Competitive Intelligence Analysis: Metrics, Tips & Best Practices

The post on Monday was titled: Competitive Intelligence Analysis: Why, What & How to Choose. This post takes a few steps deeper into the world of competitive intelligence with best practice recommendations for analysis, metrics that you should report on and traps you can avoid.

Hopefully this will be helpful in focusing our valuable energies and produce impactful actionable insights.

If you have not had a chance to read the other post I recommend it as foundational material for this one.

Two suggestions for things Not to do:

1) Conversion Rate: The instant tendency for anyone, especially Senior Management, is to ask for the competitor’s conversion rate and compare it to their own. Usually this is a huge waste of time for the following reasons:

• Even companies who are in exactly the same business have radically different business strategies when it comes to the web. For example you could be driving all the sales via the web channel to the detriment of other channels while your competitor could have a more holistic web, retail and phone strategy. So if you compare conversion rates you are really comparing apples and mosquitoes. 

  [Think of Best Buy and Circuit City, two electronics power houses. You might think they are in the same business in reality whether in their retail stores or on their websites they execute such radically different strategies that even if you knew what their web conversion rates were it would give you very little insight that you could exploit to your advantage.]

• It is a classic “so what” situation. Let’s say your conversion rate is 90% and your competitor is 9%, what would you do? What if it were vice versa? Would you change your fundamental business strategy? Would it really matter?

I am quite honest in my opinion that even for our websites we should not obsess too much about conversion rate. For reasons in that post and the ones above in doing competitive analysis conversion rate has the potential to be nothing but a distraction. Usually. YMMV. : )

2) Pages / Content Viewed: This one is tricky. It seems logical that you would want to know the pages that visitors are viewing on your website and pages they are viewing on your competitor’s website. Common Question: How many visitors are viewing the “product detail” pages on their site compared to ours? Here are some reasons why this could be a sub optimal use of time:

• Any data you need for this comparison will be deeply customized because, sadly :), no two sites follow the same structure for content (and it changes all the time). One example, here are two pages for the exact same product:
  http://www.circuitcity.com/ssm/Sony-Cyber-shot-DSC-H2-Digital-Camera/sem/rpsm/oid/149326/catOid/-13062/rpem/ccd/productDetail.do
  http://www.bestbuy.com/site/olspage.jsp?skuId=7698896&type=product&id=1138084657346
  In order for your reporting to be accurate you would have to put in massive effort to ensure that what you are calling Product Page here is the same as Product Page there.
• Attributing intent to a page view is quite a stretch, if you see this and the purpose of this page is that then you must be trying to do z. This throws a kink in the content viewed analysis.
• This is another example of the “so what” situation. Stress test deeply the answer to that question before plunging into this analysis.

Tips & Best Practices on what you Can do:

The most delightful use of Competitive Intelligence data is in understanding what is happening on the demand generation side (acquisition), post site visit analysis, deep search analysis and comparison and in identifying new targets for marketing relationships. Specifically……

1) Share of Visits by “Industry” Segment: This is what we start the game with. Either for an industry segment (say Software – Technology) measure what is the share of traffic that you are getting. It should show you at a quick glance who the big boys and girls are in your segment that you are fighting with.

I also recommend one more drill down on this report. Create Share of Visits by Custom Segment. This allows you to plonk in your core competitors (as defined by you) into the tool and measure what share of visits you have on your own turf. This is where you’ll see if you are really dominating or your competitors are kicking your butt.

As always remember to trend over time to get a real good feel for how you are doing.

2) “Upstream and Downstream” Traffic against Competition: Referring URL’s in your web analytics tools report give you something, but usually 50% of referrers are blank. I love this report because you type in your url into HitWise (or whatever you use) and it will tell you what sites people were before they come to your site. Some will overlap with your referring urls report. But most won’t and this helps you fill in some of the gaps.

This also gives you a great feel for “mindset”, if you have a small cluster of sites people see before they come to you there is some inference you can make for customer intent. More than that “upstream” sites for your competitors helps you identify who they are doing business with that you are not (nice!).

ClickTracks gives us Exit Tracking, so if people click on our site to go to another it reports that (with zero development work on the website). But we want to know where people go after they visit the site, even if they did not click on an exit link. The “downstream” report will tell you that. For example how many people visit your competitor after they go to your website? How many people go to Google from your website because they can’t find what they are looking for?

3) Share of Search: The latest stats indicate that roughly 80% (!!) of the traffic on the web starts at a search engine. This is a great report to run for the % of traffic you are getting from the major search engines against your core competitors.

My tip would be correlate this with any efforts you might have expended in the critical area of search engine optimization (SEO) to see if your changes are helping. Typically you can measure this with your own analytics tool. Where a competitive tool is important is that it will give you context if the general web trend for search in your category is up and you are just riding that wave or if both you and your competitor are up at the same time or if you really benefited from SEO and are now beating your competitor.

4) Share of Brand and Category Key Phrases: Now you are cooking. Start with brand key phrases because they are most of your search traffic any ways. A quick report for your top brand key phrases will tell you what share of traffic you are getting for coca-cola vs your competitors or, more likely, your affiliates or other retailers.

But perhaps the most amount of value comes from doing a report on your top category (non-branded) key terms (for example “digital camera”). This is where you really have an opportunity to gain a strategic advantage against your competitors because the theory is that category key terms are “entry points” into the consideration process and if you can capture the visitor early, you could get mind share and convert them (at that point or later in the consideration process).

5) Discovery of new Search Key Phrases: Most often we are limited by what we know. Competitive analysis tools are great for keyword discovery (great complement to any strategy you have for keyword generation or building the long tail).

In our friendly neighborhood competitive intelligence tool I look for keywords driving traffic to your competitors, to your overall industry segment or your partners. There is a quick little optimization exercise waiting to happen as you diff the keywords that you already have vs those your intelligence report provides you with.

One recommendation here is to be creative here as you define your competition and “industry”, cast a wider net. For example if you are selling coca-cola your “competition” for keywords is not just Pepsi but also Target.

6) Traffic by “Media Mix”: This is a great HitWise report (perhaps also in ComScore, pardon my ignorance). I like it because I am such a fan of segmentation. This report will show you your “media mix” vs your competition. Media Mix is defined as the core streams of traffic to your site as defined by “Email” (so potentially your Direct Marketing), Affiliate, Search and Direct/Other.

This report is insightful because it is a peek into the acquisition strategy of your competitor, something you would have a hard time getting otherwise.

Is the media mix for your competitors the same as yours? Very different? Should it be the same? Who are their core affiliate sites that are driving traffic to them? Should you go after them as well and have a relationship? Perhaps an alternative affiliate network? How about DM, now that you know how efficiently (or not) they are using email what should be your strategy?

These are very complex questions that you can’t even begin to answer normally. But with competitive intelligence you can start that journey. Even one adaption of strategy based on this data could be worth hundreds of thousands of dollars. So it is complex but the payoff is huge.

7) Psychographic Analysis: Fantastic way to identify new options for marketing, advertising or simply link building. Tools such as HitWise have integrated PRIZM data into the weblog / IP information allowing them to integrate lifestyle, personality, household income data for us to mine.

Examples of Prizm clusters are: Upper Crust, College Student, Digital Hopefuls, Handshakers, Techno Strivers, Gadget Grabbers (i think this is me : )), and the methodology assigns one single cluster value to everyone in a zip+4 code. The system is getting even more advanced now where it can get down to a street level (scary!! : )).

Marrying this data with IP data with website browsing behavior allows you to go really deep in understanding the internet behavior of segments of populations you might want to target.

So you can do things like, you are interested in the Techno Strivers (they are up and coming believers in technology for career advancement) then your competitive analysis tool will tell you most likely what zip codes these folks are in, what websites they browse and have have a short list of websites you want to establish relationships with to target these much coveted folks.

Or maybe you want Upper Crust (affluent, older white and Asian suburban couples), and on and on.

Often we partner with websites knowing only the most superficial data about their visitors. Here is a great alternative where you can start from ground up (identifying your customers) and then building your web marketing and advertising relationships from the ground up.

Competitive intelligence analysis is a tough game. The good news is that this is very far from “daily reporting”. It is more intense and focussed effort and it truly is analysis. Not every company will be ready to leverage all seven of the above recommendations (or even more options that you’ll find).

I encourage a very honest self critical analysis of your own abilities to action this data before you go buy a tool, although it might be obvious from this post the upside is literally huge sums of money and a strategic advantage that will influence your fundamental business strategy in a very positive way.

Please share your own recommendations and feedback via comments.

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PS: Hello from San Diego, California. I love going to Sea World, hence a picture of “Shamu” on this post.