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One of the best ways to get ahead in today’s business landscape is the ability to perform a comprehensive competitor analysis that’s aligned with business goals. And with the digital field being the playground of choice for most businesses, it’s even easier to get hold of tangible, actionable insights from the multitude of data that’s available with the right set of tools.

In this article, we discuss what a competitor analysis entails, how to go about it smartly, and the readily available tools you can have at your disposal. Let’s get started!

Competitor Analysis Defined

Before we jump in, let’s set the foundation for this article by defining what competitor analysis is, what it does, and what it aims to accomplish. The goal of competitor analysis is to gauge the performance of various business enterprises in a predefined market. When a competitor analysis is done right, it can help a company identify why certain ventures are successful, enabling it to find a more advantageous market position in the highly-competitive business landscape. When it comes to defining a market, it can be segmented into particular products (leather goods), or an industry (rubber manufacturing). In a competitor analysis, it is likewise crucial to note that a company’s strengths and weaknesses must be weighed in alignment with its strategic goals. This allows it to see what it can do to improve its position and not just base it on what works (and what doesn’t) for others.

How to Perform a Competitor Analysis

The “right” competitor analysis will largely depend on the scale of your operations. But with that being said, there are still a few basic steps you need to make sure are done appropriately. When you’re able to do the steps below thoughtfully, you can create a personal development plan to glean insights that can help you make wiser business decisions and craft the most optimal strategies.

#1. Identify your competitors

While this step may seem obvious (how are you going to do a competitor analysis otherwise?), it’s important to note the difference between direct and indirect competitors. A direct competitor is one that’s offering the same product whilst also targeting the same customer base. Meanwhile, an indirect competitor sells a similar product, but targets a different customer segment.

While it’s certainly vital to learn as much as you can about your direct competitors, performing ample research on yoru indirect competitors is equally important as it gives you a different perspective on the industry you’re in. Aside from social media, videos and podcasts, there are a number of tools and platforms you can use to do a basic search of your indirect competitors (Product Hunt and Crunchbase come to mind).

#2. Segmenting the list

Once you’ve come up with a list of competitors, you need to narrow that list down. As a benchmark, you can start with around seven to 10 relevant competitors that ideally:

• Sell similar products and have a similar value proposition
• Market to similar and slightly different demographics
• Are both new and more experienced

Then, you can begin segmenting the list using a few key categories:

• Price range
• Product offerings
• Online presence
• Content marketing strategies
• Competitor types (either direct, indirect, or tertiary [related brands that may market to the same audience but don’t sell the same products])

Having these data on a spreadsheet will give you a good enough idea of their strengths and weaknesses – a solid base for any competitor analysis. Should you feel the need to dive deeper you can also look into things like:

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• Positioning (how they connect with their target market and build a favorable reputation in their eyes)
• Competitive advantage and offerings
• Marketing

These things can give you a deeper insight into what makes them resonate (or not) with their target audience, enabling you to take inspiration for what could potentially work for you and avoid those that don’t.

#3. Digital marketing analysis

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Depending on the scale you want to conduct your competitor analysis on, a solid digital marketing analysis could be an extensive step. But there are a few basics you can start with. Understanding how your competitors rank on search engines is key in today’s digitally-inclined business landscape. When performing a competitive SEO analysis, here are the main things you need to consider:

• Keywords – Using SEO keyword tools, you can find out what keywords are important and relevant in your field, including which gets the best conversions. These tools can also show you how well your competitors are performing with those keywords, the quality of SEO and content they use, with some tools even able to provide you tips on how you can do better.
• Domain and links – These refer to the number of links a website gets pointed with, as well as the number of websites that create these links. Knowing your competitors’ links gives you a glimpse into what you can do to get an edge over them. It also shows you which sites you can get links from, and lets you know what type of content attracts links.
• Social media – You can start by identifying which platforms your competitors are leveraging the most. Then, using social media analytics tools, you can find out which of your competitors has the highest share of voice (SOV) – that is, a brand’s share in the market compared to their competitors.

Again, with the digital space serving as a dominant part of how business works today, there’s a good chance you won’t be able to analyze and tinker with all aspects of digital marketing. What you can do, instead, is look at your business goals so you can see which areas you need to focus on.

Speaking of which…

#4. Review your findings with your own goals and strategies in mind

It’s important to note that not everything you find that’s working for your competitors will be applicable to you. You might also find that some of the campaigns you’re running (and have had relative success with) a few months back may no longer correspond to current market trends and needs. This is why you also need to make sure that your goals are still aligned with the current market climate.

As well, you need to communicate your findings to other departments. There are instances, for example, when certain insights won’t yet be applicable to the marketing team. However, they may already be actionable for the sales department. This stream of communication should always be open in order for everyone in the company to be agile enough in responding to market trends and needs.

Top Competitor Analysis Tools

Semrush

What if you could do SEO, content marketing, competitor research, PPC, and social media marketing from just one platform? Well, you technically could with Semrush. But when it comes to competitor analysis, it’s a tool that digs deep, providing a comprehensive analysis of your competitors’ backlinks, top-performing content, and the keywords they’re ranking for. As a bonus, it also tracks smart mentions, giving you a better idea of their online reputation.

Serpstat

This tool helps you find your competitors while also providing you with a plethora of data on their SEO rankings. It also features a tree view that shows a map of competitors’ websites and which pages rank for which keywords.

Meanwhile, their URL analysis feature allows you to find competitors for each category of your website. The batch analysis feature, for its part, enables you to compare up to 200 domains for different metrics.

Alexa

This tool offers automated website analysis, giving you insights into websites’ strengths, weaknesses (cluttered design, for example), and digital marketing opportunities. Other features include the ability to check the popularity of a website by measuring organic traffic, and rank it in their database accordingly.

Builtwith

For a more focused tool, Builtwith takes on the online technologies market and tracks technology trends and stats on key market figures. Basically, you can choose a technology that you’re keen on and find statistics on its usage, key players using it, while comparing your own data with your competitors.

Final words

Again, performing a competitor analysis can be an exhaustive pursuit if you want it to be. But it doesn’t always have to be, particularly if you’re just getting started either in your field, or in your endeavor of achieving growth. There are simple steps you need to adhere to, which can already provide you with great insights to get the ball rolling.

Just keep in mind that before diving into the work, you need to have a good understanding of what it is you want to achieve. This will help you narrow down the work that lies ahead, allowing you to work smarter, not harder.

Author bio: Aaron Chichioco is the chief content officer (CCO) and one of the web designers of Design Doxa. Aside from his expertise in web/mobile design and development, he also gained knowledge through years of experience in digital marketing, branding, customer service, eCommerce, and business management as well. For more information about Aaron, visit http://designdoxa.com/about-us/.