Benchmarking establishes a reference point so you can gauge the success or failure of marketing and service strategies even when there isn’t an obvious cause and effect. We naturally want to know how our results compare to our competition and try to benchmark against them. It’s impossible to create realistic and accurate comparisons to other companies. Looking at the competition for insight into their strategy is a good thing. Investing resources in specific analytical comparison is wasteful and counter-productive. Use those resources to create solid internal benchmarks instead.

The first step in every plan should be to get all of the participants on the same page. This eliminates (or at least reduces) miscommunication and confusion. Sometimes we forget this in our haste to share information or get started. I tend to forget this step when writing about benchmarking and presume that everyone sees it the same way. When I wrote “Why Benchmarking against Competitors doesn’t Work,” I left the interpretation of benchmarking to the reader. I’m taking a step backwards and defining it so we start out on the same page.

Benchmarking began as a surveyors’ term. Permanent marks were placed as a reference for an exact elevation. All reference points after that were in relation to the original benchmark. It is a specific and exact science. Over time, the term was borrowed and used to denote a standard measurement that can be used for comparison. When I say “benchmark” or “benchmarking”, I am always referring to a metric that can be accurately and repeatedly measured. It is an exact science in my engineering mind.

Using benchmarks in marketing and service help measure the unknown. It is especially important now that we have the social channel where identifying cause and effect seems close to impossible. Establishing internal benchmarks is not for the weak of heart because capturing the information needed and converting it into usable information is hard work and requires a long-term commitment. The benefits far outweigh the challenges making it a worthwhile investment.

Direct marketers use benchmarks on a regular basis. They usually call them “controls” and measure new campaigns against the proven performer. Internal benchmarks have to go deeper than a promotional campaign control to maximize your return on investment. Service levels, operational costs, and profitability must be added to response rates, average orders, customer acquisition and other marketing metrics. This gives you a reference point that encompasses the whole organization instead of one area. When a company has comprehensive benchmarks in place, cause and effect is easier to see.

For example, if a social media campaign goes viral at the same time sales increase, does that mean that it is driving revenue? Maybe. Maybe not. If there was also an improvement in service levels at the same time, the additional sales could be generated by improved customer experiences. Without benchmarks, the increase would most likely (and possibly erroneously) be attributed solely to the social activity.

Benchmarking within an organization provides additional insight into contributing factors for sales and profitability. The more you know, the better you can plan and grow your business.

One statement in “The Numbers that Really Matter to Your Business” got a lot of attention because people didn’t agree with it. I wrote, “There is simply no way to compare metrics from different companies and deliver realistic results.” Responses varied from simply stating that the reader disagreed to explanations as to why I don’t understand how things work.

There are several reasons why benchmarking against competitors doesn’t work and won’t deliver realistic results. Before diving in, there is one qualification. My statement does not include manufacturing and bulk warehousing. Companies that produce the same products with the same equipment and automation can compare production metrics. Comparisons are helpful even when the equipment and automation varies because it allows the less automated company see the potential gains if they upgrade. Bulk warehousing is similar to manufacturing. Product moved by pallet load is similar no matter what items are being moved. Weight and distance differentials can be scaled.

Marketing and service metrics are different. There are too many variances to provide a realistic comparison. This includes:

Corporate Culture – Every business is different because companies are comprised of people. The responses to marketing and service vary by individual preferences.

Customers – All customers are not created equal. Ask anyone who has bought a business to find that half of the people in the customer database are hit & runners. Comparing response rates between companies is an exercise in futility.

Service – Quality of service is directly related to customer expectations. People expect different things from different companies. Expectations can be managed but they can’t be controlled.

Costs – Corporate expenses are dependent on so many factors it is impossible for an outsider to verify accuracy. Service levels, pay scales, bonuses, productivity, and perks are a few of the items that can vary. It’s hard enough defining the costs of doing business for your company. Why try to do it for another?

Productivity – The time required to serve customers and fulfill orders varies between companies. Order dynamics drive productivity. For example, apparel companies that have an average of three items per order can have very different productivity levels. If one typically has orders with three pieces of soft goods and the other has two pieces of soft goods along with a pair of shoes, the processing time will vary.

Social Activity – Comparing social activity is useless unless the companies are having the same conversations with the same people. We have clients that have very little community participation but are generating revenue every day from their social activity. We also have clients who have extremely active communities that also generate revenue. Which one is best? Both. Can they be compared? No.

ROI – Calculating the return on investment requires accurate information across the board. It is highly unlikely that you will receive everything you need in real numbers.

Transparency – Sharing proprietary information is foolhardy. If a competitor shares metrics for comparison, don’t expect them to be accurate. In some cases, there are errors in the collection and documentation. In others, the numbers are adjusted for appearance.

Wanting to know how your business compares to the competition is understandable. Asking questions so you have an idea of what they are doing and how it affects their metrics is a good way to get some insight. Trying to benchmark your business by another company’s standards is a waste of resources and will do more harm than good in the long run. Benchmarking against yourself and striving for continuous improvement is a much better way to succeed.

PS: Thank you to those who shared their opinions with me and inspired this post.

Delivering quality service is the cornerstone of every successful business. Start-ups can’t grow into sustainable enterprises without it. Established companies lose market share when service levels drop. The need for a good customer experience is well known and easy to declare. Identifying the specific characteristics required to meet people’s expectations is much harder and changes over time.

Customer service demands are very different today. Making everything as easy as possible is replacing the over-the-top exceptional experience that drove sales and loyalty a few years ago. Our digital world robs people of time, making a quick and easy shopping experience a luxury. It also makes delivering quality service more efficient and effective.

When you add the ability to provide on-demand information via social media to the self-service shopping preferences of today’s consumers, you get an economical way to provide exceptional service. A study by the Corporate Executive Board of more than 75,000 people who had contacted B2C and B2B call centers found that 57% looked for answers on the website before calling the company. Imagine how having the right answers easily accessible for self-service individuals would affect your bottom line. Even if it only reduced calls by 20%, wouldn’t it be a significant impact?

What if providing answers online also increased sales and customer acquisition?

The lines between customer care and marketing are blurring. Answers that solve problems and link to products and/or services drive sales. Companies that recognize this and use all available tools and channels to provide readily accessible information have a competitive advantage.

The best customer service begins with managing expectations. Providing policy information in an easy to read and understand format establishes boundaries. Always give your business a little wiggle room because things happen. For example, if orders generally arrive at the customer’s address in 3-5 business days, state that orders arrive in 4-7 business days. People are pleasantly surprised when they arrive early and you have some extra time if there is a problem.

Transactional emails reaffirm the expectations established during the shopping stage. Customers should never have to wonder if orders or messages have been received and when items or responses will be received. Providing confirmation and setting expectations in advance significantly reduces questions and queries. Send updates as soon as possible if challenges arise that change the information provided.

Most people (as in 99.99999999999%) don’t want to discuss their private business on a public forum. If customer expectations are clearly defined and follow up communication is good, your social pages won’t receive posts concerning specific order information or complaints. There may be the occasional private message, but baring catastrophic operational failure your customers won’t use social sites to resolve in-house service issues.

How is customer service a pillar of social media?

Quality service solves problems. When people think of corporate customer service, transactional issues usually pop in their mind. They forget that the products and services offered by companies solve problems. The types of problems vary, but the reality remains that demand is driven by the need to solve problems. This is where social media is a valuable service and marketing channel. It allows you to show customers and prospects how your company can solve their problems.

For example, if your business sells parts, providing how to troubleshoot videos with links to the appropriate items is a service. Even better, create how to install the parts videos and include link information in every outgoing order for those items. Use good keywords to attract natural search and links to additional information for buying. It serves prospects trying to resolve issues and helps customers insure they are doing it right. The results are more sales and fewer calls.

Naturally it takes time and effort to reformat and upload all of the information you have available. The reward makes it worth your while because social sites become members of your sales and service teams. If it is done right the first time, there is minimal maintenance and long term benefits from providing digital customer service.

Creating a successful integrated marketing strategy is a necessity in our multichannel marketplace. Silo management of marketing channels wastes resources and reduces results. The days are gone where dominating one or two channels was enough to grab market share. Capturing people’s attention requires multi-faceted campaigns that reach them wherever they happen to land.

Understanding your company’s customer and prospect expectations is a necessity when choosing channels and platforms. What works for your competitors may fail your business. You have to know what your target market expects from your organization.

If you haven’t seen much success from your social media participation, it could be that your expectations and activity are misguided. The rules of engagement defined by early adopters rarely deliver measureable results beyond fan and follower acquisition. There are four areas where social media works. In addition to providing opportunities, they provide the reasons companies need to participate.

1. Customer RetentionThe benefits of keeping customers are well known. Social media helps make it happen by offering the opportunity to create one-to-one relationships. Showing people that you value them helps keep them loyal.
2. Customer AcquisitionA community filled with happy customers attracts prospects. As noted in Social Casual vs. Direct Qualified Prospects, social media doesn’t work very well as a stand-alone prospecting tool. But when you use it for customer retention and service, acquisition is a secondary benefit.
3. Customer ServiceProviding quality service requires companies to answer questions before they are asked. When this is done well, service calls are reduced and marketing is easier. Use social media to share “how to”, “what happens when”, and troubleshooting information.
4. SEOUsing good keywords and links in social media posts improves search results. Social search often receives higher page rankings than traditional sources. When posting updates use keywords and links so that people find your business even when they don’t participate in social media.

Direct sales is missing from this list because revenue generated from social media is a secondary benefit for most companies. There are rare occasions where corporate income is directly attributable to social activity but this is an exception. If it happens, celebrate. Don’t expect it to be sustainable. Use social media as a relationship building tool so you can reduce service costs and improve loyalty. Sales and profitability will follow.

Your customers expect a seamless shopping experience. They want to be able to cross channels and jump platforms at their convenience without having to re-introduce themselves to you every time they venture into a new area. From their perspective, you should recognize them where ever they happen to be.

That expectation was more realistic in a world where a company operated in a single channel. Customers who frequented the local department store were easily recognized by the owner when their paths crossed at the movie theater. Similarly, it wasn’t unusual for service representatives to recognize a regular customer’s voice when an order was called in.

If a company had more than one channel (store and mail order), they were separate divisions that didn’t share information. Customers didn’t expect them to be integrated. Things change. Today, people know that technology can be used to integrate every channel and platform. They don’t think or care about the expense or challenges in doing it. They simply want it to happen so it will be easy for them to shop.

Integrating channels is challenging. People with unique perspectives have to work together to make systems with different protocols communicate. There isn’t a turnkey system available that provides everything your company needs to cross channels and integrate multiple platforms within a channel.

Adding f-commerce to your channel mix as a standalone platform fragments your customers’ shopping experience.

Ideally, your fans are already customers. They have placed orders, shopped your stores, and may even participate in your loyalty program. If your f-commerce platform isn’t integrated with your order management system, customers will have to provide information that you should already know about them. Instead of being recognized as a valued friend, they will be met with a “who are you?” questionnaire. In a world where easy trumps exceptional, it isn’t either easy or exceptional.

When P&G tested f-commerce, they used Amazon’s platform. Before expanding the test into other areas, they developed their own platform. This works for P&G because they didn’t have a direct to consumer system in place. If your business is already connected with the end user, then you need to recognize them when they buy, no matter where they choose to shop.

If you have an active Facebook fan base, you should definitely test f-commerce but don’t shoot yourself in the foot when you do it. The risk of customer alienation is greater than the benefit of a few extra sales. To venture into f-commerce without the risk:

• Use Facebook as a portal to your website. When customers buy, they will be recognized by your system as an existing and valued member.
• Acknowledge that people came from Facebook. You can do this with a special landing page, pop-up, or trigger email.
• Monitor the activity to see where you can improve the connection. There is a lot that can be learned from your web analytics. Are Facebook customers different from other channels or platforms? You won’t know without monitoring.
• Give it enough time and resources to succeed. Social media is an interactive dynamic channel. It needs regular updates to keep people coming back for more. Participation doesn’t have to be expensive, but it does have to be active.

Use the lessons learned to expand your reach and results. If the testing is successful, using a third party platform or developing your own may be the right answer. The information from the tests will help you define the needs, create a realistic budget, and integrate it with your existing infrastructure.

For guidance in creating a social media strategy that works, check out Social Media 4 Direct Marketers

Trap 1 – Investing Heavily in Unproven Territory

Trap 3 – Giving Your Business to Facebook