Functional benchmarking is the practice of comparing results across diverse industries and processes using commonalities in functional capabilities. This is often done to compare results to an industry that achieves superior results in a particular area. Functional benchmarking is also common when data is lacking for direct benchmarking. The following are illustrative examples.
ProcessesA telecom company compares its human error rates to aircraft maintenance benchmarks.Service QualityAn airline compares its first class customer service to luxury hotels and spas as opposed to direct competitors using quantified customer quality perceptions.Customer ServiceA telecom company benchmarks customer satisfaction metrics against the IT services industry as opposed to other telecom companies.
ReliabilityA bicycle manufacturer benchmarks its product reliability against aircraft and high speed trains as opposed to other bicycles.Financial MetricsAn aspirational brand of electronics benchmarks its financial metrics such as gross margin against luxury fashion brands.Brand RecognitionA local gym benchmarks its brand recognition against local restaurants as that's the only data they can find.
SalesA home automation firm benchmarks its customer acquisition cost against solar panel installers as robust data is available.OverheadA spa benchmarks its administrative overhead costs to the restaurant industry.PerformanceA brand of luxury sports cars benchmarks its acceleration times against Formula One cars.
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