Imagine your brand’s struggling in some capacity. Perhaps sales have plummeted in the last quarter, or employee turnover has skyrocketed over the past year. You’re not sure what you’re doing wrong, but you need to find the root of the problem as soon as possible to avoid catastrophic consequences. As a leader within your industry, you’re aware that one or more of your competitors consistently excel in this particular area, and you’d love to transform their secrets into your success. What should you do now?

Brands that are looking for the “quick fix” might opt for competitive analysis or research, which IMPACT defines as the “field of strategic research that specializes in the collection and review of information about rival firms.” However, despite the notion that it’s crucial to establish what type of financial threat the competition might pose in both the short and long term, analysis and research often comes across as shady and deceptive to others throughout your given industry, putting your company’s reputation on the line. Instead of copying or mirroring brands that are making all the right moves, leaders should use benchmarking to improve obvious weaknesses and identify latent strengths in an effort to adapt and grow according to market demands.

According to the Business Dictionary, “benchmarking” can be defined as the “measurement of the quality of an organization’s policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers.” Essentially, benchmarking empowers the executives at leading companies to develop a barometer that allows them to gauge how their organization compares with others across the industry. Benchmarking serves as a valuable “reality check” that enables leaders to grasp how their organization stacks up against their direct competitors and adjacent industries in general.

Similarly, its primary objectives are:

  1. To determine what and where improvements are called for throughout the organization.
  2. To analyze how other organizations achieve their high performance levels.
  3. To use this information to improve performance and procedure.

Benchmarking reveals how your company measures up when compared to the industry standard and highlights ways in which your brand can grow over time. Not only can this process uncover issues that have gone overlooked, but it can also provide proof that improvements need to be made immediately, as C-suite executives often fail to allocate the necessary funds and resources until it’s too late.

As iSixSigma indicates, there are three basic classifications of benchmarking: internal, competitive, and strategic.

Internal — Used when a company already has established and proven best practices and they simply need to share them.

Competitive — Used when a company wants to evaluate its position within its industry or needs to identify industry leadership performance targets.

Strategic — Used when identifying and analyzing world-class performance in times when a company needs to go outside of its own industry.

“For innovation professionals who do want to take action, benchmarking best practices can provide ammunition to break internal log jams and convince the C-suite that risk can potentially be mitigated when undertaking new initiatives,” Scott Lenet, co-founder and president at Touchdown Ventures, writes for Forbes. “For those with existing programs who are struggling to communicate value, benchmarking is an opportunity to articulate strengths and address areas for improvement. No one likes to be audited or visit the doctor for an annual physical, but those practices exist for a reason, too.”

He adds, “Innovation programs aligning with industry standards may be more likely to build a positive reputation in the ecosystem, provide ongoing value to parent corporations, and avoid shut down.”

“Benchmarking by specific industry allows you to stack yourself up against other companies and improve your organization,” Berni Hollinger writes for CH Consulting Group. “Who has the best sales per salesperson and how do you stack against them? Which company has the most efficient customer service department and how did it happen?

“In a simplistic sense, it allows you to compare your company against others – not financially, but in best practices,” she adds. “Don’t get me wrong, better processes results in higher profit to the bottom line. How can it not? Each time you improve upon a process or procedure, it saves time, equipment or supplies. Less time spent on the operational end means more time available to increase revenue.”

Periodic benchmarking allows companies to continuously audit their standing within their industry and make changes as necessary in order to preserve their competitive advantage. Because the customer experience remains at the heart of each decision an organization makes, it’s in everyone’s best interest to be up-to-date on industry standards and expectations at all times. Companies that refrain from the benchmarking process until issues arise will find themselves at a disadvantage, as it’s best to be aware of the current and emerging trends throughout the industry.

In the end, your company will reap an array of benefits, including improved quality and performance because, as an organization that’s constantly in-tune with the current industry standard, your brand will continuously strive to bring its products and services up to par with—and inevitably surpass—the norm. Doing so will also remove the tendency to become complacent, as you and your employees will have the insight and incentive necessary to push performance beyond the industry standard to remain competitive in an increasingly saturated market.

Consistent benchmarking will reveal weak spots early, allowing your organization to initiate proactive measures that reinforce your leadership and dedication to the overall customer experience.