It’s hard to build a marketing strategy in the dark as you can’t really asses your strong or weak points without understanding your competitive environment. Honestly, you can’t even really identify yourself as special or “the best” if you don’t know what else is out there. In other words, you can’t beat your competitors without being aware of them. Makes sense right?
This is why competitive analysis is such an important part of building your marketing strategy. It helps you make smart and informed decisions about your next steps, your market positioning and where you should focus your attention. Knowledge is power and the more you know about your competitors, the better impact your marketing makes. But how do you collect competitive data or better yet, what should you be looking at?
Remember, Conducting a competitor analysis is about getting the right in-depth data about your competitors and knowing how to translate it into actionable items. Here are the 4 first steps you should start with
The 4 steps to jump-start your competitive analysis:
1. Product features and pricing
One of the first things you need to understand about your competitors are the 2 Ps – Product and Pricing. Both are very easy to find out.
I’m guessing you already have a list of competitors in mind. Just visit their website and check what products they’re selling or promoting at the moment. If you want to go the extra mile, just schedule a sales call with one of their representatives and listen to their marketing pitch and product prices. You should also sign up to all available trial versions they offer just to see how their product really works. Analyze and document your findings, this will help you get a 360 degree perspective of their product.
2. What are their display ads saying and where do they place them
You can learn a lot by about your competitor by seeing their ads and messaging, but you can learn even more by knowing where they spend their display ads budgets. By looking at the ‘display’ section on SimilarWeb you can see where your competitor buy ads, which ad networks perform best for them and even see the actual ads they use.
Knowing which ad networks they work with or what sites their ads perform best on can really help you focus your budget and paid media efforts. You can actually save money by either targeting only the best ad spots they use or going for the long tail which may bring less volume but will also reduce the costs. Lets remember that ads don’t perform only on their CPM, but also on the actual creative which includes design, copy-writing and relevance. You should really review the actual ads to better understand their strategy.
3. Social Media
Social Media analysis is tricky because you can’t get the insight that you typically gain from your competitor’s website. It’s hard to to tell where they spend their money, what their ads look like or what is the exact content that brings them the most traffic. Still, there are a few basic things you can do to measure your competitor’s Social Media efforts. First of all, start by checking on what social platforms are they active on. Is it just Facebook? Is it Facebook and Linkedin? Find out . After mapping which channels they’re on start looking at measurable metrics.
For example, If they are using Pinterest check how many boards they manage, how often do they post, how many Like / Comments / Responses they receive. What type of boards do they run etc. If they use twitter just check out how many people they follow, who follows them, how many tweets post per day, the content of their tweets, are they getting retweeted, do they engage with their followers? Well, you get the point. For each platform look for the relevant metrics.
Another way to measure your competitor’s engagement on social media is by using a tool like hootsuite.com. By adding a “search by keyword” tab you can track your competitor’s brand name and see how many people mention it on twitter or google+ per day and how they respond to the mentions etc.
4. Where does their traffic come from?
Knowing where your competitor’s traffic comes from is like striking gold. Your competitors compete for the same audience which means that their best traffic sources are very likely to be your best traffic sources as well. Knowing what sites brings them most of their traffic enables you to target the same sites. You can pick the top sites driving traffic to your competitors and buy ads there, offer to do a guest post on a subject that is relevant to both your readers or whatever you can do to interest them.
For example, Lets say I run a small online bookstore specializing in management and marketing books for entrepreneurs. The first thing I’d want to do is see where my potential competitors get most of their traffic from. If i’ll take alibris.com as an example, I can see that their top referrals come from dealply.com (over 11.75% in the last 3 months). If you’re not familiar with it, dealply.com is a website that offers daily deals and discounts. I can assume that Alibris has a deal with Dealply that is going pretty well (Since it generates a lot of traffic for Alibris). As a small bookstore owner I can try and break a deal with dealply.com as well.
Knowing where your competitors traffic is coming from will help you better target your online efforts but will also help you unveil their ‘hidden’ online story and give you the advantage of seeing the full picture, while composing your marketing strategy.