While you are developing your business, it is important to keep on eye on your market position. A great way to do this is through benchmarking, where you measure the performance of your business against that of your competitors.
- Establishes industry standards
- Identifies strategies to achieve the best possible relationships with your customers and gain the best possible results on your bottom line
- Observes how your competitors achieve these standards and utilise these strategies
- Applies this knowledge to achieving and maintaining these results yourself
Benchmarking is about acknowledging your strengths and weaknesses, and identifying areas of opportunity and improvement – based on your competitors’ performance in the marketplace. It is imperative to always be aware of what your competitors are doing and how successful they are in doing so.
A good benchmarking review can help you in your business planning and cash flow management. Benefits of benchmarking include:
- Increased customer understanding
- Competitor awareness
- Emphasis on innovation and improvement
- Increased efficiency and productivity
- Improved customer retention and customer satisfaction
- Higher profits