Benchmarking

What is benchmarking and what is it for?

Benchmarking is a strategic analysis of the leading companies in your own industry to learn their best practices, in order to identify them and, as far as possible, apply them to our business. It can also be applied internally for making improvements.

Benchmarking comes from the English term benchmark, which means reference, and it essentially means studying the competition and drawing inspiration from it to improve our own business.

1. Objectives of benchmarking

The main goal of benchmarking is to find out how to improve the performance of your work processes by adapting what others (or even your own company) are doing with good results.

To do this, indicators or KPIs are set to monitor and analyze both the internal processes of our business and those of our competitors. Benchmarking can only be done properly with comparable goals and an understanding of the results.

2. Benchmarking methodology

The basic elements to follow in any benchmarking process are:

Establish the areas of analysis.
Improve and broaden the knowledge of your own company.
Get to know your competitors in greater detail.
Set achievable and realistic objectives.
Identify areas that can be improved.
Bring our business strategy closer to the best practices in the market.
Reduce costs and optimize processes.
Eliminate execution errors.
Improve internal and external communication.
Create successful and measurable strategies.

3. Types of benchmarking

Although the most common use of benchmarking is usually applied to the analysis of competitors, this type of strategy can also be applied in non-competing companies and even within our own organization.

2.1 Competitive benchmarking

Competitive benchmarking is the most common type and studies other companies in the same industry to learn about their practices. This helps identify their strengths and weaknesses, so you can improve and become more competitive.

2.2. Functional benchmarking

Functional benchmarking is becoming increasingly common and is based on an analysis of the processes of successful companies that are not from the same sector, to identify elements/practices that may be advantageous to adopt as our own.

2.3. Internal benchmarking

Internal benchmarking, as its name suggests, is based on the analysis and evaluation of areas within the company itself to compare their performance and thus strengthen all of them with the best practices detected. Basically, it means spotting the tasks that one department performs best and trying to replicate them in the others.

Tips for applying benchmarking to your project

1. Be objective

Some people think benchmarking means copying the competition or stealing their strategies, but the truth is that this is far from reality.

Being able to objectively assess what brands similar to yours are doing is what will really enrich you and let you come up with your own strategies based on your goals, and then carry them out effectively.

Let’s take the example of two brands that are extremely alike and offer similar products: McDonald’s and Burger King. Each one has its own differentiator and offers a different experience.

What’s more, it’s a fact that some people love Burger King and would never switch to McDonald’s; they usually praise the more natural taste of the meat, for example.

On the other hand, McDonald’s fans tend to highlight the fries and ice cream, beyond the burgers. So it’s clear that each of these companies has focused on highlighting something different about its brand and keeping it as a distinctive trait.

If either one copied the other, it would most likely lose that “special value” that customers see in it and would end up losing the fans it had as a result.

2. Know what’s trending

Another very important aspect today is trends and being part of what everyone is talking about, but be careful not to lose your essence just to fit in.

Your brand probably can’t take part in every single trend that comes along, but in the ones that suit your brand, make sure you get noticed.

It can be something as simple as using a song that’s trending at the moment in your videos, or something more complex like running a campaign around a trending event such as the Super Bowl, for example.

Keeping up with what’s happening in the world will help you take advantage of these opportunities and ride the wave at the best moment, so everyone sees you.

After that, it’s up to you to win over those users by offering good-quality products or services and excellent customer service.

3. Focus on what others do well

A common mistake is to look only at the bad things, or where the competition failed, so as not to repeat their missteps. And it’s true that this can help you avoid falling into the same trap; however, it’s more valuable to focus on the things they’ve done well and the results they’ve achieved through those actions.

This can serve as inspiration, a reference or an example so that, from your own position, you can create the strategies that will help you meet your own goals, and you can even challenge yourself to surpass what others have achieved.

Always keep in mind that each brand has specific goals and that its actions should be aimed at meeting them. This will keep you from getting lost in the sea of competition around you.

4. Create a comparison chart

With the help of a comparison chart, you’ll see more clearly the pros and cons, the highs and lows, so you can develop truly effective strategies.

It will also help you look at actions objectively and implement whatever suits you best.

We stress this because when reading online you may come across many examples that end up being a copy or a direct attack, and that isn’t really benchmarking.

In this comparison chart, make sure you include not only how they are alike, but also how they differ. This way, you’ll have a clearer picture of the overall situation and can then drill down into the specifics.

5. Put what you’ve learned into practice

After completing all the previous steps, it’s time to get to work, lay out all the information you’ve gathered and implement the actions that will help you reach your goals.

Define your objectives, get to know your audience and develop strategies focused on your goals, always in line with your brand’s values.

Finally, start carrying out those 100% focused and personalized actions, which are what can really ensure the positive results you’re hoping for.

6. Evaluate your results

Lastly, always evaluate the results of each of your actions, and even evaluate how each one is performing while it’s running. Don’t be afraid to make changes halfway through if you realize they’re for the better.

Be flexible and strategic, and listen to what your audience is saying. If you thought an idea was brilliant but the audience didn’t connect with it, don’t cling to it or waste time waiting for it to improve. Dare to up your game as you go.

In such a fast-changing world, we shouldn’t marry an idea or a strategy forever, especially when the results depend on third parties or people outside the company.

Likewise, whatever really works well for you, keep it and give it an extra boost.

For example, if you ran a campaign to promote a particular product or service and it exceeded your expectations, invest in it, add paid ads or extend it by increasing the benefits.

Keep track of the numbers, because that’s how you’ll be able to see what works and know whether a return on investment is guaranteed. So, the more you invest in it, the better you’ll do.

Many brands have a single star product, and although it isn’t advisable to put all your eggs in one basket, there’s nothing wrong with highlighting what your audience prefers.

Another thing you can do is cross-selling, perhaps pairing your star product or service with another one that may not be as popular but that you know is very good.

You can plan all these actions based on the feedback you get from your customers; this will always be key to improving day by day.

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