What is benchmarking?

Benchmarking is the practice of comparing your performance — metrics, processes, or outputs — against a reference point: industry averages, best-in-class companies, or your own past results. It answers “is this number good?” by giving it context.

The value depends on picking the right reference. A 5% conversion rate means little on its own; against a peer-group median it becomes a signal. When the reference points are specific rivals, benchmarking becomes competitive benchmarking.