As communicators increasingly use benchmarking to help determine strategies and cost structures, previous benchmarking efforts will help put today's results in context. One key is to keep background notes and details about statistical methodologies so the information gathered today can be compared with benchmarking results months or years in the future.
A recent Public Affairs Group survey found that 85 percent of 530-plus "best practices" companies use benchmarking, but the process becomes more useful if guidelines are followed. It's essential, for instance, to use similar methods of data collection to make accurate comparisons, says John Barrows, senior manager of marcom for Nabisco, Parsippany, N.J.
Barrows is one of a dozen Nabisco marcom/corporate PR staffers who benchmark their corporate communications division functions against those of similar companies.
"The best benchmarking studies are those that are both qualitative and quantitative," says Barrows. "[In collecting information], you have to make sure that you don't force holes to be the exact shape for one corporation that they are for another. If you approach a study by standardizing the questions, you'd better provide a definition of that standardization."
Although most consultants hired to conduct benchmark studies don't generally share raw data, this kind of research would lead to better analysis, adds Barrows. Because of the variance in research methodologies, Nabisco PR execs go through reports with a fine-tooth comb.
In this story, PR NEWS looks at benchmarking through the eyes of PR professionals at three companies: AT&T, which has launched a broad array of new telecommunications services including an Integrated Network Connection for delivering integrated voice, data and IP networks; Nabisco; and Union Camp Corp. Union Camp is waiting to find out how competitor International Paper plans to handle the $4.9 billion acquisition of its $4-billion-in-sales operations.
AT&T
This global telecommunications leader has endured some growing pains. Restructuring has reduced its workforce in the last several years by about 20,000 to a current 108,000 worldwide. Obviously, a clear take on PR's piece of the debit puzzle was critical.
At year end 1996, about 300 AT&T staffers were handling philanthropy, marketing, PR, media and community relations and employee, executive and financial communications. Today, only about 200 employees handle the same tasks. AT&T does not put investor relations or lobbying under its PR umbrella.
AT&T has emphasized benchmarking to help gain a historical perspective on the resources poured into PR when compared to other successful businesses. PR benchmarking, warns Executive VP Dick Martin, has to be paired with attitude/customer behavior measurement to gauge PR effectiveness.
Nabisco
Nabisco uses benchmarking in two ways: to find out whether its corporate communications is keeping pace with other companies and as an internal quality barometer. Nabisco's PR team of 12 marcom and corporate communications specialists doesn't rely on one particular agency (PR firms are used on a project-by-project basis), so its PR professionals must keep a close watch on PR trends and issues.
Over the past decade, corporate communications has been involved in several benchmarking efforts. One, headed by the Public Affairs Council, provided critical information about Nabisco's peer companies, which include Hershey, Kraft and Pillsbury.
Reducing costs has long been the impetus for benchmarking. But these kinds of studies also can help companies reach decisions about issues "that aren't burning," such as where to house corporate archives.
But Barrows also believes benchmarking will be used by corporations to help determine how they will handle communications in a global market. "On a domestic basis, for instance, companies look very similar," says Barrows. "But once you try to get a hand on how many people are handling these functions globally, it becomes another story. For instance, our international headquarters is in the U.S., but our international PR is handled out of Canada. This may change in the future."
Union Camp Corp.
Union Camp Corp., Wayne, N.J., which has 18,000 employees, used benchmarking to make decisions about designing its Web site, unioncamp.com. Launched several years ago, the site, which even includes an investor handbook, has itself become a kind of benchmarking paradigm.
Before creating the site, employees canvassed the Web and did research to assess what bells and whistles to avoid as well as what content to include. Now, Union Camp uses benchmarking for new initiatives, according to Thomas G. Lambrix, senior VP of communications and public affairs.
Lambrix said the company generally handles its benchmarking internally, but that if it were looking for a consultant, he would consider proposals from several firms before choosing one. To keep costs down, Lambrix wouldn't do benchmarking that required travelling to other corporate sites. Union Camp's corporate communications department, which includes an in-house ad agency and public affairs, has about 23 staffers. (AT&T, 908/221-620; Nabisco, 973/682-7396; Union Camp, 973/628-2000)
AT&T Uses Technique to Budget PR
Through successive - and consistent - Fortune 500 benchmarking studies (the most recent completed by Arthur Andersen in 1998), AT&T [T] has set an expense-to-revenue-ratio goal for PR, says Dick Martin, executive VP of corporate communications.
Based on that model and its $53.2 billion in 1998 sales, the company spent under $106.4 million in PR last year, although execs won't disclose the total.
In 1995, AT&T had a.28 percent expense-to-revenue-ratio for PR, which means that.28 percent of revenue was spent on communications. But PR executives began to benchmark their peers to determine what they were spending on communications as cost-cutting measures hung in the balance at AT&T.
Three initial 1990s studies in which AT&T participated concluded the national corporate average was.2 percent, and.22 percent for telecommunications companies. AT&T has now brought that number below.2 percent, a formula that's part of its approximate 30-percent budget slashing.
"Our goal has been to keep our expense-to-revenue-ratio in line with other large companies," says Martin. "Think about what's been going on in telecommunications and look at companies like AT&T which are redoing their cost structures and you'll see the emphasis on justifying every single expense. Benchmarking is one way to do that."
The World According to Merck
Corporate communicators often benchmark Merck & Co., Inc, says the company's Director of Corporate Communications Sharyn Bearse.
The pharmaceutical giant puts out two progressive publications, "Merck World" and "The Daily," to its 60,000 employees worldwide to provide corporate perspective - with minimal puffery - about healthcare issues in the news.
The four-color monthly tabloid, Merck World, with an annual budget of $565,000 (primarily for mailing) features top-notch graphics, articles on a variety of technical and global pharmaceutical issues and stealable ideas.
Articles are tagged by icons that highlight how the news items reflect the company's strategic goals, and a front-page "What's New" column has brief hits on everything from stock splits to information about its operations in third-world countries.
And the monthly Dilbert cartoon (which it has secured persmission to reprint) certainly portrays a company with a sense of humor. (Merck, Sharyn Bearse, 908/423-7966)