Measuring your performance by benchmarking
Benchmarking involves measuring the performance of your business against a competitor in the same market. Comparing your business to others is a valuable way of improving your understanding of your business performance and potential.
Benchmarking your business provides insight into how well each aspect of your business is performing, allowing you to discover what areas need improvements while helping you to develop a plan towards achieving those improvements.
At its best, benchmarking is used as a tool to help your business evaluate opportunities for improvement, such as:
- identifying and prioritising specific areas of opportunity
- understanding your customers needs better
- identifying your strengths and weaknesses
- setting goals and performance expectations
- monitoring your performance and effectively managing change
- understanding your competitors to become more competitive.
Six steps to successful benchmarking
Use these steps to practically benchmark your business against your competitors:
1. Identify what you're going to benchmark
- Start with targeted and specific questions – the questions should be specific, capable of being explored using qualitative or quantitative research efforts, and in line with your business strategy.
- If you haven't already, it's recommended to do market research.
2. Identify your competitors
- Write down a list of who your competitors are – most businesses benchmark within the same industry.
- Identify effective tactics used by your competitors, and areas in which their business is performing better.
3. Look at trends
- Look at recent statistics to analyse any current trends for insight into how fast your industry is moving, and how you can plan ahead to keep your business in tune with customers needs.
4. Outline objectives
- After the results of the analysis have been interpreted and communicated to the appropriate people, goals should be established – these should be concrete, attainable and in line with your corporate strategy.
- Make sure you list all your goals in your marketing plan.
5. Develop an action plan for your objectives
- Define specific, concrete actions to be taken.
- Your actions should detail the tasks involved and include specific names and dates associated with each task.
6. Monitor your results and implement an action plan
- Continuously monitor the results of the benchmarking efforts and ensure the action plans are consistently applied.
- Download our One Page Action Plan template.