As a business owner, it’s important to know how you stack up against the competition. Benchmarking is the process of comparing your company’s performance metrics against others in your industry to identify areas where you need to improve.
If your company transitioned to working remotely, you must also use digital benchmarking tools to ensure you’re still on track.
Here are ten easy methods to start:
Look at Financial Ratios
Financial ratios are a good place to start when you’re comparing your company’s performance to others. There are dozens of different ratios you can calculate, but some common ones include gross margin, operating margin, and return on equity.
You can find financial data for publicly traded companies in their annual reports or on sites like Yahoo! Finance. You may find this information in industry reports or research firms specializing in benchmarking data for private companies.
Compare Customer Satisfaction Scores
Customer satisfaction is another critical metric to track. If you have products or services that customers can rate, you can compare your scores with other companies’ in your industry.
There are various ways available to measure customer satisfaction. One common method is the Net Promoter Score, which rates customers’ loyalty to a company on a scale from -100 to 100. You can also use surveys or customer interviews to gather feedback.
Look at Employee Satisfaction Scores
Employee satisfaction is another key metric that can impact your company’s performance. If employees are happy, they’re more likely to be productive and stay with your company for the long term.
One common way to measure your employees’ satisfaction is the Gallup Q12 survey, which asks questions about engagement, satisfaction, and other factors. You can also use your company’s internal surveys or data from sites like Glassdoor.
Compare Operational Metrics
Operational metrics can give you a good idea of how efficient your company is. If you track things like customer acquisition costs, employee turnover, and product defects, you can start to see where you need to make improvements.
You can find benchmarking data for operational metrics from research firms or industry associations. You can also compare your own company’s data over time to see if you’re making progress.
Use Benchmarking Tools
A few different software tools can help with the benchmarking process. These tools can automate some steps, like collecting data and calculating ratios.
Some popular benchmarking tools include Birst, Tableau, and IBM Cognos. Other free options, like Google Sheets and Microsoft Excel, are also available.
You have to remember, though, that before you can measure your progress, you should implement effective strategies in the first place. This is especially true if you shift to a digital workplace. Read more here about effective strategies for a successful digital workplace.
Join an Industry Association
It’s always best to join an industry association to connect with other companies and compare benchmarking data. Many associations collect data from member companies and publish reports on various topics.
You can also use the association’s website or forums to ask questions and get feedback from other members.
Hire a Consultant
If you want more help with the benchmarking process, you can hire a consultant. These professionals can assess your company’s performance and help you develop strategies for improvement.
Look for consultants with experience in your industry or who specializes in benchmarking. You can find these professionals through research firms, industry associations, or online directories.
Attend Industry Events
It’s also an excellent idea to attend industry events to connect with other companies and compare benchmarking data. These events often include presentations and panel discussions on various topics.
You can also use the event’s website or app to network with other attendees. Many events also have an exhibit hall where you can learn about new products and services.
Read Industry Reports
Reading industry reports is a good way to stay up-to-date on benchmarking data. These reports are usually published by research firms or trade associations. They often include data on various industries, so you can find ones that are relevant to your business.
You can usually find industry reports online or through subscription services.
Talk to Other Businesses
Finally, don’t forget to talk to other businesses about benchmarking, especially those with high performing digital workplaces. This is a great way to get feedback and advice on the process. You can find other businesses through industry associations, online directories, or referrals from friends or colleagues.
When you contact other businesses, be sure to ask about their experiences and what they’ve found helpful. You can also ask if they have any suggestions on resources or tools that you can use.
