Market Research Special Case: Benchmarking – The Power and Folly

Three tips to maximize benchmarking impact

Looking outside your own organization to learn from others can be tremendously insightful. Benchmarking is powerful, but without careful attention, can run folly to poor construction resulting in lackluster usefulness. Effective benchmarking takes time – it is more than just scanning websites to compare organizations. So, be on-guard for quick-turnaround requests and ensure you have enough time to do the job well. In over two decades of experience, I have found three tips to ensure that benchmarking is as impactful as possible.

First, distinguish what is ‘common practice’ vs. ‘best practice.’ Scanning the businesses in your industry might reveal similar practices, but that doesn’t necessarily mean these are the right practices. You need to selectively identify the activities that you have strong reasons to believe would support superior performance for you and record those in your benchmarking.

Second, it is valuable to also look outside your industry for transferrable concepts and processes. While all businesses tend to view theirs as unique, a deliberate analysis of processes and functions reveals how much can be learned from businesses that have already successfully resolved similar challenges. For example, a retail fashion business seeking to improve customer engagement and loyalty can learn key insights from the personal training business which also relies on developing loyal relationships with clients to underpin a successful business model. 

One way to do this is to brainstorm “related worlds” where you associate your business or parts of your business to other industries. In this way, you begin to think of businesses in related industries to better see what makes them thrive and challenge your assumption what might work for you.

Third, pick up the phone – schedule a lunch or breakfast (my personal favorite). Speak with other businesses in your industry or related worlds. Have that direct dialog. If competition is a concern, then converse with a similar business in a different geographical location. Good business leaders want to see more businesses succeed. The positive cycle of mutual innovation and pushing each other has additive value for all.

The power of benchmarking is that for any business to succeed, it has to distinguish itself from the pack, even if only slightly. Benchmarking provides windows into how that can be done. This includes picking off ideas that foster superior performance vs. those that just drain operations because they feel necessary. It includes transferring experiences clients have from one part of their lives into another. It fosters the inside industry insight needed to make a business succeed. Collectively, all these nuances make a powerful impact.

2 thoughts on “Market Research Special Case: Benchmarking – The Power and Folly

  1. Brady Deaton Reply

    Excellent assessment. More businesses, organizations, and educational institutions, especially universities, would benefit by heeding this advice. Good work!
    Keep it up, David!

  2. Pam Fitzgerald Reply

    David,

    Thanks for your unique take. Really appreciate that you are suggesting “textural” research and differentiation by best, not “common” practice. Keep writing these…we learn from you every time!
    Pam

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