Constant improvement is what every entrepreneur wishes for. If your business doesn’t grow little by little, you will feel that it has stagnated. In order to grow, it is necessary to constantly improve and professional self-criticism.
One of the methods that will help us is comparing it with leading companies. This way, we’ll check if our product can improve or is good enough for consumers.
You have probably already carried out this comparison process. Since you were already making benchmarketing. What is that? Easy, it’s about taking references of other competing products to compare them and thus knowing the aspects of our company that can be improved.
It’s a very useful easy strategy to boot. But, it’s not only about the comparison of products. There is so much behind it…
What is benchmarketing?
This technique measures the success, comparing it with other competitors. The main goal is to know the products and services of our business that can improve. If we analyze the competition, we can have the keys and tools that enable the companies to achieve efficiency and a steady rise.
According to Fundeu (a non-profit, language related organization from Spain), this term means: “The benchmarketing technique consists of comparing the procedures of an organization with extreme quality standards” or “Plans for excellence are the result of a previous benchmarketing process”.
Certain criteria exist that are linked to this analysis, which are the following:
- Quality
- Time
- Cost
With the knowledge about other companies, you can also create a ranking of the best and the elements that you must improve to get to the top. Moreover, it can help you to detect areas, systems or processes that you can also improve.
Thanks to this kind of knowledge, you can have an advantage about the factors to take into account in a company to develop a successful product or service, and the elements to take into account.
Its main characteristics are as follows:
- Objectivity
This technique must be made with an objective point of view. Thus, it is quintessential to define the criteria to take into account and the metrics that will be used to make the comparison
- Analysis of trends
In order to make a good analysis, we can’t check the topics of the different enterprises, but it is necessary to identify the objectives of each business to verify that the path they are taking is similar to ours. Not only that, but we can know the habits and needs of our consumers this way, a very positive element to take into account.
- Good practices
It’s obvious that the goal of this practice is the self-improvement of our company. Which is why it is important to make the analysis with fixed thoughts with the conclusions, that is, we must obtain information that will help us later as a guide of good practices to follow.
Is benchmarketing important?
Below we’ll show some of the advantages that you’ll obtain if you start the benchmarketing:
- An increase in the sales department
This strategy allows you to create organizational elements that will help you achieve success, like for example, how many people are on the team, the tools they have or how much they’re selling.
- Motivation of the employees
If we mark realistic and achievable objectives (SMART), the employees will feel that they have a path to follow and that they’ll obtain them through effort. Also, it is important to have recognition programmes so that employees feel important for the company.
If you identify the different tasks and elements to improve, the efficiency and effectiveness are guaranteed. Moreover, this analysis will help you improve in areas such as customer service, sales or marketing.
- New opportunities
With the analysis, you will obtain benefits such as new opportunities to grow and change key elements for the company.
- Concise objectives
The main goal of this process is to understand why the competition has more success than our company. What do they offer? Once we know these aspects, we can define objectives according to our goals and monitor them to guarantee that it’s carried out in the best way possible.
Benchmarketing objectives
What do you want to achieve with this process? This might be one of the first questions you ask yourself before implementing this strategy. Here are some goals to be achieved when starting up.
- Guidance of the process and not the result.
- Interests and needs of the consumers.
- Improvement and growth of your business.
- Increase in efficiency and effectiveness.
- Develop the process of information exchange.
- Knowledge of the best course of action
Types of benchmarketing
Benchmarketing is not a process that is carried out in a unitary form in all companies. Depending on the goals to achieve and elements to analyze, you will realize different types of benchmarketing. Down below are the different types of benchmarketing:
Performance benchmarketing
This one is related to the way of making a specific activity through personnel, technology and selected processes. Thanks to this process, you will obtain information about the elements that don’t work, as well as why they are not making your work correctly. With this analysis, good practices that the company can make are obtained.
Practice benchmarketing
This is related to the way a specific activity is made through personnel, the technology or the selected processes. Thanks to this process, you will obtain information about the location of the elements that do not work, alongside the reason why they are not doing the work correctly. With this analysis, good practices that the company is able to carry out are obtained.
Internal benchmarketing
The comparison of metrics, products, departments, used programs or practices, are the basis of this kind of benchmarketing. Which is to say, an internal comparison is made among the departments to better know the effectiveness of each and one of them. This practice is primarily made among big companies.
External benchmarketing
In this case, the comparison between metrics and the practices are made with the competition. In order to do that, it is necessary that other companies want to take part and another company to compile the obtained information. This process can be very useful to the participating companies, but it requires a lot of time and effort.
It is the near-complete state of benchmarketing. It is very common to use the DAFO technique or specific aspects of the competition like SEO or SEM.
When do you have to implement this strategy?
There are certain elements that will require you to implement benchmarketing strategies. The following are some of the symptoms that will help you stay alert to implement this strategy:
- Obsolete work methods.
- An increase of competitors around your area.
- Market share.
- Business momentum at a standstill.
- The need to improve the process.
- The objective of wanting to surpass the competition
How to benchmarket?
You have decided and want to implement this strategy of benchmarketing. You’re probably wondering where to start. Here are the steps to follow:
1. Define the objectives
First and foremost, you must create specific questions that you will explore later on through quantitative and qualitative data. The main question to begin is, what do we need to achieve?
Ultimately, you must do market research in which you compare the processes inside your company or a competitor of the same sector. When setting targets, we will obtain the metrics and sections that we must use in our benchmarketing analysis.
The KPI and metrics will help us determine the success and failure of the campaigns, departments or other company processes. The objectives will be introduced on a program like Google Analytics to achieve them through analysis via quantifiable metrics.
2. Identifying the competition
If the benchmarketing you have chosen is external, you must compare it with another company that is part of your same sector. We can’t make an analysis of all the companies in our fields, so we have to make a comparison with specific businesses.
In order to make a detailed analysis, we must select 5 or 10 companies from the competition. There are big criterias to take into account:
- Companies similar to yours. Especially to see what elements you can improve in relation to the competition.
- Aspirational companies. Sector benchmarks that can be useful to learn good practices.
- Companies from the competition. With this step, we will have to identify the best tactics that other companies use to see what works best in our sector’s market.
3. Data compilation
The turning point is in the data. In this step, we will compile the necessary information to analyze. We will do so guided by the KPI. There are three different ways of compiling it:
- Direct
Information of old employees, providers and customers of the companies that we can consider as competition.
- Indirect
Some of the practices that you follow to compile information are: social listening, social media analysis, catalogs, posts, product surveys…
- Cooperative
Agreement between companies to exchange information
4. Analyze the information
The way the information is organized is key to carry out an analysis. In this step we will focus on the comparison of our own metrics with that of other companies. Thus, we will obtain a list of elements to improve and actions to implement.
We must always have in mind that all of this process is to obtain conclusions and good practices to follow. As you make this analysis, you can discover what’s failing in your company, whether it is a lack of staff, knowledge or professional elements that do not fit the company.
5. Set objectives
After the information analysis, you must communicate it to the appropriate people of each department, so they become aware of what works and what doesn’t. Once this process is done, we must set objectives that have the following characteristics:
- Specific.
- Measurable.
- Clear.
- Aligned with the company
6. Action plan
We would already have the information, so that we can define concise actions that align with the objectives to achieve. Each determined action must be related to a task, a person in charge and a date to finish it.
In the end, you must create a plan that marks the difference compared to the previous one, that includes changes you have identified during your analysis and, thus, minimize the errors. In order to do that, you must create realistic goals that are achievable and are aligned with the company’s vision.
8. Monitorize the results
When you create the plan, you cannot leave it behind and not create a follow-up. Once in a while, we recommend that you supervise the results and actions that you have interposed. Thus, you will be aware of whether your plan works correctly or not.
Not only that, you must send all the related information with the plan to the employees that are well fledged and have the necessary experience to make the assigned tasks.
As you can see, benchmarketing can help you to both improve, as well as position yourself in the market. Therefore, if you have a feeling of lethargy or don’t register improvements in your company, it’s time to set in motion this strategy to identify the mistakes you might be making.
What are you waiting for to improve and grow in respect to the competition?
