3 Reasons to Be Wary of Benchmarking

When it comes to customer satisfaction, analyzing trends is important. It’s not what your score is that matters. What matters is how that score changes over time, and what affect that has on purchasing.

But that is not the only thing that matters with regard to satisfaction. It is also important that your customer satisfaction scores compare well to that of your competitors. That is the goal of benchmarking.

Benchmarking refers to the act of seeing where your scores “Stand” when compared to businesses in the industry. Your goal is to be the best, because as the best you are more likely to attract new customers from your competitors and experience fewer losses. Many companies use benchmarking as a way to analyze their own business’s success.

But benchmarking is also a tool with several flaws – at least in terms of how you interpret the result. While it is an interesting tool, and certainly helpful for determining your own place in the industry, it should not necessarily be used as a method of analysis.

Similar is Not the Same As Identical First and foremost, it is important to remember that similar industries and similar businesses and products are not always identical industries and identical businesses and products. There are other factors that influence results. Compare two different cell phones – the Blackberry and the iPhone.

Both are smart phones, both are cell phones, but both serve a very different customer base. Blackberries are better for business, iPhones for play. So even if the iPhone satisfaction scores are lower than the Blackberry, they may still attract a lot of business and lose less depending on the market that needs them, among other factors.

Trends Can Affect Companies Habituation is a problem when it comes to tracking trends in some satisfaction surveys. Customers may be wowed by a new product or feature, but once that wow factor has worn off, it’s possible that they will revert to their old opinions about the company or product. If you introduce several profoundly great features that set you apart from the competition, you’ll likely get an increase in satisfaction.

But then if you release one small bad feature or something negative happens, your scores could potentially drop a great deal – you still have these great features, better than the competitors, but you won’t compare as favorably to benchmarks because customers expect more from you. Questions Differ You have different products, different features, and different types of service. How customers answer questions about your company are not going to be the same just because you are in different industries.

This means that the questions that were used to create the benchmarking data may easily not be relevant for your company.

The above list represents just a few of the reasons to be wary of benchmarking for analysis. Benchmarking is interesting, and it can be useful, but it shouldn’t be something you use to make decisions about the abilities of your company.