Competitor Analysis Definition & Importance

Competitor analysis in SEO is a method which can help you a lot to understand your competitor’s performance in Search Engine Result pages. You can easily outrank your competitors if you are good with competitor analysis. Competitive analysis is a key aspect which can help you to understand the performance key factors and create a SEO strategy for your business. It is most important for you to conduct a competitor analysis when you see your competitors are able to beat you in organic searches. Today I will be sharing information which can help you to understand the meaning of competitor analysis and some steps to conduct an analysis for your website.

What is Competitor Analysis

Competitor analysis in SEO is a method of analysing strengths and weaknesses of both current and potential business competitors. This analysis is useful to collect both an offensive and defensive strategic context to identify opportunities and threats. It gives you an option to identify your competitors and their strategies. As I said earlier, it is an essential component of business strategies. If you are in the market and aware about your competition, you can grow faster and market your product/services in competitive market else you have to face a lot of struggle.

Now let’s talk about the steps of performing competitor analysis. I have learnt few basic steps which I would like to share with you all.

Steps to build competitor analysis strategy

Step 1: Define the industry – Nature & scope of industry

When you are in a business, you need to understand the business industry and market area. Understand the market and focus on building audience. While doing research on industry market, you can analyse nature of audience and scope of your product. There are two ways to identify your business industry.

• First industry would be where the product already exists
• Second, where the product doesn’t exist but have potential audience for your product.

In case of a marketplace where product already exists, you don’t need to put a lot of efforts. But when you are working on potential industry, you need to understand every aspect of market.

Start looking for substitute products and their market area. For example, For movie theatres marketplace you can take the alternate audience of online entertainment platforms such as Amazon or Netflix.

Step 2: Determine who the competitors are

There are two types of competition for any business.

• Direct competition
• Indirect competition

Direct competition is when you saw similar product or services provider in market. You can easily determine those by doing simple market research.

But identifying indirect competition requires serious efforts. For example, if you have a restaurant which has Indian Food, then nearby restaurants would be your direct competition but food chains such as PizzaHut, Dominos, Subway and McDonalds would be your indirect competition. Although they are serving completely different food but can impact your business.

Step 3: Determine who the customers are and what benefits they expect

After getting the data on market and direct-indirect competitors, you need to understand your customer needs and their mind set towards your product or services. It can be done easily but conducting feedback sessions with product or services users. For this you can set up feedback or suggestions programs. It’s because, user opinion is a mix of positive and negative thoughts but always useful to build a better product.

Few additional steps you can follow:

• Analyse user behaviour on ad programs
• Understanding audience behaviour such as their age, gender, interest and demographics.
• Analyse your web performance and most importantly landing & exit pages.
• Track website events and site searches
• Keep a track on referrals & social media platforms. (It will help you to analyse and broaden your social presence in competitive market)

Step 4: Determine the key strengths

Key strengths are based on your product or services type. It could be price, service, convenience, inventory, etc. Compare the factors with competitors and do a competitor analysis on every aspect such as prices, services and product convenience and inventory. Product quality and prices could be a game changer for your business. Let’s take an example of TheSEOGuy. Being a SEO Strategist myself, whenever I deal with people who require digital marketing services from me, I prefer to give them quality services. Because I am dealing in digital marketing services and I don’t have any physical product. In this situation, I need to be sure about services quality.

Step 5: Rate each competitor on each of the key success factors

This is most important factor while doing competitor analysis. You need to understand the competition and rate each success factor i.e. SERP rank, product demand, audience behaviour and product market performance. Create a strategy to counter every aspect. You can only grow if you are ready to counter every key factor.

Few common key factors are:

• Background
• Financial Ratio
• Strength of brand portfolio
• Pricing (Discounts, and allowances)
• Corporate and marketing strategies

If you work on every aspect, you can get more key success factors to analyse.

So this was the information on Competitor analysis. Hope it would clear the concept of Competitive market analysis and help you to grow your brand.

However, if you have any feedback or suggestion for above listed information, then don’t hold yourself. You can comment below and share your valuable feedback here. You may also read about How to find out Competitor Backlinks with SEO tools.