Competitor analysis & benchmarking success factors.
The purpose is to gain a level of insight that allows you to evolve your digital marketing strategy based on competitor insight. It's not that you should be dictated by what you learn about competitors, since being very reactive to that can be worse than doing nothing. Yet common sense tells us that knowledge is power - simply knowing how you compare, finding quick wins and defining your medium to long term strategy gives you more control and power.
A simple approach to competitor benchmarking
1. Select 1-3 direct competitors.
2. Identify out-of-sector or indirect competitors to gain ideas from beyond sector.
3. Create a table comparing competitors based on criteria you select relevant to your business or assignment, for example:
Reach: Backlink profile (Competitor search benchmarking tools), Social media engagement,
Act: 5 second test, Key customer journeys/top-tasks from home page, Audience segments appealed to, presence of landing pages, engagement devices/content used for lead-generation. Quality of content based on audite.
Convert: First time visitor options, communication of online value proposition, quality of checkout process.
Engage: Use of email (event-triggered and enewsletters), quality of engagement via social media and content marketing campaigns. Customer personalisation on site.
How can it go wrong?
Being unclear about what you are benchmarking and why - you need to have a purpose, why are you prepared to invest the time or expense, what is it that you want to improve.
Failing to not know what tools and resources that are out there is probably the biggest block, there are more and more free, trial-based or paid (but cheap) services these days, this was not the case 3 years ago - there's lots of choice so knowing what to use, and when, will save time and resources.
Remembering that benchmarking should be an ongoing process, not a task that you do once per year.
Thinking your online competitors are the same. For example when competing for traffic in Google, remember that publishers, blogs and affiliates are all competitors and you need a strategy to know how to work with or against each. As mentioned, it's also worth looking beyond directs for "out-of-sector" benchmarking if you want to be best in class.
Not linking to action. As with all situation analysis, if a report sits on your virtual shelf, it was a waste of time. You need to prioritse actions through a SWOT and then review whether your actions are working through reviewing the KPIs through analytics.
What is online competitor benchmarking?
Benchmarking, in the case of digital marketing, is best done as part of a larger framework for strategic planning (for example, using our RACE framework). Once all factors which affect the commercial performance of a company are identified, metrics can be defined for the key performance indicators (KPI's) of the industry or marketplace - these measures or "benchmarks" are then used to develop new initiatives for the marketing team to enhance its overall competitive position. Remember in this instance we're talking about digital marketing, in reality digital marketing is but one area for benchmarking yourself against the competition, it's not new and has been done for a long time in benchmarking products, logistics and manufacturing processes.
Key techniques for Competitor analysis & benchmarking
These are the related techniques which we recommend as important for managing Competitor analysis & benchmarking effectively:
Consumer buying behaviour
Customer research & analysis
Digital marketing laws
Macro environment analysis