What is Benchmarking in Customers Services
What is Benchmarking in Customers Services: Benchmarking is the process of comparing your own organization or operations against other organizations in your industry or in the broader marketplace.
Benchmarking can be applied against any product, process, function or approach in business. Common focal points for benchmarking initiatives include: measures of time, quality, cost and effectiveness (or satisfaction).
The intent of benchmarking is to compare your own operations versus competitors and to generate ideas for improving processes, approaches and technologies to reduce costs, increase profits and strengthen customer loyalty and satisfaction.
Benchmarking is an important component of continuous improvement initiatives.
A firm interested in improving their customer service practices might compare their own processes and metrics against those of their most successful competitor. If they identify negative discrepancies or differences in measures, they may embark upon process improvement to strengthen their performance. The firm will observe and measure the competitor’s operations, and in some industries, they will send in employees as customers to gain direct experience.
A quick service restaurant chain dependent upon speedy, accurate service in the drive-thru to maximize efficiency, cut costs and increase profits will study the drive-thru practices of key competitors. Every second gained without sacrificing customer quality allows the firm to increase profits. Over the years, competitors have consistently innovated in their drive-thru operations with configuration, number of windows, menu and speaker boards and ordering approaches in an attempt to improve in this area.
They are constantly watching and benchmarking against each other.
Some organizations focus their benchmarking activities exclusively on key competitors. Others look beyond their own industry to identify alternative approaches to improving their businesses. For example, Southwest Airlines famously analyzed the processes, approaches and speed of automobile racing pit crews to gain ideas for improving their airplane turn-around time at the gate.
The outcome of this benchmarking study is reported to have helped Southwest reconfigure their gate maintenance, cleaning and customer loading operations, and to have saved the firm millions of dollars per year.
Many industries or industry or consumer related organizations publish comparative data invaluable to the benchmarking process. For example, consumers interested in the quality of new or used cars can look to the organization that publishes Consumer Reports for their detailed testing and reporting results on new and used cars.
Why Should Your Firm Benchmark?
The case for benchmarking suggests that evaluating your own business performance, including processes, speed, timing, cost and quality, creates a myopic or insular view without an external comparison. The firm preoccupied on itself easily loses track of competitor innovations and changing demands of customers.
What is Benchmarking in Customers Services
Some organizations benchmark as a means of both improving discrete areas of their business and monitoring competitor’s shifting strategies and approaches.
Regardless of the motivation, cultivating an external view of your industry and competitors is a valuable part of managing in this world of change.
Defining a Benchmarking Initiative
Because any process, product, function in a business is eligible for benchmarking, methodologies vary. Typically, a process involves:
- Defining the subject of the benchmarking study.
- Define the process or attribute to be studied in detail.
- Select and define the measures.
- Select the comparison set.
- Collect data on both the benchmarking subject and comparison set.
- Assess the data and identify differences and gaps.
- Analyze the root causes of the differences or gaps.
- Define an improvement initiative complete with goals.
- Communicate the goals.
- Implement the improvement initiative and measure results.
- Report on the results, identify improvements and repeat.
The Bottom Line
Benchmarking is a potentially powerful tool to promote continuous improvement in your organization. As discussed, relying on internal-only measures breeds a myopic perspective. High performing organisations strive to identify processes, functions or offerings important to their business and evaluate their efficiency and effectiveness versus leading competitors or leading innovators. Care should be taken to define benchmarking initiatives carefully and scientifically, or, the results can be misleading.