We all joke about “keeping up with the Joneses”. This timeless expression is synonymous with the human tendency to compare ourselves to others. Following the rise in suburbia, neighbors continue to “one-up” each other as a way to establish socioeconomic dominance. This neighborly competition plays out in categories like who has the best kept lawn, the newest car, and whose kid won first place in the spelling bee.
Just like we compare ourselves to our neighbors, businesses benchmark to see how they stack against the competition. In most cases a benchmark is an industry average, peer group or an index (like the DJI or NYSE). Displaying these benchmarks clearly helps your business identify areas for improvement and goal setting.
For example, how does Volkswagen stock compare to the BMW and DJI over the last 3 months?
Motivate your audience
More importantly, benchmarking is used to inspire action. The social pressure to be better (much like the Joneses) catalyzes when you see how you stack against your peers. When your company can see where you are in the standings, everyone works harder to get that one-up.
Are you using benchmarks effectively in your business? Here are some must-do’s to get you started.
Item #1: Start with the right metrics
Choose a relevant metric and the right benchmark. Users want benchmarks that are relevant to them. They want to compare themselves to the most similar set. Provide flexibility to define relevant comparisons for the user.
Depending on the action you want to inspire or the goals to set, select the metric that aligns. Then decide whether to compare to an industry, a region or a peer group.
Item #2: Make it easy to find yourself and your peers
When designing the display, think about making it as easy as possible for the audience. Will they be able to see within seconds where they stand? Users love benchmarks because it puts their performance in context. Can they easily identify where their peers are? Don’t make them work to figure it out, or the benchmark becomes ineffective even if the data is accurate.
Item #3: Clearly label your benchmarks
Benchmarks are often not well defined. It can refer to the average of all entities in the data. It can refer to top performers only. Label clearly. If you aren’t sure about your labels, ask a group of users to interpret what they see. You might be surprised at how different all the answers are.
Item #4: Include a large enough benchmark group
Sometimes you need to be careful about cutting your comparison set too thin. Now’s your chance to share your BIG Data and everything you know about the industry and customers. It’s not enough to say you're 5% below the national average, but to show your audience that it’s based on 10 years worth of data, or millions of survey responses, etc.. Show the depth of your data!
Need more help? Check out the benchmarking functionality within Juicebox where there are several visualizations focused on benchmarking and comparisons.
Click here to schedule a 30 minute demonstration.
Happy benchmarking!