Wednesday, May 1, 2013

BENCHMARKING

We hear a lot today about benchmarking. I can remember in the past going to conferences and having people ask me who I was benchmarking with and what we were benchmarking. The questions have subsided a bit but it is still a popular question.

Peer groups have helped a great deal in this area. I know I belonged to a peer group for over 20 years and it was a tremendous help in the benchmarking arena in that I had 5 other companies I could compare with on an ongoing basis. It is gratifying to see several other peer groups sprout up and I hope they are getting the benefit from them that I did. By the way, we should have a major announcement in the very near future regarding peer groups that will positively impact many companies. I will keep you posted.

Back to benchmarking. While comparing your numbers and processes against other companies in the industry, I think it is of vital importance that you benchmark against one major company---YOURS. Just think of what you can learn and improve on just by looking at some of the following items in your own organization,

SALES

---How are the sales this year compared to the same time last year?
---Why are sales up or down?
---What types of accounts did we lose and why?
---What types of accounts did we gain and why?
---How do the margins on various catergories of accounts compare to the margins at the same time last year?
---How has the size of our average sale changed since this time last year?
---How has our close ratio changed from last year at this time?
---How many appointments does it take to close a sales this year as opposed to this time last year?
---If we are telemarketing, how many calls does it take this year to get an appointment vs. last year at this time?
---Are we more successful in selling certain types of accounts this year vs. last year? If so why?
----Are there some different market segments this year we should be pursuing vs. last year?
---And the list goes on.

 OPERATIONS
 
---How does labor compare this year to last?
---What are your top 10 profit accounts and how do they compare to last year?
---What are your 10 worst profit accounts and why? Do you need to decide on keeping them or canceling them?
---If your worst 10 accounts profit wise last year are still your 10 worst this year, why are you still doing them?
---What are your best supervisor territories and why?
---Who are your best supervisors and worst and why?
---What additional training do you need to do since last year?
---How are supplies running vs. last year?
---Are there new products that can reduce labor and supply cost?
---Are you scheduling all employees for focused retraining on new products and procedures?
---And the list goes on.

These are just some of the areas you can benchmark against yourself. There are more and as you delve into the ones listed above I am sure you will find more to analyze. It is also important to remember that it, more often than not, is easier and much less expensive to tweek existing accounts to produce more profit than it is to pursue new accounts. Now having said that, if you are not pursuing new accounts you will eventually find yourself out of business so it takes a balance of both to make for a successful business.

As I post this article we are just completing the first 4 months of the 2013 calendar year. This would be an ideal time to compare this year vs. last year, either the first 3 months or the first 4--take your pick, but DO IT. You can learn an enormous amount just by looking at and analyzing the numbers in your own company.

I worked hard at comparisons within my own organization, looking at budget comparisons, market changes, branch profitability changes etc. and it made us a much better company. If you will dedicate the time, your company will be the better for it.

You can change what happens in your own company. That is why I so strongly believe in benchmarking your own numbers etc. While it is nice to see what other companies are doing, you have to execute the  changes needed, the other companies won't do it for you.

I encourage you to take the time NOW to analyze what is really happening in your company, make the changes necessary, and reap the multitude of rewards you can gain from your efforts.

As always, we are interested in hearing your comments on what we write. Let us know through our web site at www.consultantsincleaning.com and listen to us each week at www.tripodcast.com.

Till next time.

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