This week we’re profiling another of our inspirational coaches. Kevin D’Ambros-Smith is a business coach with The Icehouse and CEO of Motherbase Consulting Group. He’s also an entrepreneur and a specialist at driving growth and profit in businesses. Here, he explains the merits of benchmarking.
Whichever industry you compete in, the fundamentals of business are the same. You need to sell something people want to buy, attract and retain customers, generate a positive cash flow and make long-term profits.
Benchmarking can play a part in shaping those fundamentals – comparing your products with those of your competitors, understanding the difference, and then using that information to deliver best practice to get a competitive advantage.
| Benchmarking sporting glory
For their 2000 America’s Cup campaign, Team New Zealand had limited resources compared to many of their well-financed international competitors.
To make sure every resource was utilised as efficiently as possible, they created the benchmark; ‘Will it make the boat go faster?’. Once this idea was established, all strategic decisions and expenditure were simply evaluated against this one criteria.
Did the office team need a coffee machine? Maybe – but would it make the boat go faster? Should the team put resources into sail development? Yes – because it fitted the benchmark.
The benchmark enabled Team New Zealand to stay focused across all roles in the organisation and ultimately helped ensure they were successful in achieving their goal of winning the America’s Cup; even against much larger and better-financed teams. It’s a concept all businesses can benefit from.
| Making benchmarking innovative
Benchmarking, and competitive benchmarking, which is most common in retail, is most effective when you use it to refine and improve not just one, but every element of your business to create the gold-standard or best-in-class product or service.
As the founder and former CEO of Nappies Direct, we were at a disadvantage with the likes of Countdown, New World and Pak’nSave when it came to price.
The benchmark goal was to provide a better service to create more loyal customers – customers who would stay with us regardless of any price differential. We focused on customer loyalty and service as a way to gain an edge – loyal customers are more concerned about quality and service, stay with a particular brand for longer, and are more likely to recommend your business by word of mouth.
It worked. Establishing a benchmark enabled us to set a firm strategic direction and embed it into the DNA of our business. All decisions we made were based and tested on this singular goal, thus ensuring the future path and success of our business over the long-term.
| What’s your company’s benchmark?
These questions will help you identify and formulate your company benchmark.
What is your company’s reason for being?
Who is your target market and what problem or pain-point are you solving for them?
What does success look like?
For more advice on how to drive growth, visit: Motherbase Consultancy Group.
The Icehouse’s Business Coaching service helps you refine your strategy, keep you on track and achieve your business goals.
For more business ownership and leadership advice check out more of our blogs.