Why is online competitive analysis so critical to your marketing strategy

Quite simply – Analysing your competitors can identify your strengths and weaknesses and strengthen your bottom line.

In conducting a competitive analysis you partake in a formal evaluation whereby you review the businesses of one or more companies that compete, directly or indirectly, with your own.

Online, competitors have access to each other’s company information and marketing materials that they might not be able to gather as easily in the offline world. This provides greater opportunities to arise out of the competitive analysis data.

Questions that you might ask of yourself might include:

• So how can your company improve its position and market share through analysis of your competitors? and
• What is the best way to implement a thorough competitive analysis?

In answering these two questions it would probably pay to consider the benefits of conducting a competitive analysis?

1. You will identify WHO you are competing against.
2. You will identify your own weaknesses.
3. Once you’ve identified those weaknesses, you’ll be able to improve your business by the analyses of your competitors.
4. You will also identify your strengths.
5. You will be able to identify or confirm your Unique Value Proposition (UVP).
6. You will be able to determine what factors drive success in your market space.
7. You will identify what specific actions you need to take in order to improve your competitive position.

In considering your competitor analysis give some thought to conducting a website design analysis where you subjectively evaluate different design aspects in relation to known benchmarks. This will help you determine the different strengths and weaknesses of your competitors and your own website. (Top Left Design has a free tool to start you on such an evaluation with over 40 questions covering 9 different aspects of website effectiveness evaluation).

In addition to the above evaluations, consider the following guidelines when conducting competitive analyses.

• Utilise a multitude of resources to identify your competitors. Who else is bidding on your PPC terms? What sites come up as natural search results for your terms? Check trade association memberships and business registries. Use your referrer data to identify what sites your visitors are coming from. Don’t overlook word-of-mouth information from your customers and investors.
• Identify key success factors (KSFs) for your industry and rate yourself and others on each of them.
• Identify the competitive strengths of each company in the analysis, including your own.
• Identify the revenue models of your competitors.
• Do your competitors utilise partnerships, outsourcing, or other strategic relationships?
• Whilst conducting your analyses, make note of unique or creative elements or approaches your competitors may use.
• Utilise search engines to discover the sources of your competitors’ incoming links.
• If practical, conduct your own mystery shopper campaign and make purchases from your competitors.
• Monitor your competitors over time.
• Analyse your competitors’ Google, Overture, and other PPC ads.
• Analyse your competitors’ ratings and rankings on a number of platforms.
• Depending on entry and exit barriers for your industry, your competitive environment will change over time. Continue to analyse your competitors as time progresses.

Remember that no company exists in a vacuum online. If you ignore your competition, you will lose the opportunity to discover your own strengths and weaknesses. Effective competitive analysis gives you the ammunition to “remove the blind spots” and see your company for what it is and as perceived by your customers, suppliers and investors do. This then will arm you with the information that will enable you to tune your marketing and business strategies for success.