It is said that imitation is the sincerest form of flattery.
That’s the idea behind benchmarking, an exercise that compares your operation to your competitors.’
The specific areas of comparison depend on your business and how you choose to differentiate yourself from your competition. It works for all kinds of business, industrial products and consumer services, business-to-business or business-to-consumer.
Common elements that companies use to benchmark themselves include price, service, quality of products, delivery response, selection of goods or services, exchange policies and technical support.
The process involves selecting those elements that you chose to compete on and then examining how your competition performs in each area. Those that rank highly in each category is said to exhibit “best practices.”
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It is highly unlikely that any company achieves best practices for every category.
Each of the elements has a cost associated with it and it is usually cost prohibitive to offer the best and still have the lowest cost. It all comes back to the elements that support your business model.
To start, think of a product or service that you have recently used and whether you had a positive experience. If so, it is likely that the seller ranked high in the elements that are important to you.
Try it with your own business by asking your customers how you can improve.
Ralph Hershberger is executive vice president and board member of SCORE Southern Arizona, a nonprofit group that offers free small-business counseling and mentoring by appointment at several locations. For more information, go to scoretucson.org or call 505-3636.