What is benchmarking?
Benchmarking is a process that involves measuring the performance of your business against a competitor in the same market. This will give you a better understanding of your business performance and potential.
Benefits of benchmarking your performance
Benchmarking allows you to:
- identify and prioritise parts of your business that could improve
- understand your customers' needs better
- identify your strengths and weaknesses
- set goals and performance expectations
- monitor your performance and manage change more effectively
- understand your competitors to become more competitive.
How to benchmark your business performance
Follow these steps to benchmark your business against your competitors:
1. Identify what you're going to benchmark
Create targeted and specific questions that:
- you can explore using qualitative or quantitative research efforts
- align with your business strategy.
If you haven't done market research yet, our guide can help you come up with appropriate questions for your competitors.
2. Identify your competitors
Write down a list your competitors. Most businesses benchmark within the same industry.
Identify the following:
- effective tactics that they use for their business
- areas in which their business is performing better.
3. Look at trends
Look at recent statistics to analyse any current trends in your industry, including how fast your industry is moving.
Consider these trends and how you can plan ahead to keep your business in tune with your customers' needs.
4. Outline your objectives
After you've interpreted the results of the analysis and communicated them to the appropriate people, you need to come up with some goals for your business. Your goals should be:
- in line with your business strategy.
Make sure you list all your goals in your marketing plan.
5. Develop an action plan for your objectives
Define the specific, concrete actions needed to achieve your goals.
Make sure each action includes the:
- tasks involved
- person responsible for each task
- date for each task to be completed.
6. Monitor your results
Continuously monitor the results of the benchmarking efforts and ensure the actions are consistently applied.
Create a one-page action plan using our template. You can include your action plan in your business plan.