Ever compare your weight to the normal weight for your height? Or maybe you used a salary website to see if you are getting paid enough? Well as a business you need to figure out where you stand in comparison to your competition.
Why? It is simple, without knowing where you are in the marketplace it is very difficult to be strategic in planning your marketing. It is always better to make business decisions based on data and knowing your marketplace requires you to measure your marketing performance against that of your competitors.
Gathering Competitive Intelligence Data
There are a few key metrics that are easy to gather and are critical for your overall business and marketing strategy. This includes components that will help you price your product or service better, add insights into potential future products/services, investment opportunities and identify gaps in your business. These metrics include:
Pricing: Today most companies will list their price(s) online so you can compare your prices against theirs. It is also wise to check back to the website on a regular basis to see if they are running any sales or promotions and if they are discounting their product/service. When gathering competitive data on pricing you can compile the results within a simple table with the month, product and competitor. As you can see in the example below you can highlight when a price dropped or increased and calculate the average to see if your product or service ranks higher or lower than the average.
Customer Reviews: How well you rank in customer review versus your competitors can help identify product or service’s quality. Another way you can use customer reviews is to quantify the number of reviews you and your competitors have. Review sites that can be used include general ones such as Google Reviews or Facebook, or they can be industry specific such as G2 Reviews for Software, TripAdvisor for hotels, RateMDs for doctors and so on.
One way of analyzing the reviews is looking at the trend, are the ratings going up or down? Of course, you want to track the total number of reviews as well as the overall rating of all reviews. Consider the example below you can see that Competitor A’s reviews are decreasing, while Competitor B seems to be more popular.
Product/Service Features: Mapping out how your features compare to your competitors can be an easy way to find a competitive advantage or add features or services to your business for an increased competitive advantage. Your competitor’s website, social media sites, along with their marketing materials are great places to gather this information. By spending time with learning more about your competitor, you are able to see the level of service that the company provides as well their product or service features.
Job Postings: Looking at the positions your competitor is hiring for is a great way to determine their areas of growth. If you see a posting for a social media manager than you know it’s an area that is important and will expand in the future. You can use glassdoor.com to see all jobs posted by your competitors, their estimated salaries and company’s ranking by its employees (current or previous).
Press Releases or Mentions: Press releases or mentions in the press can provide insight into breakthroughs, new products and any changes in strategy or structure of the company.
Measuring Your Website Performance
For marketers, there is no better place to analyze data than using website traffic. Here are some key metrics that you’ll want to measure your performance against your competitors.
Website Traffic: Website traffic is a way to quantify the size of the company and its popularity. It is also a consistent metric to measure overtime. A great resource is Amazon’s Alexa which does come at a cost or SimilarWeb which has some information for free.
Time on Site and Bounce Rate: While bounce rates are not relevant for websites with only one page, combining it with time spent on site can really help you understand how well your competitor’s website is performing. The longer people stay on the website and the lower the bounce rate, the better their engagement is.
Geographic Sources of Traffic: Unless you are running a regional business, chances are you have customers from places outside your city, province/state or even country. By identifying sources of traffic by geography you can uncover new geographic opportunities by identifying gaps in your competitor’s geographic distribution.
Website Traffic by Channel: The source of traffic can tell a lot about the marketing strategy. If they have more organic traffic than you, chances are their SEO strategy is better. If they have more social media traffic you need to examine your social media strategy. Once you have identified their sources of traffic, you can now do a deep dive by each source.
In the example below, you can see that mail represents a higher source of traffic for competitor C, so you may choose to sign up to their email list and look closer to their website to see how they are collecting emails.
PPC/ SEO: Looking at keyword ranking, marketing dollars spent on digital ads and other metrics can help you identify your keyword strategy and help fine tune your marketing budget. If you are doing SEO and PPC then you are likely already utilizing competitor intelligence tools, but here are some tools to get started:
These tools are easy to use and will give you information such as competitor keyword ranking compared to yours, competitor’s pay-per-click spent, show you the ads that your competitors are running and provide history for those ads. It will also provide backlink information where your competitors are mentioned, including what websites and to what page they are linked. This data allows you to optimize your own site, create a link building strategy, and improve your PPC ads.
Measuring Your Social Media Performance
Today social media provides the biggest insight into a company’s culture, customers and products/services. Some data is easy to quantify such as number of followers, likes per post and number of comments.
Additionally, you can conduct sentiment analysis on your competitor’s tweets and comments; some tools can make the job easier by automating the process. Sentiment analysis will provide information on if comments are positive or negative in nature.
Another way to analyze social media posts is to categorize them into group and quantify the number of responses, likes and shares they receive. This will allow you to identify the type of posts that are the most popular. Types could include: video, infographic, photos, promotional posts and so on. As long as the categories are consistent they can be done any way you choose.
How often should you conduct competitive analysis?
It really depends on your business, some businesses may want to some of all aspects of this weekly, quarterly or annually. How to determine what is the right timeline for your business?
Ask yourself the following questions:
- How often does pricing change in my industry? For example, travel deals come on the market every few days or once a week. While, a software company will only change its pricing once a year or even less frequently.
- How many customers does my company or competitor companies have? If there is large volume of customer reviews, and a large volume of transactions you may want to conduct the reporting more frequently.
- How active is the company on social media? Social media data can be very large to handle on a monthly basis, especially if the company tweets many times a day and is generally very active. If that is the case automating social media and running the analysis weekly is recommended. If the company is only posting less often you can get away with monthly reporting.
Three Ways to Continue to Measure Your Marketing Performance
While doing competitive analysis can be time-consuming, you can automate some of the process by utilizing the following techniques:
- Sign Up for Alerts – You can sign up for LinkedIn Job Posting by following your competitors, you can sign up for PR news and newsletters to monitor email activities. You can use google alerts and other tools such as Brand24.
- Use a Business Intelligence Tool – There are tools that can help you monitor social media activity of your competitors, SEO competitor tools and website traffic tools. While many tools can save you time they typically focus on only one area of your business. You can look into some of the following tools such as Datorama, DashThis and Domo. They differ by what sources they connect to, their pricing and capabilities, so be sure to shop around for the best tool(s) that fits your needs.
- Hire a Competitive Intelligence Analyst – Hiring someone to do your competitor analysis can save you time to focus on other tasks such as coming up with your marketing strategy, running your business.
There’s enough business for everyone and comparing yourself to a competitor does not need to be an exercise that causes you any anxiety. The reason you want to measure your marketing performance against that of your competitors is to help you strategically plan marketing initiatives and ultimately drive more sales to your business.