What is Benchmarking Analysis and How Can It Benefit Your Business

What is Benchmarking Analysis and How Can It Benefit Your Business

Benchmarking analysis is a rather large topic of conversation in the business world and for good reason. After all, it is one of the main processes used to measure the performance of a business’s products and/or services against those that are seen as the best in the industry.

For example, a new startup software company might use benchmarking to compare themselves to Apple or Microsoft.

The goal is to identify areas of improvement by studying what makes leaders superior performers, breaking it down into a list of processes that separate leaders from everyone else and then comparing against those. My point is that benchmarking can lead to huge improvements in small businesses.

For example, a small business owner might notice that its industry leader has outstanding customer service programs in place, so they will invest in better customer relationship management systems.

A Step-by-Step Look at Benchmarking

There are two primary types of benchmarking – continuous and dramatic.

Continuous benchmarking looks for small, incremental changes that can be done over time to create steady, attainable progress. Dramatic benchmarking is – well – more dramatic! It creates large changes and often reengineering is entire business processes.

  1. A business chooses a product or service that it wants to benchmark.
  2. Makes a list of the top companies within their industry.
  3. Gathers all of the information possible on their own internal performance.
  4. Compare that data with the same data from top companies in their industry in order to identify areas where they are significantly less efficient.
  5. Come up with new policies or changes that improve those areas.

Top Benefits of Benchmarking Analysis

How to Write a Successful Business Plan

What makes benchmarking so valuable is that it highlights areas that will make the most difference, giving you the insight to make those changes. Here are some of the top benefits that businesses experience when using benchmarking analysis.

1. Reduced Costs

Benchmarking can be used to lower costs.

For example, let’s assume that your business uses benchmarking to discover that one of your top competitors uses automation to make its business processes more efficient. You could then dig deeper to learn what automation systems those companies are using and then looking installing them within your company.

Most of the time, you will find that automation systems are installed by a third-party company, so you could contact them to see exactly what it would take to install them yourself. The end result would be lower costs.

2. Improved Quality of Products or Services

Are your competitor’s products and services higher quality than yours? Benchmarking will help you find ways to improve your own business.

Successful businesses have spent a lot of time developing their products and services. That’s why they’re the best. Your business can learn from that experience by comparing the two.

What is being done differently? The only way you can make this type of comparison is through benchmarking.

3. Sales and Profit Boost

Benchmarking analysis provides you with extraordinary opportunities to improve the overall operation of your business, which will naturally lead to boosts in both sales and profits. Your customers are going to notice changes made in your business so when you boost efficiency, you’re going to improve their experience. Benchmarking allows you to compare brochures, sales processes, and marketing to that of large businesses. Businesses become more efficient through benchmarking, so they drastically lower their expenses.

The bottom line is that small business owners can learn a lot from their big brothers. Sometimes it’s even possible to rework the internal structure of the business to operate more efficiently. Small changes can spark large improvements. Benchmarking is a powerful tool so be sure that you don’t miss out.  

About The Author

Jacob Haney is a content marketer presently working with Research Optimus, a business research outsourcing company. A writer by day and a reader by night, he is loathed to discuss himself in the third person but can be persuaded to do so from time to time.

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How This Family Guy Makes $10,000/Month Online Teaching Others How to Make, Save and Invest Money

How This Family Guy Makes $10,000/Month Online Teaching Others How to Make, Save and Invest Money - Interview with R.J. Weiss from TheWaystoWealth.com

This is an interview-style post with R.J. Weiss from The Ways to Wealth.

Hey R.J. What’s your background and what do you do?

I blog about all things personal finance at The Ways to Wealth.

Before I went full-time into blogging, I spent ten years in the financial services industry. Specifically, helping families buy the right type of life insurance.

During my time with a full-time job, I’ve always had different side hustles going on. From freelance writing, Amazon FBA, conversion rate optimization, to website design — there were many projects I pursued outside of work.

How did you start your career in finance?

I got started in finance straight out of college working for my the family insurance business. As I love the financial planning side of things, I choose to specialize in life insurance planning. This led me down the path to obtaining the CFP® Certification.

What made you start blogging?

The Ways to Wealth, which I started in 2016, has been my 5th blog.

The others mostly fizzled out most due to a lack of interest. But, in 2009 I started a personal finance blog called GenYWealth.com (no longer around) that had some success.

The idea GenYwealth.com was to write about what I was learning about studying to take the CFP®. The blog was, by all means, a success. I was able to gain valuable knowledge, pass the CFP® exam, earn some extra money and build up a good community.

I then took this knowledge and started a business blog, which allowed the insurance agency I was working for to generate leads.

I started The Ways to Wealth because my passion is personal finance–from investing to travel hacking, I love the challenge of optimizing my finances.

How was The Ways to Wealth born?

I didn’t have much of a plan for starting The Ways to Wealth when I purchased the domain name.

I was actually thinking it would be a niche site, which was inspired by Pat Flynn’s niche site duel. Then, I came across the income reports of Michelle Schroeder-Gardner and wisely changed direction to a more traditional blog.

This change came about 6-months after starting to blog.  I did a timeline of the site in one of my income reports.

What worked best when trying to grow the site?

I had a decent knowledge of SEO. So at first, I started growing the site with email outreach. One of the first posts I had about best investing books of all time, had about 15 links to it.

This was nice to start with but was quite slow to build up, as it can take a while to earn Google’s trust.

The big turning point came when I started to understand Pinterest. I spent a few frustrating weeks on the platform, then it finally started paying dividends.

I went from about 100 sessions a day to 1,000, which was huge for me at the time.

How did you get to 3 million monthly viewers on Pinterest?

the ways to wealth pinterest 3 million monthly views

I lay out my Pinterest strategy here. But at the core the idea is to:

1) Write high-quality content that Pinners want to click through, read, and share.

2) Pin to my own and high-quality group boards, with a keyword-rich description.

3) Continue to Pin my best pins across my own boards/group boards, ruthlessly eliminating Pins that don’t perform well.

One thing to keep in mind is impressions don’t mean much on Pinterest. What counts are clicks to your website. So, you want to design not for impressions but clicks.

What aspects of the online business are you outsourcing or automating and how?

The first thing I outsourced was Pinterest design. I’ll design about 30-40 pins a month, so this was big time saver for me.

Of course, it took some work to get going. At first, I hired 5 or so people on Fiverr. I found one decent designer but the work quality deteriorated over time.

I then went to Upwork and posted a job for a  graphic designer. I found a great team down in Argentina, who I’m very happy with.

I’m currently experimenting with working with a ghostwriter. A few of my latest posts have been transcribed from my recording, with the ghostwriter making sense of it all.

I can compile about 3 posts in 90 minutes, then take another 90 or so minutes to prepare them. Saving me around 3-4 hours per post this way.

What’s your main income stream and why do you think it works for you?

My main source of income for the blog is affiliate revenue. It works because the partners I do have are high-quality businesses, who deliver value and solve real problems. This makes it easy to naturally link to such a partner.

When did you start making more than $10K/month and what was the turning point?

My first month over $10K was in January of 2018. In December of 2017, income was around $3,000 and in July of 2017 around $500. So, it was definitely a jump.

What happened then in January?

First, personal finance is at its peak interest in January.

Second, I had multiple Pins go viral.

Third, in November I started driving traffic via Facebook to the site. So, in January I could take campaigns I’d been fine-tuning for a few weeks and scale them.

How do you balance work and family life?

I have a routine I stick to Monday through Friday.

When inside of my designated working hours, I work. When outside of these hours, I’m not.

This is a lot easier said than done. But the thing important for me is not to take work everywhere I go. This means I don’t have any apps on my phone that are work-related (email, analytics, etc..)

What are you 3 best finance tips for newbies?

  • Focus on your savings rate. How much you save is the most important decision you’ll make.
  • Small incremental improvements add up over time. My favorite example is increasing your savings rate 1% every quarter, means you’ll be saving 20% of your income in just 5 years.
  • Study happiness. Become a student on how to increase your level of happiness. The natural result is you’ll want less overtime, making the game of personal finance a lot easier to win.

What books, blogs or podcasts help you stay motivated along the way of growing an online business?

I read a fair amount to keep fresh ideas in my head.

My favorite podcast is The Tim Ferriss Show.

Two blogs I enjoy reading are:

Farnam Street
Barking up the Wrong Tree

And as far as books. I try to read one a week. A few books I would recommend to online entrepreneurs would be:

Deep Work by Cal Newport
The Compound Effect by Darren Hardy
The Four Hour Work Week by Tim Ferriss

Pin this post if you enjoyed the interview.

Check out my interview with R.J. from TheWaystoWealth to see how he entered the finance niche, started making money blogging, began bringing traffic from Pinterest and monetizing it with affiliate marketing, and is now making $10,000/month from his online business. #blogger #interview #blogtraffic #incomeideas #income