Peer benchmarking is the process of evaluating your credit union against its competitors. While comparing two or more businesses, you may learn about how well match up against similar organizations.
That’s all well and good, but does comparing oneself to the competition help? In this blog, we’ll look at how to use this information to your benefit.
Benchmarking (In General)
Let’s start with some relatable content: dancing.
You’ve danced before. Regardless of how much you like dancing, whether you’re dragged onto the dance floor (or the kitchen, or the bedroom, or the concert venue), or if you do the dragging, nobody can truly escape the occasional dance.
All you have to do is close your eyes, move your feet, get your hips into it, and let your arms do what they do. Just like that, you’re a beautiful, flowing embodiment of art.
Or you’re an uncoordinated jumble of hair and elbows.
There’s no way of knowing if you’re good or bad without objectively comparing your performance to that of other dancers. This kind of informal peer benchmarking will benefit you by letting you know if you should save your dancing for your wedding day, or if you should be up on stage with the pros.
Proper evaluation might save you the embarrassment of waltzing into a room, announcing that “the Master of Dance has arrived!!!” and then disappointing polite company with clumsy gyrations.
Sorry, Let’s Make This Relevant
If you run a credit union, you have more to keep track of than a few awkward limbs and the beat. There are many different areas in which you might measure your performance.
Peer benchmarking is a good first step in any strategic planning session. Any time you want to further develop your credit union, it’s good to take stock of what both you and your competitors offer. By evaluating various key performance metrics, you can gain perspective on a few things:
- Who your competitors are
- How your competitors are performing
- The relative overall performance of your credit union
- Your strengths
- Areas to be targeted for improvement or further analysis
A tertiary benefit of peer benchmarking is that it will help you see your credit union in a new light. Viewing your credit union in relation to others like it may inspire helpful new practices or strategies.
And Your Peers Are…
One of the best things you can do early in the peer benchmarking process is to accurately define who your peers are. It’s important to compare yourself to your actual competitors rather than who you want to compete with.
You should benchmark yourself in relation to credit unions with similar sized member bases, with similar assets, and in the same region.
After all, it wouldn’t make sense for a larger credit union with a billion dollars in assets to compare themselves to a smaller credit union with only a few million in assets, and vice versa. (Likewise, you wouldn’t judge a break dancer against a tango dancer—with different goals and techniques, they’ll exhibit different strengths and outcomes.)
At the end of the day, the benefits of peer benchmarking is that it can be an invaluable tool for assessing where you sit in relation to your competitors. However, it’s not designed to fix any problems, so save some energy after benchmarking, because the real work begins afterward.
If you’d like to see how LiveSurvey can help you get started with peer benchmarking, check out the different ways that our survey platform can show you where you stand with respect to your competition.
If you want to learn more about surveys, then check out these blogs below!