What is a peer group?

In metrics benchmarking, a peer group is a collection of companies similar to yours in industry, niche, or size. Peer groups can help you set benchmarks that are reflective of how companies like yours actually perform, so you’re making data-driven decisions that are based on reality.

How are companies sorted into peer groups? 

Marketing automation platforms use anonymized data to form groups of peers based on: 

  1. Average item value: This can help you reevaluate your pricing strategy and make sure your prices make sense for your industry and target market.
  2. Total revenue: This can help you determine whether you’re achieving realistic revenue targets.
  3. Year-over-year growth rate: This can tell you whether you’re growing at a comparable rate to your peers or whether you need to be more aggressive to keep up.
  4. Percent of days with a campaign: This can tell you whether your competitors are simply marketing more to target audiences than you are, which can provide strategy clues if your revenue is underperforming.
  5. Email revenue percentage: The average revenue generated from email should be 25–35%. This can help you determine whether there’s room for improvement in your  email marketing strategy.

How to use peer group data to improve your marketing strategy 

1. Identify the problem you want to solve

Start by identifying the specific issue you want to address and focus on one or two key challenges. For example, insufficient revenue could be your main issue, but if it stems from low email engagement or minimal cart abandonment flow conversions, you have to tackle the latter first.

Let’s say you’re noticing lower-than-expected revenue from email campaigns. Your goal is to figure out whether the problem lies in your messaging, frequency, or overall strategy. Once you do, you can tackle that issue and, through it, address the overarching one.

2. Gather your own metrics

Once you’ve identified the problem, match it to the relevant metric. In this case, gather data on your email campaign performance—look at metrics like open rates, click rates, and email revenue percentage. 

For example, if you’re generating 10% of your total revenue from email but the industry average is 25-35%, you know there’s room for improvement.

3. Compare your results to your peers

Now, compare your metrics to those of your peer group. For instance, if your email click rate is 1.5%, but your peers are averaging 2.5%, this tells you that your messaging or CTAs may not be resonating as effectively with your audience. 

Seeing where your performance falls short compared to your peers gives you specific areas to improve, like testing different subject lines, CTAs, timing, or adjusting your email content.

4. Create an action plan to close the gap

Based on the comparison, develop an actionable strategy to improve. 

Circling back to it, if your peers have a higher email revenue percentage and better click rates, you could try A/B testing email content to improve engagement. This might include adjusting your email design, personalizing your messaging, or increasing email frequency if your competitors are sending more campaigns. 

Just make sure to test one variable at a time and set clear, measurable goals, like increasing your email revenue by 5% in the next quarter, so you can track your progress.

Ready to set new benchmarks for your marketing strategy? Sign up for Klaviyo and receive fresh comparisons across 100 peers tailored to your business. 

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