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Why Conduct a Thorough Online Competitor Analysis?

competitor analysis - ELK Marketing

Before launching your next online advertising campaign, market research and competitor analysis can help you create a more effective search engine optimization strategy. You could become a sought-after online seller in your eCommerce marketplace by first identifying and then remaining aware of your competitors’ keyword strategies.

Whether your marketing strategy relies on blogs, videos, or social media posts, you’ll have a better idea of where to place them to drive customers to your site.

What’s in a Market Research & Competitive Analysis?

The premise of conducting market research and performing a competitor analysis is to identify your competition and learn the dynamics of their digital marketing strategies. An SEO market analysis makes it easier to determine the workings of your competitors’ successful online ad campaigns. By learning how your competitors use their most effective keywords to increase their websites’ inbound traffic volumes, you’ll know what products your customers search for and which ones they avoid.

The insights gained from learning how your competitors structured an effective digital presence to attract customers away from your products or services can help you make a needed turnaround. If you’re not driving enough traffic to your website, it likely resulted from your competitors successfully steering your potential customers to their websites and online stores.

A thorough market research and competitor analysis can remove a great deal of the bewilderment that could come about if you discover your inbound web traffic showed a significant drop-off. This could be a wake-up call to consider revamping your SEO strategy based on what you learn about your competitors’ activities. You can access a range of online tools that will help you see how your competitors configured their websites and URLs to appear higher in search result rankings.

You could find out what keywords or phrases they’re using in their page titles, headers, image tags, and meta descriptions to get noticed in the search engines. By incorporating the right product or service descriptions into your tags and SEO keyword campaign, you’ll have a better shot at appearing next to your competitors in the most popular search results.

How Can I Discover “The Secrets” Behind My Competitors’ Digital Campaigns?

The market research and competitive analysis tools designed to perform an SEO “reconnaissance mission” can reveal your competitors’ strongest search engine ranking strategies. Some analysis tools are also referred to as “spy tools.” Researching your competitors’ keywords, trending phrases, and website traffic patterns can show you how their ad campaigns stack up next to yours. If you’re hoping to improve your search rankings, try following what your competitors are doing and see how it affects your status in the search results.

By entering your competitors’ website URLs into a spy tool’s search box, you’ll gain insights regarding their keywords, incoming links, and backlinks. The incoming links are what customers are clicking on to find the products or services that they’re shopping for in Google, Bing, or other popular search engines. The backlinks could come from third-party blogs, news sites, or directory listings. Search engines and AI evaluate the popularity of these links when ranking websites in the search results. Consider adding your profile or contributing content to the same third-party “backlink sites” used by your competitors and create better backlinks to your website.

Who Are my Direct & Indirect Competitors?

Conducting market research on competitors involves more than “just” learning about your direct competitors. You’ll also benefit from what you learn about your indirect competitors. Your direct competitors essentially sell the same products or services that you do; their ads may target customers of the same demographics. When you know what your strongest direct competitors do to drive online traffic to their sites, you could follow suit and improve your search rankings.

You might think that your indirect competitors don’t compete with you. This is, however, far from the truth. You shouldn’t ignore your indirect competitors. Although your indirect competitors don’t use the same keywords as you do in their ad campaigns, they target the same customers that you’re focused on.

Market research and competitor analysis can reveal your indirect competitors’ online ad campaigns. If you follow your competitors’ campaigns, you could learn when or if they’re targeting your customers and offering them a better way to buy your products or services from them instead.

How Could I Find out About my Hidden Competitors?

competitive analysis - ELK Marketing

Many of your most valuable customers may not buy from your direct and indirect competitors. You may not know which of your hidden competitors is working against your best interests in an evolving and interconnected eCommerce marketplace. You probably have a sufficient degree of familiarity with a local competitor who offers the same products or services that you do, but only a comprehensive market competitive analysis can reveal your hidden competitors. It’s to your benefit to know about hidden competitors that operate online and have locations all across the world.

You may not have any knowledge of your worldwide competitors if your ad campaigns have only a target audience in your local area or across your home state. Do you know if there is a competitor in another state or country that offers the same products that you do? When you find out “who’s out there” offering the same products that you offer, you could check competitors’ websites to see if they provide free shipping. If they do, there’s a good chance that they’re pulling customers and potential purchasers away from your business.

Hidden competitors require ongoing monitoring, which you could accomplish by signing up to receive their new-product alerts and promotional-offer emails. You’ll need to track their online marketing campaigns if you intend to remain up to date on changes in their keywords or traffic volume. Your customers might turn to them as a replacement if your inventory is low or you need to increase your prices.

How Could a Competitive Analysis Help Bring In New Customers?

Because your competitors’ information is freely available over the internet, it’s not a difficult task to discover their digital content and marketing strategies. You may have wondered how they attract your customers to their website. Making regular visits to your competitors’ social media accounts will reveal who follows them online. It’s an easy way to find your competitors’ customers, who could then become yours.

By reviewing your competitors’ publicly available posts, you could determine their customers’ likes and preferences. Performing market research and competitor analysis regularly will enable you to create ads that can attract your competitors’ customers to your products or services.

Is a Competitor Analysis the Same as a SWOT Analysis?

A variety of digital tools are available to conduct market research on competitors. After you complete an analysis of your competitors’ keywords, websites, and online sales patterns, it’s time to turn your market research toward your own business by doing a SWOT analysis.

The SWOT acronym represents Strengths, Weaknesses, Opportunities, and Threats. While conducting market research and competitive analysis identifies how the other sellers attract your customers online, a SWOT analysis identifies your competitors’ strengths and weaknesses alongside your own.

Unlike the components of a market competitor analysis, the SWOT elements reflect both internal and external factors. The analysis will also reveal your business’s strengths and weaknesses. By determining your strengths, you can compare them to those of your most influential competitors.

The results of a SWOT analysis can lead to you asking important questions about your business. Is there something that you could improve to become as strong as your competitors? Perhaps you need to tweak your digital presence a bit or expand into a new market. If you discover that you’re stronger than your competitors, you may find you’re well-poised to take advantage of opportunities such as potential customers that your competitors may have overlooked. Flaws in your competitors’ marketing strategies could work to your competitive advantage.

A thorough analysis requires outlining both your business’s and your competitor’s weaknesses. The analysis can also show you the internal weaknesses that could influence your growth plans. Reviewing the dynamics and environmental factors affecting your marketplace will help you identify the areas where you could fall behind.

Overall, an honest appraisal of your weaknesses helps you identify issues that could prevent you from generating the sales revenue that you deserve.

When Should I Conduct a Competitor Analysis?

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Based on how often you launch new sales campaigns, you may consider conducting regular reviews of your market so you can remain up to date regarding factors that could affect it. You can maintain a better awareness of the dynamics in your market by reviewing your competitors’ latest ads. While many business owners perform a comprehensive deep dive at least once a year, you may fare better by breaking it down into seasons or yearly quarters.

If you advertise weekly, it’s in your best interests to conduct continuous reviews of your competitors’ ad activities. Marketing experts suggest performing daily research routines through Google Trends or monitoring your competitors as they update their social media profiles.

Some online sellers add several new blog posts a day to their social media to continually engage their followers. The practice can result in increased visits to their websites to buy products. Your business competition strategy could involve following your competitors’ daily social media habits and sending out your promotions when there’s a greater chance of diverting traffic to your product pages.

When Should I Conduct a SWOT Analysis?

According to the University of Kansas, you should conduct a SWOT analysis whenever you need to make changes to your business strategy. If, for example, you need to consider changing suppliers, a SWOT analysis could help you identify suitable manufacturers. Your research also helps you learn which companies your competitors source their raw materials from. By using better-quality ingredients to produce your goods, you could gain a market advantage.

Customer pain points indicate that your competitors have not helped them solve their problems. Because those customers have an unfulfilled need, they may be willing to pay more for your products. They could also be open to trying out your products because of a need that you promise to fulfill.

What Do I Need To Perform a SWOT Analysis?

A SWOT analysis requires input from several individuals who can meet as a group to review the four research areas. Use your favorite spreadsheet maker to create a worksheet layout that separates cells into each of the S-W-O-T headings. Next, input the businesses that you identified during your market competitive analysis. Because you may not yet know their strengths or weaknesses, you could leave the related cells blank.

When you know what your competitors charge for similar products or services, you could find ways to lower your costs and offer savings to attract their customers. You could also minimize any threats that your competitors might present to your online business activities.

Three Variables Used To Analyze Competition

After completing a SWOT analysis, you’re ready for the final phase of your research. This phase of your research involves reviewing how your competitors meet their customers’ needs. Your research could reveal the supply chain systems used and how well your competitors align themselves with the marketplace likes, preferences, and pain points.

When you learn what drives customers to buy from your competitors, you can adjust your marketing campaigns to attract them to your website.

Whether it’s a matter of keywords, backlinks, or blog posts, the following three variables can help you determine how to cultivate your sales process:

1. Supply Chain Issues

One of the most important variables to track is the supply chain, which reflects the route that products take to get into the hands of customers. This includes identifying the vendors, transportation companies, and warehouse or distribution centers that your competitors use.

Defining and evaluating the supply chain structure through your market research and competitor analysis will inform you regarding which competitors can deliver products quickly to your customers and those competitors cannot.

If, for example, your competitors have inventory readily available for shipping, they can advertise continuously and meet your customers’ product demands quickly. When competitors advertise certain items, it could reflect the fact that they have an abundance of product inventory stored in their warehouses.

This scenario could force you to lower your prices to move your unsold inventory. With strong demand for unavailable products, however, you could instead increase your profit margins.

2. Inventory Delivery Schedules

By monitoring your competitors’ keywords and online ad campaigns, you can uncover clues relating to how often they stock their warehouses with new inventory. Marketing the same products as yours, for example, could reveal that your competitors purchase goods in larger bulk quantities. If they have large warehouses at their disposal, it’s reasonable to assume that they tend to store product inventory until customers buy the items.

Some competitors may instead advertise their goods online, and then pay third-party suppliers to fulfill their orders. This could also show that a third-party enterprise processes the orders, package the goods, and then delivers them to customers. You could discover a weakness in this operational strategy through your competitors’ online reviews.

Complaints of late deliveries, out-of-stock items, or refunds may indicate that a competitor has supply chain problems.

3. Competitive Price Strategy

A thorough market research and competitive analysis show when and how often you could change your product prices and stay ahead of the pack. Investopedia notes that a competitive landscape pricing strategy tends to work when competitors sell similar products or services.

Online sellers can easily adjust their prices by logging into their eCommerce platform and clicking a few buttons. This also means that marketplace prices can change quickly between online competitors until they reach equilibrium. When you find that prices have remained constant, and you cannot adjust yours any further to outdo your competitors, the market’s supply and demand forces have successfully reached a state of economic equilibrium.

Equilibrium reflects a market condition in which the available products meet customers’ demands. During the period when market forces remain constant, you may not have much of an ability to leverage a unique selling competitive advantage. To outperform your competitors, you may need to offer new products or attract a previously untapped customer base.

Tracking the Three Variables

To help your business stay competitive, maintain and regularly update a spreadsheet that tracks any changes other online sellers make to their inventory and prices. Are their websites advertising a weekend or holiday promotion? Do their blogs or social media feature a hard-to-find expensive product?

Perhaps they’re emailing their customers’ time-delineated coupons to make purchases that will help meet end-of-the-quarter sales goals. You could sign up for their electronic newsletters or follow their social media accounts to learn about any new promotions or selling campaigns.

Are your competitors offering free shipping? What’s the minimum purchase amount for a customer’s order? You could also find out how far your competitors ship packages and which transportation services they use. The zip code of their warehouse or distribution center may reveal a location that matches the address of a third-party order-processing company. Determining whether a third-party enterprise processes orders for more than one online seller could help you predict when your competitors’ products will go out of stock.

Supply chain issues sometimes result from external factors such as hurricanes or earthquakes. Do your competitors have backup suppliers or delivery systems? Remaining aware of how developing external factors could affect your competitors’ customers can help you uncover problems that can either lead to a sales increase or serve as a warning signal of what you could expect.

Allocating Resources To Conduct Market Research & Competition Analyses

Modern online sellers have access to digital tools they can use to conduct market research and competitive analysis as often as needed. Combined with ongoing and smaller-scale SWOT analyses, you could stay on top of your competitors’ pricing and advertising while also remaining aware of developing market factors.

The amount of information you need to gather and process to stay ahead of the game, however, could prove somewhat overwhelming. If you have limited time and personnel allocation resources, we can help.

Contact Us at ELK Marketing to learn how we can conduct the required monitoring and market evaluation analyses that can keep your online enterprise on track for success. Don’t let your plans get derailed; let’s talk about your goals.

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