THE SEVEN LEVELS OF BENCHMARKING

By Mike Drapeau
Editors Note: Reprinted by permission of Sales Benchmark Index.

Best practices benchmarking is the how of closing the gap between current and improved performance, enabling
organizations to understand and improve the processes within their businesses. Once an organization has diagnosed
problem areas and quantified the magnitude of opportunity for financial gain, benchmarking naturally emerges as the
best next step.
Through benchmarking, knowledge gained by studying an organization known to excel in a particular area is distilled
into a set of guidelines, habits, processes, and policies that can be introduced, with suitable customization, into the
organization seeking improvement. This series of stepsidentify, capture, analyze, extract, modify, and implement
another organizations best operating practicesis the essence of best practices benchmarking.

FIRST THINGS FIRST: MEASURE THE SALES FORCE

Any effort at best practices benchmarking should follow a metrics-driven benchmarking exercise. Why is this so? The
effort to import best practices is a difficult one and can be expensive and time-consuming. Accordingly, it should not be
undertaken until your organization has proven that, when adopted, such best practices will impact an area that shows a
significant gap between current and future status.

FROM WHOM SHOULD YOU CHOOSE BEST PRACTICES?

Interestingly, the organizations from which a best practice is selected to emulate may or may not fall within the peer
group used for metrics comparison. In fact, many times they do not. Best practices benchmarking can take many forms,
but it always contains a strong component of process-based mimicry. This is not surprising, for imitation is the sincerest
form of flattery, and, when possible, organizations want to learn from their noncompetitive peers in as rapid and
nondisruptive a fashion as possible.
One hurdle to best practices benchmarking is a simple oneknowing which companies to look to for best practices.
Industry reputation is sometimes undeserved. How many times, in fact, have press releases or other publicly-available
stories about your company that spurred you to think, That doesnt sound like my workplace!?

THE SEVEN LEVELS OF BENCHMARKING

As one would expect, there are different degrees of benchmarking intensity as it relates to best practices. 1 These
degrees begin at a basic level and proceed to the most involved (but also most effective) form of best practices
benchmarking. This list can be adapted for particular disciplines, as reflected by the sales benchmarking-specific
descriptions below.

LEVEL 1: LEARN FROM PAST SUCCESS

When an organization performs success analysis, it documents what went right as well as what went wrong on any
number of corporate-specific tasks. Oftentimes, places of success reveal the existence of centers of competency that
can be exploited by other areas of the business. Virtually anythingsales meetings, reports, rep review projects, sales
transformation programscan be captured and assessed using some form of success analysis. There are even software
programs in the knowledge management industry that perform this function. The first step is to recognize when there is
success and document it. The more difficult follow-up actions of publicity, sharing, and emulation are where the value is
obtained. This is the most elemental form of best practices benchmarking, and it is surprising that so few companies
practice it.

Bogan, Christopher and Michael English. Benchmarking for Best Practices: Winning Through Innovative Adaptation. McGraw-Hill, 1994.

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THE SEVEN LEVELS OF BENCHMARKING (continued)

LEVEL 2: BORROW GOOD IDEAS
Borrowed ideas originate from outside the organization and are freely available. Ideas can come from research (a far
more realistic activity in todays open Internet search society), observation, and inference. The source of the idea is not
especially important when it comes from the public domain. What is important is that the idea is already working for
some other salesperson or sales organization. Some creative adoption and recognition is necessary to perceive that a
best practice can and should be applied to another organization. As with Level 1, it is relatively easy to find good sales
ideas but more difficult to implement them into areas of an enterprise where they do not yet exist.

LEVEL 3: BEST IN COMPANY

This type of benchmarking focuses on the follow-up activity that occurs in organizations collecting large amounts of data
through customer records management (CRM) or other sales-related systems. Through the collection, assessment, and
display of this data in various dashboard systems, sales executives can spot the best performers. The trick that many
miss is not simply to identify who scores highest in one or more significant sales metrics but, instead, to systematically
study those top performers. What are they doing? Why and how does that help them excel? What are their habits and
attitudes? How do they differ from the median quota-bearing sales representative or sales manager? Answering these
questions allows a list of best-in-company practices to be assembled and then disseminated throughout the sales
organization.

LEVEL 4: INDUSTRY STANDARD

This type of benchmarking and the three that follow all require comparison of internal performance to external
performance. What differs in each is the degree of excellence represented by the external sample set. In industrystandard sales benchmarking, the goal is to bring the sales force up to a performance level approximate to that of a
relevant peer group. The gap between your companys sales forces and the median state for the peer group might be
great and the financial payback large.

LEVEL 5: INDUSTRY LEADERSHIP

Here the goal is clearly to exceed top competitors performance in the sales function, not just achieve parity. The ability
to demonstrate such superiority rests partly on the discipline of competitive intelligence gathering. In the end, though,
the fruit of achieving industry-specific excellence is the confidence that your sales force is contributing more to your
business than the competition. This does not mean that the sales function has achieved a strategic advantage for the
organization, just that it has achieved prominence in the identified market space.

LEVEL 6: BEST IN COUNTRY

Achieving this designation may or may not have significance to the organization based on its customer base, market, and
geography. Those selling to government organizations or those in relatively closed economies will value this highly.
Being the best in a nation in a critical business function can assist in advertising, talent recruitment, and even marketing.
Best in country can be demonstrated if the data exists to support it and the organization considers it relevant to
compare a business function across many industries, services, and companies.

LEVEL 7: WORLD CLASS

The urge to be the Babe Ruth of benchmarking is irresistible. Sales leaders particularly are always on the hunt for the
big idea that is easily adopted and yields breakthrough results. These do exist, but they are a precious few. Most success
achieved through sales benchmarking takes the form of a series of modest improvements that, taken together, enable a
sales organization to achieve world-class performance. To attain world-class status in benchmarking requires a deep and
longstanding commitment, resources, patience, and a willingness to persevere through many obstacles. One of the most
difficult experiences for those who embark on a world-class benchmarking effort is the humbling experience of
comparing their performance against the best in the world. Oftentimes, the gaps are large enough to be discouraging,
even humiliating.
Now that the bar is set high, the next step is to understand how to overcome the obstacles to best practices
benchmarking and then begin.

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THE SEVEN LEVELS OF BENCHMARKING (continued)

For more on sales-specific benchmarking, read Making the Number: How to Use Sales Benchmarking to Drive
Performance, by Greg Alexander, Aaron Bartels, and Mike Drapeau.
Mike Drapeau is executive vice president and co-founder of Sales Benchmark Index (SBI), a strategic advisory firm that
helps executives understand how well their sales force is performing relative to peer group and world-class levels. For
more about the discipline of sales benchmarking, please visit www.SalesBenchmarkIndex.com.

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