Commercial Insights

Turning insights into impact: How benchmarking can lead to growth

Businesses can drive performance by comparing financials and other benchmarks against peers and identifying ways to narrow the gaps.

It’s said that comparison is the thief of joy. But for businesses with an eye on growth, comparison can be one of the most powerful tools at their disposal.

Businesses looking to improve performance may realize significant benefits from taking a close look at not only their own finances and operations, but also those of their peers. This is where competitive benchmarking comes into play.

Competitive benchmarking is the process of comparing a company’s performance, products, processes or customer experience against industry leaders or direct peers. It can be one of the most effective ways for businesses to understand where they stand in the market and how to improve.

“Engaging effectively in competitive benchmarking starts with thorough self-evaluation and establishing internal financial benchmarks,” said Ginger Blake, Commercial Treasury Management Executive at Regions Bank. “In order to evaluate where you stand in relation to peers, you need to have a solid understanding of the state of your current cash conversion cycle and where there may be potential to improve cash flow management through enhancing operational processes.”

Blake noted it’s important to keep in mind that businesses do not have to take on the exercise of conducting this type of financial review on their own. Banking relationships and tools, such as Regions Cash Flow Advisor, can help simplify the process and provide detailed insights. The Regions Cash Flow Advisor intelligent conversation tool analyzes a company’s collection and payable efforts and provides reporting and insights around the company's cash management cycle, through a one-on-one conversation with a dedicated Regions banker.

The solution also provides comparable industry data, aggregated on an anonymous basis and not identifiable to any specific company by industry sub-sector and company size, that can allow a company to compare its cash flow performance with industry peers – which can open the door to exploring additional areas for competitive benchmarking.

“Benchmarking can take many forms, ranging from customer satisfaction scores to comparing operational KPIs against peers. The goal is to compare your company’s performance with others in your industry who are achieving superior outcomes in a particular area and analyze ways to narrow the gaps,” said Regions Commercial Banking Leader Chris Claybrook.

Claybrook notes, however, that not all benchmarks are created equal. “It’s important to measure the indicators that align with your company’s strategic objectives, and any comparisons should be against peers of a similar size and industry sub-segment. Competitive benchmarking works best when KPIs are comparable, strategically relevant and measurable across companies.”

Because of the level of variability involved, businesses can benefit by working closely through the process with trusted banking advisors. “When you turn to a bank for guidance in benchmarking against your peers, you want to do so with one that has extensive experience with companies in your industry, as well as deep knowledge about your company’s specific needs,” said Claybrook. “Bankers, like the industry-specialized professionals on the Regions Commercial Banking team, can bring a combination of industry knowledge and local connection and are well equipped to share general industry observations and discuss solutions you may want to consider."

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