Benchmarking – Competing with the best in the industry
In a nutshell – Benchmarking is comparing your business and its processes against those of your competitors to identify the best practices in your industry. It can help generate new ideas to improve operation; it can help identify new technology you could incorporate to reduce costs and improve productivity. The main aim is to reduce the gap in competitive advantages between you and businesses you see as competition.
How To: Benchmarking Analysis –
The first step is choosing the correct benchmarks. For example, if one of your company goals is to achieve a lower unit cost, then benchmarking your processes against a competitor with attainable and exceptional lower unit costs would be a great place to begin. Your business should choose from a set pre-existing key performance indicators (KPI’s) that you have been monitoring and wish to improve upon – and that you have some reliable data for.
KPI’s can include anything from customer service/customer retention to employee turnover – isolate what areas you want to improve, see what data you have and then identify how you can achieve your objectives.
Choosing the Right Competitors – Four Categories
Similar Business – Duh – Do we even need to go into it? Well, we will anyway. Here, you look at companies of a similar size and within a similar industry. Comparing products and services could spark that lightbulb moment you’ve been needing.
Industry Leaders – These are the elite companies who seem to do just about everything perfectly. These are the pinnacle and the ones you wish to take inspiration from as business growth occurs. They’ve been at the stage you’re at now and propelled on to become what they are today – you can gain a lot of new ideas conducting this type of benchmarking.
Anyway, we think you get the idea; you can benchmark yourself against smaller companies
How To: Locate the Data
This is certainly where the difficulty in the benchmarking process lies. How is it you approach accessing the information required for benchmarking? It may seem like a daunting task, especially when you consider that many companies don’t want to reveal the information needed for the process. However, luckily for us all, there are tools at your disposal.
SEO Metrics – For example, SMErush is a site which analyses your website against competitors and also produces a report documenting the results. There is a cost, though it is extremely useful.
Internet Monitoring – An excellent tool here is Brand24. This helps you conduct your research as it collects all mentions with keywords that you choose. You can view modes of measurements such as sales reports and social media mentions.
Survey – Or if you’re feeling up to it: you can
SMART Plan & Monitoring Results
After benchmarking successfully, to make use of your findings, you need a plan that you can follow; which should include SMART actions.
- S – Specific – Must be specific to your goals and objectives.
- M – Measurable – You need to be able to measure progress.
- A – Achievable – What’s the point if they’re not?
- R – Relevant – Must be relevant to your strategy.
- T – Time Based – Set a time frame; deadlines motivate.
Benchmarking is a continuous process and you should consistently monitor the effects of implementation as well as any further development of competitor strategies.
To help your business improve and grow, please visit our other blogs – you won’t regret it.