Benchmarking is the process of comparing a company’s performance, processes or results with a relevant point of reference. In B2B sales, benchmarking is used to understand how well the sales organisation is performing and where there may be opportunities to improve. The comparison can be made against industry standards, competitors, previous company performance or different teams and markets within the same organisation.
For example, a sales manager might benchmark conversion rates across different market segments, compare the performance of two outbound approaches or analyse whether the company’s sales cycle is longer than expected. The purpose is not simply to determine whether a number is high or low. Good benchmarking provides context that can help a company make better decisions about its sales process and execution.
Sales numbers are difficult to evaluate without context. A 20% conversion rate may be excellent in one sales process and disappointing in another. The answer depends on factors such as the market, product, customer value, lead quality, sales cycle and how the conversion rate itself is defined. Benchmarking provides a reference point. It can help a sales organisation understand whether differences in performance are caused by market conditions, targeting, sales execution or the structure of the sales process.
This is particularly useful when management wants to answer practical questions such as:
Benchmarking therefore becomes most valuable when it leads to investigation and action rather than simply another dashboard.
In sales, benchmarking can be applied to both activities and results. A company might compare the number of prospects contacted with the number of meetings generated. It could then look at how many of those meetings become qualified opportunities and how many eventually become customers. Metrics such as conversion rate and win rate are particularly useful when benchmarking different stages of the sales process.
For example, two sales teams might generate approximately the same number of meetings, but one creates considerably more qualified opportunities. Rather than concluding that one team simply needs to make more calls, management can investigate what happens during targeting, qualification and the first customer dialogue.
Benchmarking can also be used over time. A company can compare its current quarter with previous periods to identify changes in:
The important part is to compare equivalent data. Comparing two numbers that represent different sales processes can easily create misleading conclusions.
Benchmarking in complex B2B sales requires more context than simply comparing headline numbers. A SaaS company selling a relatively standard solution to small businesses will normally have a different sales process from an industrial company selling production equipment with a 12-month decision process. Their activity levels, conversion rates and sales cycles should not be compared without considering those differences. The same applies when comparing different customer segments.
A company may discover that prospects within its ideal customer profile convert significantly better than companies outside it. That insight can influence how the sales team prioritises prospecting and builds its pipeline. Benchmarking is therefore not only about measuring salespeople. It can also provide information about whether the company is targeting the right customers and using the right sales approach.
This is especially relevant for complex B2B products and services, where a small number of high-quality opportunities may be more commercially valuable than a large volume of poorly qualified leads.
A useful distinction is between internal benchmarking and external benchmarking. Internal benchmarking compares performance within the same organisation. A company might compare different teams, periods, customer segments, products or geographical markets. Because the company controls the underlying data, it is often easier to understand exactly what is being compared.
External benchmarking compares the company with information from outside the organisation, such as industry data, market studies or relevant peer companies. Both approaches can be useful, but they answer different questions.
Internal benchmarking can show that one customer segment has a significantly higher conversion rate than another. External benchmarking might indicate how the company’s overall sales cycle compares with businesses selling similar solutions. External benchmarks should be used carefully. Two companies can use the same term while measuring it differently. A qualified lead at one company may not meet the qualification criteria used by another.
The benchmark is only useful when the underlying definitions are sufficiently comparable.
Benchmarking can also support go-to-market decisions when a company enters a new geographical market. An international company expanding into Scandinavia may initially expect its existing sales metrics to transfer directly from its home market. Sometimes they do. Sometimes local buying behaviour, market maturity, competition or access to decision-makers creates a different sales dynamic.
The company can benchmark the new market against its established market while examining differences in areas such as meeting generation, qualification, sales cycle and conversion.
The goal should not be to force every market to produce identical numbers. The comparison is useful because it helps management understand why performance differs and whether the sales approach needs to be adapted.
