In today’s data-driven culture, benchmarking data is a must-have tool—not only for firms, but for clients.
A growing number of firms rely on benchmarking to evaluate where their organizations stand in comparison to other, similar organizations. Firm leaders also use the information internally to improve their team’s performance.
But it shouldn’t stop there. Firms must also pass along the benefits of benchmarking data to their clients by showing them where the client’s business and processes stand in relation to other clients within their industry. Why? Because data is knowledge; knowledge leads to better planning; and better planning leads to success.
Let’s start with the basics of benchmarking, and then we’ll cover the top four reasons firms need to offer benchmarking data to their clients.
In simple terms, benchmarking measures the performance (i.e., quality, time, cost) of a company’s products, services and processes. It’s a tool that allows businesses to compare how they perform internally and externally—not only against competitors, but against other industries as well.
In this article, we’ll consider three types of benchmarking:
All three are important for process and performance improvement. You want your clients to grow, improve their processes, increase quality, decrease costs and surpass revenue goals—ultimately gaining a competitive edge.
In addition to improving overall business knowledge, benchmarking promotes employee engagement, connects purpose and culture, and keeps everyone accountable. This leads to optimal performance, improved processes and procedures, and enhanced client satisfaction.
Now, let’s discuss four reasons your firm needs to offer this comparative data to your clients.
When you provide clients with benchmarking data, they can identify and implement best practices to improve performance and edge out the competition. But how exactly do they do that?
It starts with KPI (key performance indicators) development. KPIs measure an organization’s success based on strategic goals and objectives. They identify gaps in performance so businesses can make adjustments. And benchmarking provides the baseline that makes the development of KPIs possible.
When businesses develop KPIs, they’re forced to review past and current processes, exposing gaps in performance. In doing so, they create the opportunity to implement a plan (i.e., set strategic goals) toward improvement.
Rather than rely on the outdated mantra of, “This is how we’ve always done it,” businesses can instead focus on, “How can we do this better?”
Benchmarking gives companies the support they need to start process improvement within their organizations. Leaders can use data from KPIs to inform and train (or re-train) staff to close performance gaps.
As an example, when a company onboards a new employee, instead of introducing the employee to things as they happen (with no processes in place), an employee is given a 90-day onboarding plan with a checklist and timeline of everything they’ll be learning.
Where the lack of a plan can lead to confusion, frustration and even high turnover, having a plan introduces a strategic, streamlined onboarding process so nothing is missed. The employee is onboarded quickly, within a specific time frame, and starts their job with the knowledge they need at their fingertips.
There’s one particular aspect of a firm where benchmarking not only promotes firm improvement but is also beneficial to clients: Advisory services.
Use the data you already have in your CRM, accounting application or additional reporting tools (e.g., Fathom, Tally Street by Rootworks) to your advantage. Based on the products and services you offer, it’s important to productize services you may currently be providing on a consultative basis (i.e., charging an hourly rate to offer advice on retirement or cash flow management) into value-based, off-the-shelf advisory services.
Offering advisory services improves quality on both sides of the equation. Your firm offers streamlined services tailored to your clients, who benefit from the expert and experienced advice they receive and then use this information to their advantage to improve the quality of their products and services. Your clients can plan and set achievable goals, determine what isn’t working and make necessary adjustments to improve struggling aspects of their business.
To be competitive, businesses need to know where they stand in comparison to other companies within their industry. This knowledge arms them with the information they need in order to make the right adjustments to push past the competition.
Let’s use the restaurant industry as an example. (Keep in mind there will be differences between fast-food restaurants, casual eateries, fine dining establishments, etc.) Below are four benchmarking examples restaurant clients can use to compare where they stand against their peers.
When your clients understand their competitor’s success, it can contribute to the success of your clients. Do their competitors have a more efficient seating process for indoor dining? How long does it take from order to food delivery, and can that be improved? In the era of convenience, does offering pickup or delivery services help them to blow past the competition? These questions can all be answered with benchmarking data.
Providing benchmarking data to your clients is the encouragement they need to be proactive instead of reactive in their industry’s competitive landscape. Benchmarking isn’t a one-and-done deal—it must be done consistently in order to review current processes, adjust goals and objectives, and make improvements to gain a competitive edge.
For more information on how benchmarking and advisory services can help you propel your clients to success, become a Rootworks member today!
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