Performance Benchmarking

Performance benchmarking involves gathering and comparing quantitative data (i.e., measures or key performance indicators). Performance benchmarking is usually the first step organizations take to identify performance gaps.

Performance benchmarking is a powerful tool, if you’re looking for continuous improvements in your business processes.

Practice benchmarking involves gathering and comparing qualitative information about how an activity is conducted through people, processes, and technology.

Benchmarking will help your business

• Improve your processes, operations, procedures
• Measure how effective your past performance is
• Identify how your competitors operate
• Improve efficiency and reduce operating costs
• Improve product/service quality
• Increase customer satisfaction and loyalty

Goals

No doubt you’ve already determined your business goals, but benchmarking goals are different. They’re about improved performance of your company processes. They’re competitive. But, as with your business goals, they must be achievable.

Don’t forget, they must be SMART: Specific, Measurable, Achievable, Relevant, Timely.

• Specific: Real numbers, real deadlines – who, what, where, why?
• Achievable: Are your goals challenging, yet possible?
• Measurable: How will you track and analyze your progress?
• Relevant: Do you have the resources to achieve your goal?
• Timely: When do you intend to reach your goal?

Competitive analysis

By comparing your performance with that of your competitors – what they’re doing right and what they’re doing wrong you’ll identify areas in your business that can be improved. Gaining the competitive edge.

Monitor performance

Look at current benchmark metrics in order to identify industry standards that you should strive to meet or surpass. Benchmarking is an ongoing process, with performance monitoring playing a crucial part.

Strategic benchmarking

Strategic benchmarking is when you compare your performance with best-in-class performers. Your data collection shouldn’t be limited to your own industry. You’ll be looking at brands that have proved successful in a particular process.

This type of benchmarking will help with overall performance of your business. It looks at your long-term strategies, compared to other brands. Suggested improvements that result from strategic benchmarking are not quick fixes. You’ll be considering your core competencies, new product development, etc.

Competitive benchmarking

Unlike competitor analysis, where a brand tries to gain the competitive edge by jumping into areas missed – new features, countries to target, etc., competitive benchmarking involves the gathering of insights to show how their processes work, compared to yours. And, will identify industry performance standards.

Compare products, services, processes, methods. You’ll identify your position in your industry, and how to increase productivity and success.

Internal benchmarking

Collect data on your performance at different times – days, week, months, etc.  or during different situations- during a PR crisis, product launch, event – and find the areas that are weakest. Processes that can be improved, such as converting leads to customers, onboarding new team members, etc.

The advantages of internal benchmarking are that you have access to all the data you need, and it’s a quicker process.

Collaborative benchmarking

Some industries have trade bodies or consumer groups associated with them and these are an example of how collaborative benchmarking can work. These associations collect and publish data from all their members, allowing them to identify industry-wide trends and enabling effective reviews of best practices.

Performance benchmarking

Organizations usually look at one particular aspect of their business to establish performance metrics that allow them to measure their output against their own previous results as well as seeing how they compare to their competitors.

Process benchmarking

Larger businesses can look internally to obtain process benchmark data by comparing metrics from different branches of their operations or even different methods of completing the same process.

SWOT analysis

The SWOT process of benchmarking against competitors has a broader scope and works by establishing a business’s strengths, weaknesses, opportunities and threats. By taking a more holistic look at competitor activity, you can get an accurate picture of the sector’s landscape and how you fit into the wider market.