Research benchmarking and baselines: What's the difference?

Research benchmarking and baselines are important tools for guiding organizations' actions and performance for long-term progress. While some may use these terms interchangeably, they are two distinct concepts with unique purposes and applications.

So, how can you use these research tools to gain a competitive advantage? What metrics are most essential in benchmarking, and how can you use them for continuous growth?

Before diving into using research metrics, let’s review the major differences between baselines and benchmarking.

What are research baselines?

Think of a research baseline as the starting point when measuring progress over a period of time. It serves as a reference to which you can compare your other data.

If your organization wants to measure improvements in customer satisfaction over a five-year period, you would first need to measure where customer satisfaction is today. This would provide a baseline to measure how much your team has improved in this area over time.

Baselines are inherently adaptable, and you should use them for any metric your team is looking to improve upon. UX teams, for example, often measure user satisfaction with a baseline survey before they deploy any changes to an interface. This way, the team can compare results after the changes have been made and determine if there has been a positive or negative impact on user satisfaction.

What are research benchmarks?

Research benchmarks are similar to baselines in that they both help measure progress. However, benchmarks use competitor data or industry standards as the reference point.

They don't need to be starting points, either. You can set benchmarks at any point throughout the product's lifecycle. Benchmarks represent a level of excellence or achievement that organizations aim to reach or surpass. By performing benchmarking studies and comparing performance against established benchmarks, you can gain insights into your competitive edge and areas where you need to improve.

Imagine a digital product team that wants to evaluate the success of a new app feature. They could benchmark their user engagement metrics, such as Net Promoter Score and QXscore™, against similar apps within the industry. Using this data, they can measure how effective their product is versus competitors in the market and identify features that need adjustments. 

6 types of research benchmarks

There are 6 major categories of research benchmarks you can use depending on your scenario.

1. Process benchmarking

Process benchmarking is a method of improving performance by identifying, understanding, and adapting successful practices and processes from other organizations. Typically, you'd look at the processes of top performers in your industry — or thought leaders now for their best practices outside of your market — to identify gaps and methods for improvement. 

A software development company might use high-level process benchmarking to improve its product development cycle. Its team could identify a leading company known for its agile methodologies. They would then adopt these practices, tailoring them to their own context, and monitor the impact on their product development efficiency.

2. Strategic benchmarking

This form of benchmarking goes beyond operational processes and performance metrics, focusing instead on how to achieve high-level organizational objectives. The process begins with identifying the strategic areas to benchmark, including business strategy, market positioning, innovation management, or leadership approaches.

For instance, if you're looking to expand your operations internationally, you might engage in strategic benchmarking against a similar organization that has successfully entered international markets. You could examine how this organization chose which markets to enter, how it adapted its product or service to different cultural contexts, and how it managed its international marketing campaigns. 

3. Performance benchmarking

Performance benchmarking relies heavily on key performance indicators (KPIs) to measure effectiveness and growth. The exact KPIs will depend on your team's goals. These could range from financial indicators like revenue growth or profit margins to operational metrics like production efficiency or customer satisfaction rates.

Imagine a manufacturing company is looking to improve its production efficiency. Its teams could use benchmarking to compare output per employee with that of leading companies in the same industry. If they find that their output is significantly lower than their competitors, they might experiment with better training, improved processes, or investment in new technology.

4. Product benchmarking

When you want to understand your products' features, quality, and performance, you'll use product benchmarking to compare them with those of your competitors. This can reveal gaps in functionality, identify areas for improvement or innovation, and help determine how your product is positioned in the market.

A clothing company launching a new line of wedding wear might conduct product benchmarking to assess quality and features against similar products already on the market. They could compare their design, fabric choices, pricing, brand awareness, and target market to competitors' products to determine if they have a unique selling proposition.

5. Internal benchmarking

In some instances, it can be useful to perform benchmarking within your own organization. With internal benchmarking, you compare data from different departments, teams, or locations to identify where and how certain departments are excelling. Then, you can share their best practices with other departments. 

If you have sales teams across different regions, you might use internal benchmarking to measure revenue earned. If the sales team in one region consistently outperforms others, you'd study their winning strategies and tactics to understand what they are doing differently. Then, you'd figure out how to apply these approaches in other regions.

6. Competitive benchmarking

Competitive benchmarking, or competitive analysis, is often used as a synonym for research benchmarking. However, unlike research benchmarking, it focuses specifically on your organization's performance compared to that of your direct competitors rather than industry standards. This type of competitor research benchmarking helps identify market gaps, opportunities, or potential threats posed by other companies in your industry.

A technology startup, for example, might use search engines to look up key competitive benchmarking metrics and examine its product offerings against those of world-class competitors. They could look at features, pricing, and customer satisfaction rates to see if they could gain significant market share. 

If your team is about to release a new product or feature, competitive benchmarking is a useful way to identify any last-minute improvements you should make.

Common metrics for research benchmarking

Below, we'll go through some of the most common metrics organizations use to guide their benchmarking practices.

Customer engagement

Customer engagement is a measure of the depth of a customer's relationship with your product. This metric indicates how often, how long, and how deeply they interact with it. High engagement levels typically suggest that a product is resonating with its users, meeting their needs, and providing them with value.

The number of daily active users, session duration, page views per session, and actions taken within the app or website all reflect customer engagement. For example, a high number of daily active users coupled with long session durations would suggest that users are finding the product useful and engaging.

User experience

User experience (UX) directly reflects the overall satisfaction and ease people have while interacting with a product or service. Usability testing is a common method for observing the user experience, as product developers can observe people use their product in real time.

Metrics, including task completion rate, error rate, and time to complete a task, can provide you with valuable insights into how easy and intuitive your product is to use. Surveys and feedback forms can also be great ways to gauge customer satisfaction.

Conversion

Conversions happen at all stages of a customer journey, from signing up for a newsletter to making a purchase. Organizations rely on conversions because they indicate whether the product is successfully guiding users toward intended goals and contributing to overall business objectives.

The right conversation metrics to use can vary based on your product and goals. For instance, e-commerce platforms might focus on the purchase conversion rate. If you have a content-oriented website or a blog, the subscription rate could be a key metric to monitor. By benchmarking conversions, teams can make data-driven decisions to optimize their product's performance.

Performance

Performance metrics are a critical benchmarking tool for digital product teams as they provide quantifiable measures of how a product is doing with users. Several metrics shed light on a product's performance, including page load times, app responsiveness, uptime, error rates, and churn.

Take, for instance, the site speed of your competitor. You can use that as a benchmark to measure your own site's speed. If your speed is higher, start experimenting with different elements of your site until you hit your benchmark.

Retention

Retention is a metric you can use to gauge customer loyalty and engagement over time. These metrics measure the number of users who return to use your product after their initial visit or usage. In other words, retention metrics indicate how well your product is maintaining its user base.

It generally costs companies more money to attract a new customer than it does to retain one. Taking advantage of benchmarking metrics helps to reduce costs while increasing the lifetime value of every customer. Using retention data, you can enhance your product's value proposition, improve user satisfaction, and ultimately, boost your bottom line.

Learn how UserTesting combines these metrics with insights to create a comprehensive QXscore.

How to create strategic research benchmarks

Many teams may understand the importance of research benchmarks and achieving business objectives, but to see effective change, they must also understand how to establish a relationship between these two concepts. Following a set of industry-proven steps will help guide your organization through the benchmarking process and prevent common mistakes.

Establish clear business objectives

Business objectives act as a roadmap, guiding the direction of the research and providing a clear picture of what your team hopes to achieve. To define your objectives, you must first have specific goals to achieve. You'll then break these larger goals into smaller objectives for each department, location, or employee.

Let's say a company wants to increase customer engagement by 20% in the next quarter. To achieve this goal, the product team will work on smaller objectives such as increasing daily active users and session duration.

These objectives will then inform the design of the research benchmarking, including what data to collect, how to analyze it, and how to interpret results. They align the company's strategic goals with a clear framework for measuring success.

Identify key metrics

Define which metrics you should focus on, how you will calculate them, and how often you'll measure them. If you're looking to improve your user experience, you might look at task completion rates, error rates, and time to complete tasks as key metrics.

The metrics you define at this stage will end up becoming the foundation for all future progress. Regularly assess whether these metrics are helping your team understand how to reach its objectives.

Define your success

Providing your team with a clear vision of success is key to making sure you can leverage your benchmarks successfully. This transparency makes sure everyone involved is aiming to achieve the same thing. It also sets the standard against which progress can be measured.

Write down specific measurement objectives and processes that, if you achieve them, would signal benchmark success. If the objective is to reduce churn rate, you could define success as reducing churn rate by 15% over the next six months.

Your successes should be ambitious but realistic. Also, be sure you clearly communicate them to all members of the team — this will establish transparency and provide motivation.

Assess current benchmarks

Assessing your team's current benchmarks allows you to identify strengths and weaknesses over time. Without this baseline understanding, it can be difficult to measure the impact of any changes or initiatives accurately.

Gather historical data on all your identified key metrics to serve as your starting point. Eventually, you'll use the data to understand how performance has shifted and what may have caused the changes. 

It's also beneficial to look for patterns or trends in the data, as they can provide valuable insights into the product's performance. Document the findings from this analysis and communicate them to your team. That way, everyone is aware of the product's current performance and can freely discuss potential strategies for improvement.

Identify operational capabilities

Benchmarking operational capabilities is essential, but often overlooked. It involves evaluating your team's processes, resources, and talent to determine how they impact organizational objectives. For example, if you want to improve customer satisfaction, what internal processes are currently in place to handle customer feedback?

Identifying any shortcomings or inefficiencies will allow for a more targeted approach to improving these operational capabilities and improving your benchmarking system. Your team may need to invest in new technologies or training to improve these capabilities, ultimately leading to better research benchmarks and business outcomes.

You might not be able to improve all operational capabilities or fix all the problems in a short amount of time, but having a clear understanding of what's hindering your progress will help you prioritize and make informed decisions in the long run.

Create a system of efficiency

Understand which stakeholders are contributing to each metric and how. Know which software in your tech stack is improving — or hindering — your results. Look at every part of your benchmark system to see where bottlenecks may occur.

A UX team may discover that one type of software isn't properly communicating with another within the system and needs to be switched out. Eliminating this obstacle in the workflow creates a more efficient system and could end up saving the team significant resources.

Measure progress and make improvements

Once you've established your benchmarks, it's time to track progress and make improvements. This phase ensures that your team is iterating on improvement strategies based on data-driven insights. It's helpful to use research tools and software to automate data collection and illustrate your most relevant insights.

Conduct monthly or quarterly reviews to assess progress against your predefined benchmarks. Your team should use the insights gained from the data analysis to identify potential strategies for improving performance, like making changes to the product, adjusting marketing strategies, or investing in customer education resources.

Find out how American Airlines created strategic benchmarks to drive their product decisions and success.

Remote video URL

The strategic significance of baselines and benchmarks in research

Research benchmarking and baselines are essential for measuring progress and performance. Baselines are a starting point you can use to measure your current numbers against future ones, while benchmarks are data comparisons to competitors or industry standards. Understanding how to successfully benchmark key metrics in your organization will help you drive strategic decisions and align company goals with team objectives.