is submitted, Benchmarking Analytics assigns an ID number to it to keep the company’s name confidential; individual responses are never shared outside of the company, including with FEDA. This year’s addition of a separate survey for manufacturers is a first for the association’s annual benchmarking survey. Segmenting distributors and manufacturers will ensure respondents are being compared to like companies and that the survey questions better reflect their differing pressure points. Manufacturers are typically more concerned about the cost of labor and goods, for example. FEDA members that participate in the survey will not only

gain greater insight for their business, but will also improve the overall understanding of the industry. A larger sample size means more data points and members will be more likely to find similar companies they can be compared against. Through that comparison, members will be able to identify the areas where they’re exceeding industry standards – or where they may need to increase their focus to remain competitive. “The more participants the more ways we can segment the data,” Mackay notes. “The more we can whittle it down to companies that look like you, the more valuable it will be.”

Putting Benchmarking to Use Once the responses have been received, Benchmarking Analytics will compile a report for each participant. The Individual Company Financial Performance Dashboard, delivered as an Excel file, consists of several sections, including: an executive summary; a scorecard that rates the company on several factors; and detailed breakdowns that allow companies to drill into the data and measure their performance in such areas as employee productivity, financial ratios, trends, and income statements. In addition to comparing individual businesses against the

industry, the report that respondents receive will identify the benchmarks of high-profit companies – businesses that earn two to three times as much as the industry standard. Traditionally, one out of every four FEDA members is marked as a high-profit company, says Mackay, demonstrating the strength of the market and providing a blueprint for others to achieve the same success. “If one out of four can do it, then it should be a reasonable goal for the other three-fourths if you are in the same industry,” he says. The report will also help participants plan for the future. It includes a “What-If?” toolkit that enables users to tinker with the numbers, such as increasing prices by 1 percent or raising sales by 5 percent, and then see what impact that change would have on your company’s profitability. By arming FEDA members with this data, Mackay believes they will be able to better plan their strategy and pivot their business to manage the COVID-19 crisis. “Nobody has unlimited resources,” he says. “From benchmarking, you find out true industry benchmarks rather than [just going with] your best guess.”

Summer 2020 15

“The thing we know from the past – from the [Sept. 11 terrorist attacks] to the 2008 recession – is that some companies survive, maybe even thrive, better than others in all kinds of economic conditions. So when things go south, what do companies do to maintain profitability?”

— John Mackay Founder

Benchmarking Analytics

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