Benchmarking is a tool that businesses use to compare a company’s performance against competitors or itself, with the ultimate goal being to identify areas for improvement to close the gap between an organization and its competition. There are several benefits to benchmarking, including:
1. Creating accountability.
You cannot hide from your company’s shortcomings when you benchmark. You will see exactly where improvements are needed, whether that be from an employee or from the service you sell. Once you have clearly defined goals and have set your expectations for your employees, it will be easier to hold your people accountable for the work they are doing (or not doing)! Additionally, by reflecting on your company’s past performance, you can see where your company has succeeded and where it is struggling. Simply put, you need to see what is hindering your company’s fullest potential, and once you have, you can understand where and why missteps are being made.
2. Encouraging improvement.
Benchmarking can also inspire continuous improvement. You can create goals for your company based on what your results are from benchmarking. For example, if your company has mostly antagonistic or transactional buyers, you will need to improve your customer relationships. By knowing what you need to improve on, it will be easier to succeed in the future and edge out your competition.
3. Creating more value for the customer.
As previously established, if you can pinpoint where your company is lacking, you can discover ways to improve your problem. This will ultimately create more value for your customers, because you will likely be improving their customer experience. Perhaps your customers complain about your wait-times or feel like their point of contact is not knowledgeable in their industry— this can be remedied by benchmarking and ultimately create more satisfied customers.
4. Your business will be more competitive.
You look into where your company needs improvement! That alone is a big step. Now, you can compare yourself to the industry average and your competitors to get a solid picture of how you measure up.
5. Continuous growth.
Remember, you cannot fix mistakes that you do not know you have. By reflecting inwards, you can see where you are losing money. Maybe it is in your antagonistic or transactional clients, or your business costs are unnecessarily high. Whatever the reason is, you can fix it by benchmarking, thus making you more profitable and competitive.
Why do you think benchmarking is (or is not) important? Comment down below! After that, follow us on Linkedin at “Encompass-CX” for more blogs and other updates!