What is benchmarking research? Key steps to set data-driven benchmarks in consumer research

You’ve probably heard about benchmarking in different contexts, like salaries. But what about in consumer research? 

What is benchmarking in market research?

In the context of market research, benchmarking is the systematic process of measuring your brand, products, or performance against established standards or competitors to identify areas for improvement and gauge your market position. But it’s not simply about comparing A to B—effective benchmarking involves understanding the context, methodology, and market dynamics that drive those comparisons.

Here’s a more comprehensive example: imagine you’re a streaming service looking to understand your competitive position. 

Rather than just comparing subscriber numbers, effective benchmarking research might examine how different services achieve customer loyalty. You’d investigate Netflix’s content strategy, Disney+’s family positioning, and Spotify’s personalization algorithms. 

You’d analyze what drives customer acquisition costs across platforms, study retention rates by demographic segments, and understand how pricing models affect user behavior. 

The benchmark isn’t just “Netflix has X million subscribers”—it’s understanding the ecosystem of factors that make certain streaming strategies successful, then contextualizing where your service fits and what specific improvements could move the needle.

You might also hear benchmarks referred to as ‘norms’. They form a core part of competitive market analysis.

• The primary objectives of benchmarking research include:
• Tracking progress over time against established standards
• Identifying performance gaps between your brand and competitors
• Setting realistic and competitive targets for improvement
• Understanding what ‘good’ looks like in your specific market

How benchmarking differs from KPIs

You might think this all sounds eerily similar to KPIs (Key Performance Indicators). While benchmarking and KPIs are often mentioned together, are in fact different things, and both useful. 

KPIs measure your internal performance against your own goals—like tracking monthly sales growth or customer retention rates. 

Benchmarking, on the other hand, puts those metrics in context by comparing them to external standards or competitors. 

In other words, your KPI might show 15% customer satisfaction improvement, but benchmarking tells you whether that puts you ahead of or behind your competition.

Types of benchmarking research

Understanding the different types of benchmarking will help you choose the right approach for your research objectives. Here are the main categories:

Type	What it compares	Best for	Example
Internal benchmarking	Performance across different divisions, products, or time periods within your own organization	Large companies with multiple product lines or regional operations	Food company comparing customer satisfaction between breakfast cereals vs snack products across different markets
Competitive (external) benchmarking	Your brand or products directly against main competitors using the same metrics	Understanding market position and identifying competitive advantages or gaps	Measuring brand awareness, customer satisfaction, or pricing against your top three competitors
Strategic benchmarking	Your processes/strategies against organizations that excel in specific areas, regardless of industry	Finding innovative approaches that could be adapted to your context	Retail bank studying Amazon’s customer experience delivery methods

Key considerations for each benchmarking type

Internal benchmarking gives you complete control over data and methodology, making it easier to ensure consistency and relevance to your specific business context. Use it to identify best practices within your organization and to highlight areas where knowledge transfer could improve overall performance.

Competitive benchmarking is probably what most people think of when they hear “benchmarking.” The challenge here is making sure you’re comparing like with like—a luxury car brand shouldn’t benchmark against budget vehicles using the same criteria. Context matters substantially, especially in benchmarking.

Strategic benchmarking often provides the most surprising insights because it forces you to think outside your industry’s conventional wisdom. The goal is to identify innovative approaches that could be adapted to your own context, even from completely different industries.

How can you overcome benchmarking challenges for clearer insights? 

Many traditional research companies offer benchmarking, and on the surface it sounds like a great thing to outsource: they’ve done the legwork with massive studies that aggregate past data on a huge range of products, normally from research carried out with nationally representative audiences. Why do it yourself, right?

The brands that think like that approach a research house asking for benchmarking data on family cars, for example, and the research company will give them the same data they give to everyone else looking for benchmarking on family cars.

The thing is, if you go to the same place for benchmarking data that everyone goes to, you will likely struggle to get anything out of that that gets you ahead. When your competitors have access to exactly the same insights, those insights stop being competitive advantages.

Benchmarking for success doesn’t mean you need to reinvent the wheel, but it does mean that you have to take control of what matters to your brand the most – and that usually doesn’t overlap exactly with what these ready-to-go research houses offer. 

That’s why it’s important that brands create their own benchmarking protocols. Preferably with a tool that they can use in-house, and of which they can track the changes made based on the benchmarking research and the results that has had.

When you design your own benchmarking approach, you get:

• Insights that are actually relevant to your specific market position
• The ability to ask the questions that matter most to your business
• Control over timing and methodology
• A clear view of how your improvements translate into real performance gains

This way, benchmarking becomes a genuine competitive tool rather than just another report that sits on everyone’s desk.

The value and benefits of benchmarking research

Despite these challenges, benchmarking remains one of the most valuable tools in market research when done right. It’s a great way to tie competitive analysis to what is internally happening and relevant to your company, something which is often two separate research efforts that struggle to be connected in a practical and valuable way.

Think of it as creating your own benchmark for benchmarking. When you develop custom benchmarking protocols, you’re not just measuring performance—you’re building a bridge between external market realities and internal business decisions. 

This approach helps you understand not just where you stand, but why you stand there and what specific actions could move your business in the right direction. 

Rather than having competitive insights sitting in one corner and internal performance data in another, effective benchmarking puts them together into a coherent story that every team will be able to learn something from.

How to do benchmarking research using reliable data

Like all aspects of consumer research, you should think about benchmarking in the context of your specific research objectives. 

For example, if your key objective is to find out which of your product concepts will be most successful, you can focus on comparing on benchmarking results among these potential concepts. At this stage—your internal concept selection stage—external benchmarking isn’t essential. 

Competitive external benchmarking will become essential when you’re comparing your winning concept with what else is on the market. 

A more useful way to run external benchmarking research is to build a bespoke picture of what ‘good’ looks like for your specific products, brand and category. 

We recommend competitive product benchmarking as a useful method of finding out what makes customers in your sector happy. 

Steps to benchmarking research that’s ready for action and accountability

Here’s what separates benchmarking that sits in a drawer from benchmarking that changes your business:

Choose benchmarks that challenge your assumptions 

Don’t just pick your obvious competitors. Find brands that solve similar customer problems in different ways, or companies that excel in areas where your entire industry struggles. The most valuable insights often come from unexpected comparisons.

Design for context, not just numbers 

Instead of asking “How satisfied are customers?”, ask “What would make customers switch to a competitor?” or “What keeps customers loyal during tough times?” Context-rich questions reveal the why behind the numbers.

Build in attribution from day one 

Structure your research so you can trace specific performance differences back to specific business decisions. If Brand X outperforms on retention, make sure you can identify whether it’s their onboarding process, pricing model, or customer service approach that’s driving the difference.

Create comparison frameworks that reveal trade-offs 

Map out how different approaches affect different outcomes. Maybe premium positioning drives higher satisfaction but lower market penetration. Maybe it’s the other way around. It’s up to you to learn and understand cause and effect. Understanding these trade-offs helps you make strategic choices rather than just chasing higher scores.

Test your benchmarking insights before betting on them 

Run small pilot programs based on your benchmarking findings before rolling out major changes. This validates whether insights from your research actually translate into improvements in your specific context.

How to run competitive benchmarking research

For this, you take a product from your category that’s already successful—in our analogy, the category is family cars. You then run research asking people why they like individual products. You ask them what they like about it, what they like about the brand, how often they buy it, etc. Then you ask the same questions about your products and brand, comparing the differences. 

You can also run a direct comparison where you ask people to tell you what they think about your product alongside your competitors’ product. 

By running competitive product benchmarking you end up with what you needed: an understanding of what makes products like yours successful. But because you’ve run tailored, specific research, your benchmarks are genuinely relevant and useful to your business. 

Over time, as you accumulate benchmarking data, you’ll be able to create your own specific benchmarks that are custom-built to your product category and your specific business needs.