Your financials may look good, your marketing campaigns might be performing, and your customers may be spending. But how do you know if performance across these business areas is improving? And how does your business performance compare to your competition?
That's where benchmarking comes in.
Monitoring your business' key performance indicators (KPIs) or metrics tells you how your business is performing. Comparing your performance to similar companies helps you to evaluate performance and identify areas for improvement.
What is benchmarking?
Benchmarking is the process of measuring your business' performance – across finance, marketing, product, services, operations – over time and comparing it to similar companies to establish a target performance level and to discover any gaps in performance. Where you identify gaps, it's an opportunity to evaluate your strategy and improve it.
Focus your benchmarking efforts
Start by determining the processes in your businesses that are critical to achieving your business' goals. These usually span sales, marketing, customer satisfaction. Consider your objectives in these areas and which metrics you can use to track performance.
Your objectives will vary depending on which part of the business you focus on. The metrics that you track should be relevant, actionable, and closely aligned with your objectives in that area. For example, if you're assessing sales performance, you'll focus on metrics tied to the objectives set at various stages of the sales funnel – from awareness to purchase through to loyalty.
Identify your competitors
Competitive benchmarking requires competitor research. Remember you're looking at direct competitors – businesses that are similar to yours in industry, market, size, etc. Top tip: ensure they're successful competitors.
Google is your friend and a great way to discover similar companies. It's also a source of information on them. Search for public records such as annual reports, company filings, or government records. Business benchmarking reports by industry are also available and offer a high-level benchmark. The amount of data you'll unearth can be overwhelming but stick to collecting data directly comparable to the metrics/ KPIs you identified in your business.
Data, data, data analysis
Businesses create an endless amount of data. Benchmarking asks you to collect that data and analyze and compare it. For example, if your focus is marketing, and your objective is to improve your email marketing campaigns, you'll need to understand how effective you are at reaching and engaging your audience.
Internally, metrics such as campaign performance, subscriber growth, open rate, and click-through rate, can help you assess the success of your email campaigns. Read together – and alongside analysis of your content – you can gauge what resonates with your audience, what doesn't, and where there is room for improvement.
Connecting Mailchimp to your 9Spokes dashboard enables you to monitor this information easily.
Accessing your competitors' email marketing data may not be possible, but you can evaluate performance based on content. Consider the following:
Email templates – are your email templates modern and sleek, shabby, or chic?
Email content – is the focus text, image, video? Is the material promotional, or does it take a more educational angle?
Regularity – do you send a similar amount/ variety of triggered emails? Do you have similar touchpoints? Are there some you're missing?
Promotions – compare deals and offers.
Where do you get access to this content? Simple, sign up for emails – your own and those of your selected competitors. Record the emails you receive, documenting data such as subject lines, days/ times and frequency, content type, promotions, positioning, personalization.
If metrics are the 'what', then analytics are the 'so what?'. Once you have the what, you need to ask probing questions:
In what ways does your business excel?
What are the contributing factors?
Is there room for improvement?
In which areas is your competition out-performing you?
What are they doing differently?
Use what you learn to develop a strategy for improvement.
Continue to monitor
Data has brought you to this point so, as you start to adjust your processes and implement new strategies, remember to monitor your progress. Are the changes useful?
Change takes time, but it can produce a positive effect.
Access to data has changed marketing campaigns.
In a saturated market, how do you make your product, your store, your brand standout online?