Competitor analysis: how do you stack up? Whether you’re an established business for over a decade or a start-up with less than a year of experience, you won’t know where you stand in your industry unless you conduct a competitor analysis. And with 80% of the American population shopping online, your competition in the digital space might be the most important competition you have. But tracking the competition on search engines and social media platforms is within your reach.
We’ve created the following guide explaining how to conduct an effective digital competitor analysis.
Competitor analysis is a process of researching and analyzing. You’ll look at the characteristics of companies in a given industry. In other words, it’s a way for businesses to gauge their standing relative to their competitors. Businesses use competitor benchmarking to determine the strengths and weaknesses of competitors in the market. This information helps to identify gaps in the market and fill them.
Competitive analysis can cover a whole arena of metrics and areas. You can also make it as specific or general as you’d like. The more thorough you are with your competitor analysis, the more effective your subsequent strategy choices are. And as digital marketing has become the most popular tool for businesses to grow brand awareness and generate more sales, so has conducting digital competitors analysis become necessary to stand out from the crowd.
Before you start using specific methods to analyze your competitors, you’ll first want a general understanding of who they are. How are they positioned within the industry?
To compile a list of your competitors, you’ll first need to divide your competitors into two categories: direct and indirect.
Direct business competitors offer products or services that are identical to yours. Otherwise, products are similar enough to pass as a substitute. They’ll also typically operate in your geographic area. Indirect competition provides different products than those that couldn’t pass as substitutes. However, they may solve the same problem or satisfy the customer anyway.
For instance, let’s use the example of coaching services. Let’s look at a company for life coaching and one for business coaching.
Both businesses satisfy the customer needs of getting additional guidance in their decision-making. However, business coaching has its own niche of helping individuals in managerial or CEO positions. Life coaching is more designed toward setting and reaching personal goals.
A life coaching business will act as an indirect competitor to the business coaching company in this situation. The business coaching team won’t need to analyze the life coaching business since their audiences likely have noticeable differences. But this doesn’t mean you shouldn’t spend any time on indirect competitors – instead, you should keep them on your radar.
Indirect competitors will have fewer barriers to entry than a new player on the block for entering your direct competition zone. By adding a new staff member or department specializing in business coaching, life coaching business has become someone you need to keep track of actively.
Managing your indirect competitors is another reason it’s key to stay up-to-date with your competitor analysis. You never know when certain businesses will enter or leave the market.
Next, you’ll want to understand these competitors’ positions in the overall market landscape. You’ll need an understanding of both the industry in general and their recent performance within this.
It’s a good idea to create a spreadsheet or matrix that will organize all of the data you find. To generate even more meaningful insights, you can update, sort, and share this information with your team. And having a visual representation of your data will help you identify patterns and come up with solutions more quickly.
One great tool that helps you gain insight into the market is Semrush Market Explorer. All you need to do is enter one website into its search field. This website will present you with a complete competitor analysis on a growth quadrant map. With this tool, you’ll be able to identify the influence of your competition in the marketplace. You’ll have information on their current audience size, market potential, and online market shares.
Each business takes a different approach to digital marketing. Most will include a mix of social media marketing, PPC advertising, SEO, and content marketing. Here’s how to look at how your competitors use all four.
Social media has become one of the most popular forms of digital marketing. The various social media platforms available allow businesses to curate the perfect digital representation of their brand.
Conducting a competitive analysis of social media platforms requires a holistic approach.
As you can see from these steps, you’ll need to be familiar with four groups: you, your competitors, your audience, and your competitors’ audience. Because social media is the most casual form of advertising, social media users serve as advertisements tools themselves.
For instance, that numerous followers of your competitor constantly repost their content. Using digital competitor analysis, you can identify these individuals, tailor your content to attract their interest, and even turn them into promoters for your brand.
At the very least, you need to have a basic understanding of how your competitors use social media. Take a look at the accounts they’re using and the type of content they’re posting there. Are you missing something that they’re doing well? Could you modify their content for your social profiles and make it better?
PPC advertising is another common choice. Though it’s used on social media, it’s most commonly found on the Google search results page. To understand your competitors’ PPC efforts better, investigate the following information.
Google’s Keyword Planner is a great place to start. Google Adwords is a popular choice for PPC advertising, and this tool gives direct insight into what your competitors are bidding on.
Doing this will help you identify gaps in your strategy. Keywords gaps refer to certain words or phrases that drive high search engine results for your competitors but are ones that you don’t use. When a keyword gap happens, your competitor has all of a lead’s visibility while you have none.
It shows the values and average cost per click (CPC) of your competitors’ keywords and the regions these keywords are running in. This information will give you ideas for keywords you can use in your campaigns and how often the public looks up those paid keywords. And you don’t even need to be running paid ads to access this tool – you just need to create an ads account.
Having access to these keywords can help you better assess how your competitors integrate them into your copy. You may be inspired and come up with a better idea for using a competitor’s selected phrase.
Search Engine Optimization (SEO) is one of the most comprehensive parts of a digital marketing strategy.
There are dozens of factors that go into an effective SEO campaign. But this is a good thing: you have dozens of the competitions’ areas to check out and improve.
Some of these elements can be best tested manually, and some can be tested with platforms like Google’s page speed checker or Ahref’s SEO tool.
Keywords are the most important metric analysis tool for tracking competitors’ SEO. You’ll need to have a list of your top keywords ready and manually check some of their highest-ranking content to pinpoint some of their top keywords.
Backlinks are also another way to gauge the success of your SEO against your competitors. Are competitors receiving many high-quality links from authoritative websites? If so, it’s time for you to acquire more backlinks for your website. Compare the traffic between competitor websites and your own to see how effective your SEO strategies are in certain regions. You may be attracting more leads from U.S. states on the east coast while your top competitor sweeps the west. How can you find a hole in their strategy that will give you access to this market segment?
Lastly, it’s a good idea to visit your competitors’ sites from a mobile screen. Google has emphasized the importance of a mobile-friendly site to SEO rankings – you’ll attract more visitors if you make your site a pleasant mobile experience.
Understanding your competitors’ content marketing strategy requires a primarily manual approach. You’ll have to explore competitors’ web pages to see the types of content and format they use.
Some of the elements on a competitors’ website that you should take a look at include:
By evaluating this information, you’ll better understand how your competitors attract viewers. You’ll also see how they keep viewers in the top, middle, and bottom of the sales funnel with relevant content to each stage of the buyer journey.
On your end, you can adjust your content strategy to fill in the gaps of your competitors. Say that you and your competitors offer CRM software. Your competitions have high-quality content for the middle and the end of the sales funnel, but their content doesn’t seem great at drawing new customers in.
Take advantage of this by putting even more emphasis on content that will attract new leads. Offer free resources for website visitors unfamiliar with CRM. Push an email sign-up that offers free guides and emphasize your free demo on every landing page.
Competitors’ content will also give you insight into their overall marketing strategy. You’ll also learn the language and psychological tactics they use. For instance, say a recurring theme on their content is the “power of now.” Their method for reaching customers across all of their platforms likely involves promises of instant responses, prompt shipping, and getting an instant quote.
With this information, you can assess whether or not you want your own digital marketing efforts to match elements of this strategy.
Whether you’re looking at your competitors’ content or analyzing their social media, conducting a SWOT analysis is the stage of your competitor analysis when everything comes together by providing a framework for you to compare the features of you, your competitors,’ and the external environment.
A SWOT analysis has four parts.
Use these steps after you’ve gathered your information on a competitor.
Your SWOT analysis will tell you your market’s current position. It uses the information available in the current market. Your SWOT analysis will allow you to pinpoint every strength and weakness your business has. Then, you can channel your resources against external factors.
As you conduct your SWOT analysis, you’ll want to look at your competitors’ traits. Next, you’ll want to look at external factors in the market like inflation or a growth in your target market. These external factors will help you better understand how you can succeed against competitors.
Let’s look at the example of coaching businesses from before to understand better how a SWOT analysis will help contextualize your digital competitor analysis.
For this particular digital competitor analysis, you decided to look at the content marketing strategy of the other business coaching operations that are also popular within your target market.
You visited the websites of 2 top business coaching competitors, taking note of the content on their websites, the website’s navigation, and how they promote their products and services on their website. You notice that both of those websites, like you, offer coaching services specific to small businesses. They feature quite a bit of content on their websites to promote these features. Some of that information is more updated than yours. However, you’re the only website that provides a free guide to outsourcing marketing for for small businesses.
Next, you also look at the team members that both of these companies have listed on their websites. One company has a large staff and ample resources, but they don’t have anyone on their team who has operated a small business. The other company has a smaller team, but they have a coach who has previously run their own small business.
You know that your business has fewer resources than the first competitor but more than the second. You also have three team members who have small business experience. Unfortunately, one of these team members is about to retire.
What can you do with all of this information? Conduct a SWOT analysis, and your next steps will be clear. Find your strengths. Your coaching business has more team members with small-business experience, and you’re the only competitor that provides a free resource to new visitors.
Next, you have your weaknesses. Some of your content is outdated, and you’re about to lose a team member. What about your opportunities? The creation of small businesses is on the rise after the pandemic, so your target market will likely increase
And now, look for your threats. One of your competitors has more resources than you and could hire more relevant team members. The pandemic also means businesses have less money to spend Based on this information, it seems your most significant asset is the expertise of your team members. One idea for a successful strategy could include getting multiple opinions from team members. For example, you could create a program that you could call the “duo-coach method.”
This new method will set you apart from your competitors. And you’d be using information that you discovered from their content strategy! The opportunity present from a growing number of small businesses could form a future strategy. For example, you could create a coaching discount for small businesses or an exclusive webinar series.
You’ll also learn where you need to step it up to remain a legitimate player in the industry. This SWOT analysis reveals that it’s time to update all content on your website as soon as possible. You also should look for a replacement coach.
In the example above, the business coaching company evaluated competitors’ content market strategies. They then conducted a SWOT analysis based on the information found from this type.
In reality, you’re not just limited to one type of digital competitor analysis. You should compare the results across multiple studies, like looking at competitors’ social media, PPC ads, and SEO tools. It will give you an even more specific idea of your next marketing strategy steps.
Let’s add one more brief SWOT analysis to demonstrate. Say, in addition to your competitors’ content marketing strategy, you also analyzed their SEO efforts. You found a few cities in which people are visiting your website more than they are visiting your competitors. Some cities have equal traffic and some cities where you fall far behind. Add this information to your SWOT analysis. Then you can make your next marketing strategy even more specific.
Before, you decided to provide a coaching discount for small businesses visiting your site. Now, you know that this promotion would be most effective if you run a local SEO strategy in the cities that give you the most website visitors.
The digital landscape is constantly changing. Think of your SEO strategy—it’s unlikely you are now where you were six months ago. Because your channels for digital strategies are constantly changing, so must your competitor analysis. Never stop working on your marketing strategy!
A strength your business has with its SEO strategy could become irrelevant with a Google algorithm update. A small-time competitor may change its social media strategy and become one of the market’s most prominent players. Devise your digital competitor analysis strategy as a continual process rather than a one-time metric analysis. The first time you conduct competitor analysis is a learning experience for subsequent digital analysis methods.
It’s a good idea to conduct a competitor analysis at different points in the year. Monthly tracking will keep tabs on changes or trends in the marketplace. The quarterly one will be for implementing more extensive changes in your strategy.
Using digital competitor analysis, you can stay ahead of your competitors’ websites, advertising campaigns, and social media content with a strategy that’s all your own. Contact the David Taylor Digital team to learn more about our services and how we can transform your business into a household name.