Many businesses already know how to do benchmarking, but sometimes lack the required data to run accurate benchmarks...
Generating Revenue through Benchmarking
Does your industry or business association have chapters? If so how many does it have? According to a 2016 benchmarking report drafted by Mariner Management, the average figure is 84 chapters. If your association has 84 chapters or even 80 chapters for that matter, it means you wield significant influence in the industry. Also, these chapters make a huge impact on the association’s performance.
Since around 65% of the associations don’t have any full-time staff devoted to the management of the chapter, it can make increasing a chapter’s performance, building good relations and even undertaking profitable tasks challenging. That said there is a way to overcome the challenge without having to put significantly higher stress on the staff of each chapter. One way to do that is to monetize a lot of what your chapters may otherwise be doing for free like benchmarking.
How to Generate Revenue with Benchmarking?
Now for starters, there are many ways in which the power of running benchmarks can be leveraged to make an association profitable. We wouldn’t go into each chapter’s performance or input for a benchmark. Though we will assume that if each chapter represents a city, that particular chapter is responsible for benchmarking member businesses in their city.
Generally benchmarking can be monetized by asking members to pay a fee. Explain to them that the fee covers things like extra staff, data collection, the hiring of an external consultant. Obviously, it will also include making some extra money for the association. Though if your association has been offering benchmarking for free this may not go down well with members. So, instead of monetizing the benchmarks themselves it is possible to monetize the post benchmarking results.
Note: Not many associations in most industries monetize benchmarking. Most do it for free, though they may not always add value.
What are Post Benchmarking Results?
So, you’ve run a benchmark, the results are out and have been distributed to each member business. But how do the businesses make sense of all the numbers? Many small businesses may not have the means to formulate a strategy based on the numbers. They could possibly be able to tell where they are in terms of rankings compared to the competition but how exactly that reflects on their future is hard for them to understand.
An association with the help of an expert can help businesses use the benchmarking figures to come up with a business strategy. For instance, if the company has a low employee retention rate, the benchmarking data may hold the key to why that’s the case. One reason could be that the competition is offering a higher salary. The other reason could be that the competition has a much better work environment. The association’s experts can help to draw similar conclusions which helps a business make decisions and for that the association can charge.
Another way to use Post Benchmarking Results is to have additional in-depth reports available for those who want to pay for it. Each participant of the free benchmark get a free overall benchmark report as thanks for their participation. And if they are interested to do more with the benchmark itself they can buy additional reports.
Get a Sponsor Onboard
It isn’t an alien concept, i.e. bringing in a sponsor who foots the bill for the benchmarking project. The sponsor can be from within the industry or from a related industry. The goal, however, will be to get either one or more than one sponsor in exchange for either publishing their advertising in some way or doing something else in return. Generally, though if the sponsor is from a related industry or one that has direct links with businesses your sector, they will propose some sort of branding or advertising exchange for the money.
For instance, the association for poultry processing plants may find a sponsor in the financial industry. It can be an insurance company or even a tax consultant, even a tax attorney for that matter. Obviously, poultry processing plants are always in the market for workers’ insurance and tax attorneys. That way the benchmarks are run for free to the delight of the member businesses and they are exposed to possibly a good insurance company and tax attorney.
The only drawback to this idea is that most associations unless they are really influential, will require actively seeking out sponsors. The association’s marketing executives will need to know who to approach and how much money is the goal. Also, the association needs to be open to striking a deal which may not necessarily be blasting advertising. But also, one which does not undermine the trustworthiness of the association.
At the end of the day, you are making all this effort to get results. The benchmarking data needs to make sense and deliver certainty to member businesses. So, before you even start seeking sponsorship or some other means of financing, it is important to know if there is a sizable enough chunk of the market you can tap. If your membership is made up of just 10% of the industry the benchmarking results aren’t going to be as good compared to if they made up 50% or more. That means generating revenue isn’t going to be possible for a startup or newbie association, not until they grow.
Note: benchmarking is also possible with small membership coverage. Each participating member should be aware about the size of the benchmark population. And can decide if participating is worthwhile for them. A smaller benchmark cannot say anything about the industry as a whole, but have a large impact on those who participate.
Many small and medium-size businesses may require that someone helps them with making the right decisions. Associations are in a unique position to offer them insight which can be useful. So much so that the insight can be monetized in the form of a consultancy fee. Add benchmarking results into the mix, and you can offer a so-called big picture strategy service. The goal of such a service will be to help businesses look at themselves from the perspective of the industry and their target market.
Benchmarks are a significant start for any association who wants to help member businesses. Though it can’t be done for free as it takes up time which costs manpower and consequently money. That said nothing is stopping associations from adding value at a cost. Like an independent industry analysis, a survey, or new year strategy. The thing associations need to keep in mind is that if members think they need it, it will have value!
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