8 Common Benchmarking Pitfalls - Learn To Avoid Them

8 Common Benchmarking Pitfalls – Learn To Avoid Them

What is benchmarking you ask? It’s a process of comparing your business performance against certain goals or performance of others. We all have benchmarks whether they are related to personal or professional life.

How would you feel about comparing Spectrum TV plans for cable with phone plans of another provider? This comparison doesn’t make sense, right? Comparing cable to cable plans or phone to phone plans would be the logical thing to do. Being a business analyst, over the span of my career, I have realized many companies don’t do benchmarking right. Yours could be one of them too. Before we evaluate them, let’s first understand benchmarking.

Types Of Benchmarks

Businesses usually stick to these two types of benchmarking techniques:

  • Internal benchmarking:It refers to comparing one business sector with another.
  • External benchmarking:It refers to comparing your organization to a competitor.

Both are effective and both approaches help achieve certain business goals.

Common Benchmarking Mistakes And Pitfalls

Before you think you are doing everything right, check the outcomes. How has the progress graph been? If your answer is “not so good”, then you might be doing benchmarking the wrong way.

Here are some common pitfalls…

Vague Objectives

Yes, there are companies that start benchmarking without a well-defined purpose. How can you possibly skip the first one and jump to the evaluation stage? Without a clear purpose/objective, you will never know what information to collect and what to compare it against.

Before starting the benchmarking process, ask “what are you interested in learning about your company?” and “What are you planning to achieve?”

Once these questions are addressed, you are ready to move forward.

Setting At A Higher Level

One corporate benchmark must be enough. That’s what most companies think. This is absolutely wrong! If you look at how large organizations work, they split everything into logical units for obtaining useful benchmarks.

If two units with significant differences are grouped together, you will draw the wrong conclusions obviously. When two units are facing different kinds of problems, it’s unfair to group them let alone use them for benchmarking.

Comparing Numbers Isn’t Enough

Benchmarking isn’t about comparing numbers merely. If you stick to that, you would overlook activities that influence those numbers. The only way to explain the gap between numbers is to perform qualitative analysis.

Along with checking the numbers, it’s equally important to look at the activities connected to those numbers. This will enable you to identify what needs to be fixed for closing the gap.

Using Outdated And Misleading Data

Unreliable information is a major pitfall of benchmarking. Often, it’s not easier to find reliable data to make a comparison of your business with another. In the attempt to get things done, never fit unverified data into the project.

Then comes the mistake of benchmarking to mediocrity. If the data analyst calls the unreliable data “right”, and the performance of one sector looks very good compared to its benchmark, this is also bad. You are making everyone believe the company is doing good while it’s certainly not!

Poor Time Management

The process of benchmarking is time-consuming, I agree. Don’t spend too much time trying to be just as good as your competitor that it makes you forget other areas of importance.

Expecting Perfection

Who doesn’t want to have access to a perfect data set that quantifies performance and lets you quickly take measures? The reality is there is no such thing as a perfect data set. If you wait for the most accurate data to be available, you would be putting your business at the risk of waiting too long. You will miss out on great opportunities.

Delivering the right message to the right person at the most accurate time matters more than having a perfect data set to look at. Sometimes, you have to be agile.

Confusing Benchmarking With Research

Benchmarking and research are two different things. When you are setting a benchmark, you are working on an existing process that’s in operation for a long time to have some sort of data on it. Research is all about doing preliminary homework for something new.

Starting Without A Baseline

We all have done it. Making benchmarking visits before analyzing our own process. Benchmarking assumes you already know your process. It also means you have measured the performance of different business sectors thoroughly. After all, it’s on the basis of this information, you make a comparison. Before you pick benchmarking partners, you must make sure your benchmarking team is clear about what it wants to learn.

How To Get It Right?

To prevent these mistakes, here are some rules to follow:

  • First things first, identify the difference between current and desired performance. This can be done by setting a goal, developing a plan, sharing your expectations, being clear about the outcomes and more.
  • There should be a best practice. Identify the areas where you are most satisfied with the results.
  • Performance measurement always starts with a strategy. Therefore, map out your strategical goals. If there are some questions, list them down and make sure you get your answers. They could help you design a meaningful strategy.
  • Set a timeline before you get started. Most companies give it 90 days. They are enough to compare your business to that of your competitor, come up with a change strategy and work on the implementation.
  • Don’t let your focus be metrics only. Shift it towards operations. Once your process, people, technology and strategy improve, the numbers will improve automatically.


I hope this guide has inspired you to review your benchmarking approach. Comparing Spectrum internet and cable to the basic cable plan of its competitor would be the right thing to do. The key is to compare apples to apples.

Don’t limit your benchmarking approach to factors that are standard across your industry. Sit together with your team of analysts to decide how the metrics should be measured before anything kicks off. Most of all, remember why you are doing it in the first place.

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