Most benchmarking methods are based on comparing financial and operational indicators with that of the leader in the market. Financial and operational indicators may not be sustainable in facing the speed and competitiveness of today's marketplace. The purpose of this paper is to propose a dynamic customer‐driven benchmarking approach that captures changes in customer perceptions and expectations and subsequent changes in service standards set by experienced customers as best practice.
This paper is based on examining the current literature on benchmarking and suggesting a new approach for benchmarking that puts the experienced customer as the standard for benchmarking. The customer‐driven benchmarking approach is one that will ensure that companies are continuously improving and advancing their values to meet the needs of the sophisticated and demanding customers.
The use of customer‐driven benchmarking will not only provide a clear direction and methods for learning from customers by initiating value‐added services that exceed their expectation, but moreover, help to sustain a company's performance and competitiveness in the long‐term.
Benchmarking performance against competitors on the basis of financial and operational indicators may not guarantee a sustainable competitive edge. This paper highlights the importance of customer‐driven benchmarking as a strategic approach for a sustainable market performance, emphasizing the standards set by “experienced customers as best practices”.
