The Different Types of Benchmarking - Bernard Marr

6/24/22, 6:35 AM The Different Types Of Benchmarking – Examples And Easy Explanations | Bernard Marr
  
English
The Different Types Of 



Benchmarking – Examples
And Easy Explanations 

Written by

Bernard Marr Benchmarking – i.e. Comparing your business performance against certain reference
Bernard Marr is a world- points – is a popular and potentially powerful way to glean insights that can lead to 
renowned futurist, influencer and improved performance. In this article, we’ll explore the various types of benchmarking
thought leader in the fields of 
and how these approaches can benefit your business.
business and technology, with a
passion for using technology for 
the good of humanity. He is a
best-selling author of 20 books,
writes a regular column for
Forbes
We use and advises
cookies and coaches
to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. Privacy
1
many of the world’s best-known policy
Sign up for FREE!
organisations. He has over 2 Accept
https://bernardmarr.com/the-different-types-of-benchmarking-examples-and-easy-explanations/ 1/14
million social media followers, 1

million newsletter subscribers Different types of benchmarking: Examples And Easy Explanations
and was ranked by LinkedIn as
one of the top 5 business
influencers in the world and the
No 1 influencer in the UK.

Bernard’s latest book is ‘Business 

Trends in Practice: The 25+
Trends That Are Redefining
Organisations’
View Latest Book 
Follow Me

     

What’s the difference between benchmarks and KPIs? 
People often ask me this, and there seems to be a general assumption that benchmarks 
and KPIs are the same thing. But they are different.
To clarify:
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. Privacy
1
Benchmarks are reference points that you use to compare
policy
Sign upyour performance
for FREE!
against the performance of others. These benchmarks can be comparing
Accept
processes, products or operations, and the comparisons can be against other parts
of the business, external companies (such as competitors) or industry best practises.
Benchmarking is commonly used to compare customer satisfaction, costs and
quality.
KPIs, on the other hand, are decision-making and monitoring tools, used to track

performance in relation to strategic goals. In other words, KPIs chart whether an

individual, project, team, business unit or entire company is on track to achieve its
objectives. KPIs are a bit like an early warning system, flagging up where things
might be heading off-course and where action might be needed.

So, when you use KPIs, you’re comparing progress in relation to a specific goal. And
when you use benchmarks, you’re comparing against others. You can use benchmarking
to put your own KPIs into context and to set targets for your KPIs. 
Both – KPIs and benchmarks – are used to identify opportunities for improving 
performance, which may be where the confusion arises.

Exploring the different types of benchmarks

Broadly speaking, benchmarks break down into two core categories: internal and
external. Internal benchmarking compares performance, processes and practises
against other parts of the business (e.g. Different teams, business units, groups or even
individuals). For example, benchmarks
policy could be used to compare processes in one retail 1
Sign up for FREE!
store with those in another store
Accept in the same chain.
External benchmarking, sometimes described as competitive benchmarking, compares

business performance against other companies. Often these external companies are
peers or competitors, but that’s not always the case; for example, you can use
benchmarking to compare performance, processes and practises across different
industries. 


Three ways to use benchmarking
Benchmarking, whether internal or external, is used in three key ways. They are:
Process benchmarking. This is all about better understanding your processes, 

comparing performance against internal and external benchmarks, and finding

ways to optimise and improve your processes. The idea is that, by understanding
how top performers complete a process, you can find ways to make your own 
processes more efficient, faster and more effective.

Strategic benchmarking. This compares strategies, business approaches and
business models in order to strengthen your own strategic planning and determine 
your strategic priorities. The idea is to understand what strategies underpin

successful companies (or teams or business units) and then compare these
strategies with your own to identify ways you can be more competitive.
Performance benchmarking. This involves collecting information on how well
you’re
We use cookies to ensure that we give you the best doing
experience onin
ourterms ofIfoutcomes
website. you continue(which could
to use this site wemean anything
will assume that youfrom revenue
are happy with it. Privacy
1
policy
growth to customer satisfaction) and comparing these outcomes
Sign up forinternally
FREE! or
Accept
externally. This can also refer to functional performance benchmarking, such as
benchmarking the performance of the HR team (using metrics like employee net
promoter score or staff engagement surveys) or the marketing team (measuring net
promoter score or brand awareness, for instance).
Why you might want to consider benchmarking in your organisation




Each of these different ways of benchmarking have one key goal in mind: to identify
gaps in performance and uncover opportunities to improve, whether that means making
processes more efficient, reducing costs, increasing profits, boosting customer
satisfaction, or whatever. Ultimately, what drives companies to benchmark is the need

(or want) for improvement.

So whether you want to simply compare your internal performance, catch up to a
competitor, better understand and track your peers, or become a market-leader in your 
industry, benchmarking can be an incredibly useful tool.

However, benchmarking is not a magic bullet for improving performance – it’s a part of

the solution, not the complete solution. The complete solution requires you to set clear
strategic goals, identify your critical business questions, design KPIs that help you 
answer those questions and track performance against your goals, and compare
performance using benchmarking.
I certainly
We use cookies to ensure that we give you wouldn’t
the best experience advise
on our a Ifcompany
website. you continuetotofocus
use thisall
sitetheir attention
we will onyou
assume that benchmarking
are happy with it. at the
Privacy
1
policy
Signas
expense of tailored, carefully designed KPIs. But, when viewed up part
for FREE!
of the complete
Accept
performance management picture, benchmarking provides a useful way to glean

valuable performance-boosting insights.
Where to go from here
If you would like to know more about KPIs and performance management, cheque out 

my articles on:
Key Tools and Techniques for Performance Management

What’s the difference between a benchmark and a KPI?
How to benchmark your performance and metrics? 
Or browse the KPI Library to find the metrics that matter most to you. 



Related Articles 
1
policy
Sign up for FREE!
Accept



The Future Of Work: 4-Day Week And Pioneering Ideas At Virgin Money
Work has changed immeasurably over the decades that I have been in the workforce, and I am sure that 20 years from now, it
will be unrecognizable from how it is today.[...]

 




1
policy
Sign up for FREE!
Accept
Why Every Business Must Become A Purposeful Business

A purpose that your customers (and employees) can genuinely connect with? If not, you’re ignoring a major trend in the
business world.[...]








How To Become A More Sustainable And Resilient Company

Indeed, two out of three consumers can now be categorized as “belief-driven buyers,” and more than two-thirds expect
brands to care about environmental issues.[...]
policy
Sign up for FREE!
 1
Accept




How To Become A Successful Video Content Creator – Insights From KallmeKris
The development of new technology means some jobs that were common in past times no longer exist – think of lamplighters,

elevator operators, and telephone switchboard operators.[...] 




1
policy
Sign up for FREE!
Accept
The 7 Biggest Performance Review Mistakes You Must Avoid

Performance reviews can be really productive or really poor. Learn how to drive high performance by avoiding these 7 review 


mistakes. [...]







Why Every Brand Should Be Going Direct-To-Consumer (DTC)

1
The direct-to-consumer (DTC) trend, also known as disintermediation,
policy essentially means bypassingSign
traditional intermediaries in
up for FREE!
the supply chain.[...] Accept



Stay up-to-date
Get updates straight to your inbox
Join my 1 million newsletter subscribers
Never miss any new content

Email 

Name

Sign-up


I have read and agree to your terms and conditions.

1
Social Media
policy
Sign up for FREE!
Accept
   
0 0 0 0 

Followers Followers Followers Subscribers

    
0 0 0 0 
Followers Subscribers Yearly Views Readers 


Podcasts 
1
policy
Sign up for FREE!
Accept



Bernard Marr's Future of Business & Technology Podcast
The Dangers Of Not Aligning Artificial Intelligence With Human Values


Bernard Marr's Future of Business & Technology Podcast 
Metaverse Continuum: 4 Technology Trends Everyone Must Get Ready For Now



View Podcasts
Bernard Marr's Future of Business & Technology Podcast
The Growing Problems with Deep Fakes with Neil Sahota
1
policy
Sign up for FREE!
©Bernard Marr 2021 Terms & ConditionsAccept
Web, SEO & Social Media by 123 Privacy Policy

Internet Group









1
policy
Sign up for FREE!
Accept

The Different Types of Benchmarking - Bernard Marr

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Different Types of Benchmarking - Bernard Marr

Uploaded by

Copyright:

Available Formats

6/24/22, 6:35 AM The Different Types Of Benchmarking – Examples And Easy Explanations | Bernard Marr

The Different Types Of 

million social media followers, 1

View Latest Book 

What’s the difference between benchmarks and KPIs? 

External benchmarking, sometimes described as competitive benchmarking, compares

Benchmarking, whether internal or external, is used in three key ways. They are:

Process benchmarking. This is all about better understanding your processes, 

Why you might want to consider benchmarking in your organisation

performance management picture, benchmarking provides a useful way to glean

Where to go from here

Key Tools and Techniques for Performance Management

Why Every Business Must Become A Purposeful Business

The 7 Biggest Performance Review Mistakes You Must Avoid

Why Every Brand Should Be Going Direct-To-Consumer (DTC)

Web, SEO & Social Media by 123 Privacy Policy

You might also like