What is a benchmark?
A benchmark is what you are comparing your file against, it is the base of comparison you are looking for insights from.
For example, you are trying to assess the opportunity for expansion into Winnipeg. You want to understand how many people live in Winnipeg that are like your existing customers.
In this case the benchmark is the market you are looking to expand to, and the target are people who are like your existing customers.
Tip: typically, the benchmark is where you are looking for opportunity or comparison.
When your run a profile report you analyze how your file compares to the benchmark by comparing penetration and index.
Penetration is the number of households that are classified as having a certain characteristic (falling into Segment G5 for example) expressed as a percentage of the total households in a file.
An index is calculated by comparing the penetration (%) of a characteristic (falling into Segment G5) between the file and the benchmark.
In our expansion example, 10% of the existing customers (file/target) fall into segment G5 and 5% of Winnipeg households fall into segment G5 (benchmark).
This means that segment G5 is twice as likely to occur in my customer file than the market or 10% / 5% x 100 = 200 index.
IMPORTANT: When you are selecting a benchmark, the default Project Canada contains the geographic benchmarks that are preloaded in the system.
You have two options for benchmarks – you can use a geographic benchmark, like the example above, or a custom benchmark file that you have previously created.
- A geographic benchmark means that you will compare your file to a specific area (i.e. Toronto, Alberta or all of Canada). These benchmarks are pre-set in intelligentVIEW. They are part of the Standard Geographies project pre-loaded. Choose from the Standard Geographies list provided.
- A custom benchmark is a file that you have created. A custom benchmark can be used to compare two customer files, trade areas or types of customers.