“Without big data analytics, companies are blind and deaf, wandering out onto the Web like deer on a freeway.”
– Geoffrey Moore, Author of Crossing the Chasm & Inside the Tornado
Let’s be real. In this metaphorical quote, you’re the deer, your industry is the freeway, and those cars coming head on are your competitors. In no world would you ever allow your company to wander blindly unaware and unprepared into the middle of any highly competitive market.
Herein lies the importance of competitive analysis. In any competitive market, accurate strategic insight can be the difference between being ahead and being left behind. It’s relatively easy to identify broad trends in the marketplace. However, competitive analytics allow you to go deeper, answering highly targeted and specific questions in the context of your unique competitive set.
After all, metrics don’t exist in a bubble. The true power of metrics lies in the context that envelops it and the comparative trends that tie singular metrics together.
The majority of companies already use on-site analytics to measure site traffic, referrals, bounce rate, etc. On-site analytics are important to observe for an accurate picture of how people interact with your site. Arguably, it’s the core of web analytics. It’s the most basic way to quantitatively measure performance, allowing you to then make judgments about your content, brand value, and potential audience.
While on-site analytics are undeniably important, it doesn’t answer a fundamental question:
How do I beat my competitors?
Competitive analytics picks up where on-site analytics leaves off by providing context, enabling you to benchmark your performance relative to your unique competitive set.
Competitive analytics answers 4 of your most critical business questions.
1. How do I stack up relative to my competition?
At the end of the day, you want to know where your business stands relative to the players that really matter. Essentially, where are you in the race? Benchmarking with competitive analysis tools allows you to identify market leaders and industry trends to determine what ideal performance should look like. For example, if you’re seeing a 70% bounce rate on your site and the average among your top 3 competitors is 60%, you should probably consider enhancing your site’s usability, layout, and/or minimizing page load time.
2. What are my competitors doing to succeed?
Emulation is not always the ideal strategic approach – you don’t want to just copy your competition and hope for the best. However, it is beneficial to stay abreast of the strategic changes (in real time) that have been successful for your competitors so you can identify gaps in your own strategy. For example, if your competitor is investing heavily in mobile and seeing great referring results, it’s not a bad idea to spend extra time evaluating the mobile market and how your own traffic could be affected. You may find that this is an area that you haven’t fully exploited and choose to invest more heavily in it. Industry trends and customer needs are always changing. It’s crucial to keep your own ear to the ground, but always observe your competitors. They may hear something you don’t.
3. What should I do next?
With the barrage of data we filter through on a daily basis, it can be difficult to decipher what numbers are important and which correlations are meaningful. But ultimately, you need to know your next move. With Alexa’s SEO audit tool we provide specific instructions and actionable recommendations for how to optimize your discoverability, drive traffic, and ultimately convert customers. At the end of the day, you need a playbook that makes you confident in your next step.
4. Is my strategy working?
This is the true test. Are you seeing results? After all the analyzing, agonizing, planning, and implementing, you need measurement tools that will track 100% of your real results. Here we reunite with our accurate on-site analytics. With Certified Site Metrics you can challenge and validate assumptions made based on real results, evaluating your success so your strategy is always optimized and your budget well spent.
Taken in sequence, these questions become a cyclical approach to your strategic thinking. Ask. Answer. Act. Repeat.
You should always walk away from your analytics with actionable insights that will drive measurable results in your strategy.
Competitive analytics provide the context you need to interpret your data in a way that is meaningful and relevant to your business in its unique competitive set. Because at the end of the day, data is most powerful when asked:
Compared to what?
