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The role and benefits of competitive analysis

Competitive analysis is an exploration of the companies in a given industry sector or market niche that are competing with your company’s products or services for market share. The analysis may be an in-depth exploration of the top five competitors, or a larger number of competitors could be examined in less depth. Competitive analysis can be useful for both profit and non-profits because it gives a good sense of what’s happening in your industry or sector and can help your organization to become more effective or efficient by learning what others do well that you can benefit from.



The primary benefit of any competitive analysis is a better understanding of what your competitors are doing, what they are offering to customers, and how to maintain your competitive advantage. The findings from an analysis are likely to factor into your own company’s strategic planning. Of course there are other take-aways you can obtain from the process of analyzing competitors.



Identify best practices


Exploring competitor websites offers the opportunity to discover what is working well for them, as well as what is commonly being offered via the Web. For example, if all the competitors are offering specific content and functionality, users will likely expect your site to offer similar content and functionality. It is important to note that user expectations often go beyond just giving the information or offering the functionality, and move into questions of information design and interaction design. In other words, what is the quality of the user experience? Poor implementations are unlikely to result in higher conversion rates.



Website useability is a hot topic these days and it can affect ranking and conversion rates.



By engaging in competitive analysis you can also see what advertising channels are working the best for you competitors. You will be able to see what keywords and keyword phrases are being used the most, what page layouts are most appealing to their customers, if new technologies and social media are affecting their sales and if so, how.



All of this information can help you to make informed decisions about where to advertise, how much to spend on advertising, technologies that you might need to integrate into your site, the type and quality of content on competitor websites and how you might best compete and excel.





Here are some things you can do to begin your own competitive analysis:


1. Use a variety of resources to find where your competitor is bidding on Pay Per Click. If you think your competition is bidding on certain search engines and not on all of them then they are probably getting a good ROI from that pay per click,. Ask yourself why? Perhaps because of low competition in that particular pay per click search engine. How can you benefit from this knowledge?


2. Identify who is coming up in the natural search results, because for a site to come up under natural search results means they have a well-optimized site. Review their site. Pay close attention to navigation, content and keyword density. Are there things you can imporve on your site to make it nearer to your cometitor’s site in terms of optimization?



3. Identify whether your competition is utilizing partnerships, outsourcing their SEO or linking with other websites. Would it be beneficial for your business to have these kinds of relationships? Would you benefit from outsourcing your SEO if you are not currently doing so?


4. Check to see if your competition is a member of business and trade associations, and registries. Do they seem to be benefiting by these memberships. If so, consider joining them. Can you get a referral link on their websites to help in your link popularity and online visibility.



5. Identify how your competition is making money from the website and their revenue model. How does it compare to your revenue model. Are there things they do you may need to consider implementing?


6. During the course of analysis use the age old practical method of ordering online to evaluate your competition’s customer service. How does their online sales process work and identify what they are doing right or wrong and take advantage of their mistakes.


7. If your competition is offering a free mailing or newsletter subscription join them. This will provide a first hand look at their marketing strategies. How does their content compare with yours? Do they have products you should consider retailing that you don’t currently?


8. See what social media websites your cometitors are advertising on or have a presence on? Is your site also represented on those sites? Are their niche social media websites your competition particpates in that you don’t? Should you?



9. Analyze your competitors PPC ads. Do you need to modify your PPC campaign ads?



10. Use different online tools like Alexa, Compete, Ranking tools to find what are their rankings and ratings are and do that on a regular basis to find who they are doing compared to your website.


An effective competitive analysis gives you a lot of information about your competition and will discover your business strengths and weakness and improve your rankings online.





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