• by Gord Hotchkiss , Featured Contributor, September 13, 2012

That's the news from Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average. -- Garrison Keillor

How good are you? How intelligent, how talented, how kind, how patient? You can give me your opinion, but just like the citizens of Lake Wobegon, you’ll be making those judgments in a vacuum unless you compare yourself to others. Hence the importance of benchmarking.

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) than the practitioners who are on 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 marketplace and takes decision-making out of the vacuum.

But before going on a benchmarking bonanza, here are some things to consider:

Weighting is Important

It’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 Whom You’re Benchmarking Against

If you ask any marketer who their primary competitors are, they’ll be able to give you three or four 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 Objective

If qualitative assessments are part of your benchmarking (and there’s nothing wrong with that), 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 that everybody is above average in something…