Tonnis van Dam

What should you Benchmark

It is a question that many associations need to ask themselves. In niche industries where there is just a single product or only one service being offered the answer is easier but not necessarily easy. Associations need to find an aspect of the industry to benchmark that matters to every member. Finding what to benchmark will require that the association put together a team to figure out all the relevant and valuable stuff to benchmark. More importantly, it is necessary to know what shouldn’t be included as much as it is essential to understand what should be benchmarked.

One way to find out what matters to the industry is to ask members. Ask your members what aspects of their business would benefit from benchmarking or comparing data with others. It can be a rather difficult question to ask because for businesses everything matters. Though try to get companies to list their top three picks.

Once that data is received, you can plot a graph to find out which items are of the most concern to businesses in the industry. The ones that get the most mentions are obviously an excellent place to start. Interestingly, most members will only be able to answer these questions with some degree of accuracy if they are aware of how benchmarking works.

TIP: Be aware not to please all members simultaneously. If you have different member groups with different interests, then it is better to create separate benchmarking surveys for each of these groups.

Ask Quantitative and Qualitative Questions

Associations need to ask members both quantitative and qualitative questions which help give insight into what needs to be compared and reported. Quantitative questions should be based on data points as well as corresponding KPIs (key performance indicators). All the questions you ask need to be relevant to the members being questioned.

Other questions you would want to ask should be about the content of a benchmark. If there is a benchmark what would they like to see? If anything, it will help you get insight into what members think about industry benchmarking and how relevant they think it is to them.

Note: Questions matter but don’t ask too many questions. The goal should be to get the most information out using the fewest questions. Associations should never ask more than what is needed because it takes away valuable time from businesses. Also, it discourages businesses from answering those questions with careful thought.

Collecting and Assembling Information

Once all the content information has been received, the next step is to order them correctly. You will want to put together all the metrics which are equally liked. Take for instance if your members have said that they would like to benchmark the revenue generated per employee, revenue metrics and productivity metrics. These are all easily grouped as productivity metrics. That means your industry is interested in how much an employee can produce for the company. These metrics will also include revenue; hours worked, average tariff, etc. for every employee. Usually, it will be businesses in the manufacturing industry who will be interested in benchmarking productivity.

Tip: Collecting information should be based on how the industry works. If the majority of your member businesses aren’t familiar with social media then running a data collection campaign on the associations' Facebook page, for instance, isn’t going to yield much in the way of results. So, you need to communicate with members in a way that they feel is comfortable.

The content should also be topped off with an expert view of all the member-driven content. Your industry’s market expert or the business advisor arguably knows much more about members and the market what ails them and what makes them happy. All of that can help an association add the required metrics to the final benchmarks. Not to mention the fact that leading and lagging indicators will also help to offer a more rounded view of performance.

The metrics from the key performance indicators will be used to identify the data points needed. Take for instance that revenue per employee will require an average number of employees across the entire industry working full time, and income. That said it is imperative that regardless of what data points you use it should be clearly defined.

Poll on What You are Benchmarking

Once what needs to be benchmarked has been finalized by an association, the next step is to run a final poll. Many associations may see this as being an unnecessary step especially since it was the members who initially outlined what they wanted to see benchmarked. However, asking everyone one final time will help give businesses a chance who have not participated in voting in favour of what they want to see. Sometimes associations may see a boost in votes for what was otherwise not seen as being relevant to benchmark by businesses.

It goes without saying that there is a difference between running a survey which requires that members think and enter data, compared to running a poll where participants click a button or a box to vote. The latter is easier to do, requires less time to think than the former. So, more members will participate. Apparently, the point(s) that gets the most votes should be set up to benchmarked.

What Shouldn’t be Benchmarked?

The obvious answer to this is anything that the members didn’t mention. Though you also shouldn’t benchmark otherwise arbitrary points. For instance, in the retail industry, it can be near impossible to benchmark the number of walk-in customers. Most retailers have no idea how many people walk into their doors. Though they do know how many people purchased. So, instead of benchmarking foot traffic (so to speak) it would be a better idea to benchmark the number of customers on average.

Tip: Never benchmark arbitrary industry values, stats, and comments. You never want to benchmark something that can’t be clearly measured with proof. Always benchmark solid stats.

Benchmarks should also be set up in a way that measures performance within periods most common to all member businesses. For instance, measuring five years of growth in an industry where most businesses are three years old does not make sense. However, even if the industry has been around for decades, but your association’s members are relatively new, going that far back isn’t relevant. It is only applicable if the majority of your member businesses are that old.

What Can Go Wrong?

Finally, it is essential to address the proverbial elephant in the room, i.e. what can go wrong will go wrong. As professionals who run benchmarks for a living and derive workable models, we have seen a lot go wrong. Even the most well-planned benchmarks can end up with mixed and often downright underwhelming results, leading to a lukewarm response from member businesses.

One of the most significant problems with associations running benchmarks is that they set very high expectations when in fact the data points they benchmark will not yield decisive results.

Note: Speaking of things going wrong, a prevalent error is not asking businesses the right questions. If you want to find the best data points you need to ask businesses the right questions. So, instead of asking a company what is most important to them ask them if they want to increase sales or revenue? Sure they are related, but there is a difference between favouring revenue over sales and vice versa.

For instance, the majority of businesses will vote for an association to benchmark sales figures from the past three years. The sales figures are benchmarked, and the results of which show a 5% increase across the industry. Obviously, the results aren’t promising, and it shows that the industry hasn’t done much to grow. Also, most businesses can’t do much with this information except for knowing that they are doing something wrong. Associations who have created an assumption that the figures will help companies to figure out what is wrong with their business model and improve it with benchmarking will see many members criticize the association.  

Even if members are educated about benchmarking its essential for associations to create realistic expectations. That’s something we feel strongly about. Also, if an association promises results, then they should decide if the data points being benchmarked can be used to attain those results. That will in most cases require that the association brings an industry expert and a benchmarking consultant onboard. If anything it will help to clarify the association’s position and what benchmarks can help businesses achieve.


Benchmarking is now one of the best ways to determine if an industry or a business is heading in the right direction. Though associations need to be very careful about what they benchmark and the expectations they create in relation to that. The better they understand things, the more improved the final results will be leading to member satisfaction.

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