Samuel Mandillah , Ajua Data Science Consultant
By Samuel Mandillah,
I started my first business when I was pretty young, a freshman at college, and didn’t know much about business. The only thing I knew, at that time, was that I had a lot of time on my hands plus I had the curiosity to explore and try my hand at making money. So one day I woke up and talked to an older friend, who also happened to be ‘available’ at the time (he later got a job offer and left me), and we agreed to start a fast food joint next to college.
The first days were tough in all definitions of the word. We huddled in darkness not knowing exactly what we were doing wrong. The profits were meager and the debts started accumulating. Then one day, while talking to one of my suppliers, she asked me whether we had tried to check what the other food joints around town were doing.
I mean things like: what was the pricing of their products, who were their customers, what products were selling more, where did they source their raw materials, what were the rates for the workers’ wage, after how long did they pay them, what were the best hours of operation and many more other aspects concerning operations and customer satisfaction.
It then dawned on us that we had done very little if not nothing in regards to market research and customer loyalty. We spent the next few weeks gathering information and implementing critical changes that we had gathered from the industry leaders in the area! Needless to say that within the next three months our business was booming and we had to relocate and get a bigger place on the busiest street.
What I did not know then, something that I have learned since joining Ajua, is that this process of measuring products, services, and processes against those of organizations known to be leaders in one or more aspects of their operations is called benchmarking and it is a very important tool that companies can use to stay up-to-date with trends within their industry related to sales, customer service and more. Benchmark reports are useful in helping organizations determine the best standard of performance based on other companies’ success.
At Ajua we publish periodic reports on different industries highlighting the trends, market leaders, and Customer feedback on these industries. Our aim is to enable other players in the industry to align themselves better to vear forward. Our most-followed report is the Net Promoter Score (NPS) Benchmark report in which we take a look at how key players in different industries are performing in terms of Customer Experience and Customer Loyalty. Below, we explore reasons why benchmarking in business is important and tips for successful benchmarking within your organization.
To begin with, benchmarking allows a company to compare its own products, operations, and processes to other companies. Typically one would compare themselves with those businesses within his industries that are succeeding and in so doing work on improving internally to increase overall performance and revenue. The result of this is that there will be increased effectiveness and efficiency since individuals within the organization will be able to identify any potential areas of improvement internally.
Secondly, one’s team is able to set clear and objective goals because they will understand why the competition is succeeding. Benchmarking also provides an avenue for discovering new opportunities for business growth and success. Performing benchmarks allows one to see aspects of your business that need improving so that they can get at par with the growth and success of others within their niche. Furthermore, benchmarking helps one to understand their sales performance and remove any barriers that might hinder the overall success.
One can easily examine why another company is selling more than them by looking at factors such as how many team members they have on their sales team, where are the sales teams located, and whether the competitors are working with other organizations in the form of partnerships. Other factors they might look at include; how their competitors are marketing and advertising their products, any perks they are offering their customers for repeat business, and where they are selling their products and services. One can also look at the organization’s internal situation. Assessing why a sales team performs well will help you determine what changes one can make internally for increased performance. Among other reasons why Benchmarking is important is that; it helps provide an opportunity to motivate your employees to want to be better than they currently are by setting clearer, attainable, and realistic goals. Finally, an obvious reason why perhaps you should benchmark is that it helps you understand your competitor and thus work to improve your product to compete favorably on the market.
On the tips for successful benchmarking, always keep in mind the following; First determine what areas need improvement within your organization, then find the highest-performing organizations within your industry. Next, take time to study the competition and finally create and implement a performance improvement plan.
