In a 1996 interview, Steve Jobs told an interviewer, “Picasso had a saying: ‘Good artists copy; great artists steal.’ And we have always been shameless about stealing great ideas.” It’s good advice for marketers: Watch what your competitors are doing and then try to do it better.
You doubtless have a marketer’s keen focus on your website’s statistics; but how much do you know about your competitors’ Web stats? What are they doing right now – in social media, search, and advertising – and how is it working? Are they grabbing audience away from you? If so, what should you be doing about it?
Competitive intelligence analytics tools can help you answer all these questions. They let you benchmark your own efforts and results against successful companies like yours. Even more important, competitive intelligence analytics can help you identify which of their strategies to adopt and which ones aren’t worth the effort.
How Do You Stack Up?
At a minimum, competitive intelligence tools let you see how your site traffic and traffic sources stack up against others in your sector. For example, Google Analytics lets you see how your site traffic compares to a broad, anonymous group of other sites. More robust tools allow you to choose which sites to look at and to drill down into the data for each one. The most fully featured tools also allow you to see how a competitor’s metrics have changed over time.
Competitive analytics provide five key types of intelligence:
Benchmarking. Competitive analytics helps you identify market leaders and then compare different metrics to theirs in order to see where there’s opportunity to improve. Comparing metrics such as the number of inbound links to a website or the proportion of site traffic coming from social media can tell you whether you’re investing enough time and money there. Even if you are the market leader, understanding your competition can help you stay ahead of the curve.
Context for your own metrics: You know your own metrics, but, so what? Simple trend stats don’t tell you whether good is good enough. Nor do they help you understand performance-based metrics. For example, you see that one of your pages has a 36 percent bounce rate. Should you be alarmed, or is that actually an acceptable rate? Using competitive intelligence analytics, you can see that this bounce rate is in line with that of your leading competitor; that’s one thing you don’t have to worry about right now. Or, you see that 3 percent of your traffic comes from social media. Should you pat yourself on the back or get to tweeting? If your analysis shows that your top competitor is getting 6 percent of its traffic from social media, you know what you should do.
Insight into industry trends: Do you know whether your recent performance is due to actions you took or a result of forces impacting your industry as a whole? In a site comparison, you can view the traffic trends for the sites in your industry side by side. For example, are you selling more snow shovels because you upped your search spend or because it’s snowing, so everyone is selling more of them? If all the sites in your industry got a lift in traffic at the same time, for example, you’re benefitting from an industry trend – not your spend.
Info on successful tactics: Competitive analytics helps you identify successful strategies employed by market leaders. For example, fully featured tools let you identify the specific paid and organic keywords that drive the most traffic to competitive websites. You can see the other ways that competitors are gaining traffic and pinpoint the most successful ones. You can even obtain a list of their inbound links and determine which of those are referring the most traffic.
Alerts to changes: If your competitors receive an increase in traffic or get a sudden boost from a new channel, you should know about it immediately, so that you can counterattack. By looking at daily updates of traffic information, you can quickly respond to changes in your competition’s strategy.
Putting Competitive Intelligence to Work
These five kinds of competitive intelligence can help you respond to changes in the competitive landscape. Even more important, competitive intelligence can improve the accountability of your own marketing via deeper insights into how well your competitors’ efforts are actually working and where you should focus your own efforts.
Let’s take the example of an online pet supplies company. With their old analytics service, the marketing team could tell that a major competitor was suddenly attracting significantly more traffic. That was a problem – but the bigger problem was that they didn’t know why, so they couldn’t take appropriate action.
Using Alexa’s analytics, they were quickly able to determine that their competitor was investing heavily in Facebook advertising. Through an ongoing series of promotions, the competitor had rapidly built a very large Facebook following and was stoking the fires of that by posting relevant content on Facebook almost hourly. This seemed to be paying off: Its Facebook page had almost 50 times the number of likes and shares than other retailers in the category. Not surprisingly, this led to a huge increase in new traffic to its website.
Our vendor of pet supplies could simply have countered with its own Facebook campaign, aiming to divert some of that traffic. But was that the right move?
While having a strong Facebook presence has significant benefits in its own right for many businesses, the answer is far more nuanced. If the competitor was only selling loss-leader and low-margin products as a result of the Facebook campaign, without getting multiple purchases or customer loyalty, copying them might not be worth the effort.
Looking at the engagement metrics for the competitor’s site revealed a great deal about the effectiveness of the campaign. Pageviews per user were much lower, and the bounce rate was much higher after running the Facebook campaign. Meanwhile, time on site per user remained almost on par with other vendors in the category.
The most likely hypothesis was that increased traffic to the competitor’s site was based on special offers for single products, and that those visitors were not browsing for or purchasing multiple products.
If that’s the case, our pet supplies vendor should take a different approach that rewards customer loyalty. The marketing team can easily test this hypothesis and measure the results for their own business.
What’s in It for Marketers?
Competitive intelligence analytics can take marketers beyond “what’s happening.” It answers two more important questions: “Why is it happening, and what should I do about it?” The best competitive analytics tools allow marketers to identify their top competitors and see actual statistics about competitors’ performance. Marrying competitive intelligence with robust website metrics allows you to bridge the gap between measurement and marketing accountability – without wasting a lot of time or money.
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