Camp Digital
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