In my work over the past ten years, I’ve been fortunate enough to work with companies that employ three people, and those that employ thousands.
I’ve helped companies that have yet to hit the seven-figure mark in a year and companies who do over $250M/month in revenue. I’ve helped restaurants, hotels, online retailers, real estate developers, tech companies, and loads of B2B manufacturers to find better ways to serve their clients and customers by becoming more Evergreen.
In 95% of these companies, I noticed that they weren’t using (and in some cases had never considered using) the most important, impactful, and cost-effective intervention to optimize their marketing, sales, and operations.
Not using this intervention is almost certainly costing you in terms of both customers and net profit.
The intervention I’m talking about is Internal Benchmarking.
Eagle-eyed readers may remember that I railed against industry-wide benchmarking a few months back, and it’s true – Benchmarking against other industries is a silly and an often misguided way of gauging yourself and your efforts.
But internal benchmarking is a whole other beast. It is the single best approach that I’ve ever seen to help everybody in your company get better and better.
If you have more than five people in your company who are doing sales or even talking to your customers/clients for that matter, then you need to be using internal benchmarks to find your brightest stars, and to help everybody in your company start to shine that brightly.
Internal benchmarking is essentially measuring you against yourself. In every company, there are people who are more successful than average, and those who are less so.
By identifying the differences in those who are more successful, you can develop more targeted training, set goals that everybody in the company can believe in (“Well, it’s obviously not going to be easy, but Joan has been hitting these numbers every week for the past 6 months, so we know it’s possible!”), and quickly find the distinctions that are responsible for success and those which are peculiar to your high performers (but have no impact on success.)
Internal benchmarking is simple, but it’s definitely not easy.
There are a lot of ways to do it wrong, and almost all of them involve using the benchmark numbers as a club, rather than as a goal.
When you see that three salespeople are doing more in sales than the next 17, the easy (and wrong) answer is to increase the quota on the 17 and tell them that if they don’t hit their numbers, they’re fired (but this is almost exactly how it’s done.)
The hard (but immensely more profitable and practical) thing to do is to investigate the difference in approach, habit, and execution of all of the salespeople, and find the things that the 3 superstars are doing that the other 17 aren’t.
The even harder thing to do is to implement training for the other 17 to help them develop the skills that your superstars have, and to utilize those skills day in and day out to improve their results.
I once worked with a restaurant group who found that a small group of their servers averaged tips of 22-24%, whereas the restaurant average was 14%.
This difference may seem small, but it has a huge impact on the customer experience, customer loyalty, total lifetime value of the customer, and propensity to recommend the restaurant to others (not to mention the dollars generated by the servers, and hence their happiness & satisfaction with the job).
We were able to find three specific things that the superstar servers all did that the rest did not, and by training the rest of the serving staff across all of the locations to do these three things, they saw their average tips move from 14% to 20%. This is a substantial increase in happy diners and ended up generating a very nice boost to the restaurant’s net profit over the following years.
If you’re not actively using internal benchmarking right now, then we should talk immediately – IT IS THAT IMPORTANT.
If you are, then I want to hear your experiences with it!
Today’s Key Question: What successes and challenges have you had in implementing your internal benchmarking program?