Competitor Analysis is one of the most used technique in SEO and Digital marketing. It is one of the cheapest and easiest ways to grow your business or brand in different areas.
By Knowing your competitor’s techniques and strategies it will be very easy for you to build new tactics and strategies which can help your brand.
Many Marketers prefer competitor analysis to capture latest trends and changes in this competitive work market.
The big problem with all this is: how to analyze the competitor more effectively without losing yourself.
How to analyze the competitor without getting lost
Analyzing the competitor is basically observing every step of your competitor. Monitor your competitor movements and actions very closely. And finally, make a conclusion on what you have observed.
The process of competitive analysis must be effective. For that, it is necessary to be well structured and purely automated.
I say this because it is very common that many organizations or companies start with great enthusiasm to follow the activity of their direct competitors. But after few months, simply they leave the task due to lack of time or due to the absence of structured or good competitive surveillance system.
Near 90% of the organizations stop competitor analysis due to lack of time
I recommend these 3 key issues when analyzing a competitor:
- decide what to analyze from your competitor
- select a suitable tool
- carry out the observation
Although the process is simple, it is not absent from complexity. For that reason, the other solution is to hire a competitor analysis expert.
The advantage of hiring a competitor analysis expert can speed up your tracking system and avoid a lot of headaches on which tool to choose and on how and when to carry out the observation.
Step # 1: decide what to analyze from your competitor
In this automated world, with the help of automated tools observing your competitor is very easy and efficient. To analyze the competitor effectively, the first thing is to decide what to observe, follow or monitor.
This considerably varies depending on your goals and also the department where you are.
It is not the same to monitor the evolution of financial indicators of a company that observe the evolution of marketing or sales KPIs.
Avoid thinking too much about what to analyze from the competitor by knowing the key indicators of the competitor that you can follow.
Here are the top 4 indicators that you must follow
- Marketing and sales
- Human resources
If you were good in analyzing these 4 indicators of your competitor it will definitely help you to start and define your own scorecard.
Step # 2: selecting the tool
This is the toughest step that many marketing probably face.
And that is due to the existence of multiple inbound and outbound marketing tools with a wide variety of functionalities.
It is not the same to monitor the Adwords campaigns of your competitors that try to follow the contents of a website or determine the number of incoming links that a competitor is getting.
This is only in case of digital marketing!
Step # 3: carry out the observation
Once you have decided your competitor, what you are going to observe and with what tools you are going to prepare your follow-ups, it is up to you to carry out the surveillance work.
You should be aware of the changes detected by your analysis tool and how much this analysis can impact your brand growth.
Two objectives you must follow in competitor analysis
- Discover the strategies of your main competitors
- Find out what is working for them
Monitoring the activity of competitors can help you in learning from their success & mistakes and continuously test your company or business with the same success strategies of your competitor.
Understanding why the competitor has succeeded or failed in the market helps you to take advantage and can avoid mistakes or also helpful in implementing winning strategies.
That is the main object of analyzing the competitor
Types of competitors
This type of study can help you in defining what type of competitor you are. These are the categories that could be learned.
- Competition in the first degree: all companies that operate in the same market, distribution channels, with the same products or services and that have the same target audience as your own business. Example: Coca-Cola has Pepsi as a direct competition.
- Second-grade competition: those that operate in the same market, with the same distribution channels, with the same target audience, but with different products and services in some of their main characteristics.Example: Ford (cars in mass) BMW (Luxury cars).
- Competence in third grade: those products or services that meet the same needs as what your business offers, but differ in the main attributes that each one possesses.Example: meals satisfy your hunger, but Pizza Hut and Mc Donald’s do not offer the same product.
Levels of competition
This will depend on the degree of operations and geographical reach of the company. In the analysis you should include:
- International: they are those that operate in almost all the countries.This will give a broad vision to the large companies. For example, freelancer and up-work which operate globally irrespective of country and region.
- National: they are those that operate in the same country where your company acts.You must consider your sales volume, prices and the investment in advertising.
- Regional: the geographical scope is more limited, it refers to a specific region.The figures and data must be analyzed and evaluated. For example, it is vital to compare if the increase in your sales has been greater or less than that of your competition.
- Local: it is even more focused than the previous one.You must analyze how much influence you are having in sales and how much your competition is having. Who are reaching the clients in a better way and why?
What to analyze in your competitor?
When you already know your competitors and the levels at which they operate, it is time to go to the next step: the analysis of the results. Select a maximum of 10 competitors, that are most representative in that sector. Make a comparative study between them and your own company, by considering important variables. The most important factors that must be measured are:
The number of competing companies: with this indicator, you will be able to know if you operate in a high concentration, medium or low market.
Annual billing of the main competitors: with this data you can know the total volume that the market billed in a year and establish the quota in which each competitor and your own company participated.
Portfolio of products and services: this will give you an idea of what the market offers and its level of penetration.
Additional services: what are the other services offered by the competitors. With this, you can know the differentiating elements with great interest.
Quality of service: you can check how the service can be offered through various methods, such as Internet searches. You should know whether your competitors are offering different channels to clarify doubts of their customers by monitoring their social networks. These elements are necessary for comparing with your quality service and customer satisfaction. To improve the efficiency of your social platforms, know how you can increase ROI through these platforms.
Survey on your direct competitor: you can create a small questionnaire in which you can evaluate the main characteristics of your competitor: design, customer service, price, after-sales service, etc. All that will be necessary to compare with your own characteristics.
Hidden shopper or focus groups: these are methods with which you can try products of the competitor and compare them to yours. The first is to send a “hidden client” to your competitor’s business and the second to gather several people to evaluate the products.
Prices, offers, and promotions: analyze the prices of each one of the competitors, establish which is the most expensive, the average and the volume of promotions and offers that it handles.
Advantages of competitor analysis
- When conducting competitive studies, companies can convert all that information into competitive advantage. This helps you in gaining more precise knowledge than those who do not apply this type of studies.
- You can minimize the uncertainty factor in which you do not know the characteristics of the market in which you are.
- You can also reduce the margin of error when compared with your sense of smell or intuition.
- When you have relevant and updated information on how the market is, you have a greater focus and clarity on the strategies that the company should develop.
- You can optimize resources more efficiently by giving more accurate guidelines in your marketing strategies, advertising campaigns or communications.
- You can have a clear design and can send more direct messages when you have knowledge of the target customer.
- You can bring important information to the planning resource of the company.
- These reports help us in detecting the needs, tastes and expectations of consumers; either final or industrial.
- According to marketing experts, market and competitor research should have a budget between 1 and 2% of the company’s sales.
The main objective of these is to study in depth of the market, know the interests of the market, measure the positioning of your brand, know the impact of advertising campaigns. With research, you can develop concepts of brands or products with which customers feel a little more identified. In short, they serve in directing the company towards success.
7 tools for competitor analysis in SEO
Make a quick analysis of a website by just entering the URL, generating a detailed report on SEO, social media, optimization for mobile devices, and ease of use. It offers a free version and a seven-day trial. The paid service starts at $ 49 per month.
You can also install your extension in Chrome to analyze sites while you browse.
- Why use it ?: Because it allows you to have a general idea of your competition’s site in seconds, giving you useful information such as traffic information and most used keywords.
- Website: www.woorank.com
Analyze the incoming links of your competition to identify the sites that link them. The free version allows you to study only one site, while the paid versions deliver reports from 60 to 950 domains. Prices range from 29 euros per month.
- Why use it ?: Because it claims to be the largest intelligence database in the world and will allow you to discover who is influencing the most on the Internet.
- Website: www.majesticseo.com
Give information about advertising and keywords used by your competitors, who is generating links to your site and others, and a ranking of advertisers in AdSense. You need to register to access the free version.
- Why use it ?: Because it will tell you the successful keywords of your competitor and, therefore, what you should probably include in your content.
- Website: www.semrush.com
Collect information about titles and descriptions of the best-ranked sites in your area, details about advertising campaigns and a list of possible competitors.
- Website: www.spyfu.com
It does an analysis of Twitter accounts, giving you data about the followers, such as locality, interests, etc. It also allows you to make a comparison between your followers and those of someone else.
- Why use it ?: Because it is totally free and will give you a clear vision of the profile of your competitors on Twitter.
- Website: moz.com/followerwonk
It delivers a report on Facebook pages so that you can compare and explore optimization possibilities based on the activity and popularity of each publication.
- Why use it ?: Because it will allow you to analyze the actions of your competitors on Facebook.
- Website: likealyzer.com
It makes a competitive analysis of profiles and pages on different social networks, such as Facebook, Twitter, Google Plus, YouTube and LinkedIn. It offers a trial version of 14 days, then prices range from $ 500 per month.
- Why use it ?: Because it will give you a global vision of your presence and that of your competitor through the different social networks.
- Website: simplymeasured.com