Why Competitive Intelligence Is A Must For Your Online Marketing Strategy
Many online marketers would sign up for 25% online growth within half a year. If you add that the competition is growing by 75% in the meantime, then they think twice. Increasing available information leads online marketers to a different perspective, and therefore different decisions. Strategic decisions can be crucial to the online success of a company. Competitive intelligence can play a role in such decisions. Also, ultimately improve online performance.
According to the English Wikipedia, competitive intelligence is “the action of defining, gathering, analyzing and distributing intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in strategic decision making”. That is a very broad definition. It is difficult to understand the essence of it. Then it is even more difficult for organizations to see the direct benefits.
That is why in this article I increase the understanding of the status, possibilities, advantages, and problems of the use of competitive intelligence in online marketing. The focus is on the piece of competitor intelligence: insight into what the competition does.
Competitive intelligence models
The Porter’s Five Forces Framework is a well-known example of competitive intelligence in business. This framework analyzes the competition in a market using five variables. These variables include ‘threat of new entrants’ and ‘bargaining power of buyers.’ Another example is the SWOT analysis. This involves looking at internal and external factors that can give direction to business operations. The factors also chart the potential for success.
But to use competitive intelligence in your organization, it is not necessary to apply a framework that is often complicated and time-consuming. A simpler and less theoretical example is comparing your prices with those of the competition. Alternatively, occasionally check their social media account to see what they are doing.
Competitive intelligence in online marketing
I have been working as an online marketing consultant for large companies in the Netherlands for several years. It strikes me that most companies have not (yet) integrated competitive intelligence in online marketing with their strategy. The same companies know how to use this kind of information in other parts of their company. And to base strategic choices on this. Think for example of the price. This makes it interesting to look at the underlying causes of the lack of competitive intelligence in online marketing.
One of the main reasons is the digital maturity of companies. Or the lack of it. Digital strategies are often conceived, implemented, monitored and evaluated by agencies. This can cause a lack of in-depth knowledge in the field of online within companies. Moreover, companies are often still busy with getting the basics in order. For example, creating a pleasant mobile experience for visitors. They want to keep up with the competition. Logically, they give priority to this kind of thing.
Another important reason is the relatively young industry, which is called online marketing. Business strategies and consultancy have been around for some time. They have now reached a high degree of maturity. Online marketing, on the other hand, is still relatively new. And therefore less developed. But in addition to a young industry, it is also a dynamic industry. The many and rapid developments require a lot of focus and time. This leaves less time to increase the understanding of the market.
Finally, the necessary data for competition analysis is often difficult to obtain. The data is also expensive and not always reliable. Even the data that is less difficult to obtain is widespread across different sources. It is therefore still time-consuming to generate and structurally monitor this. The required data and insights are simply not always available for companies. Bear in mind: “Competitive intelligence involves breaking out of established patterns to look at things in a different way”. The main reason for starting is that competitive intelligence offers a completely new perspective on your online performance. This perspective allows you to make smarter decisions. You do this on the basis of a more complete picture of the digital landscape. Other reasons are:
A world of possibilities
Few companies have integrated competitive intelligence into their online strategy and decision processes. That surprises me. How big the possibilities are, will, therefore, be a surprise for many colleagues.
There is (competition) data available with regard to website quality, SEO rankings, SEA budgets, number of display ads, app downloads, social engagement and even more interesting online metrics. Besides, it is possible to combine the available data in new KPIs. These give a more holistic view of the performance in a certain segment compared to the competition.
Enough reasons to start using competitive intelligence!
There are enough reasons to use competitive intelligence. Always keep in mind: “Competitive intelligence involves breaking out of established patterns in order to look at things in a different way”.
The main reason for starting is that competitive intelligence offers a completely new perspective in your online performance. This perspective allows you to make smarter decisions. You do this on the basis of a more complete picture of the digital landscape. Other reasons are:
- Benchmark your results: is 25% organic growth a good result if the market grows by 100% on average?
- Spot opportunities and threats on time: the competitor tries to enter market X. This is evident from weekly growing organic rankings in this market. How do we respond to this?
- Learn from successes and failures: we have seen a significant increase in social media followers at competitor X through campaign Y. What made this campaign so successful and what can we learn from this?
- Deal with an information overload: focus on the most important KPIs and benchmark them against the competition. Then you prevent an irresponsible focus on irrelevant and isolated metrics.
- Audit your media and / or online office: we have spent much money on strategic advice in recent years. What is this really different from the results that our agency shows us? Are we doing really well compared to others?
- Stimulate your innovative side: research shows that an improved understanding of what is happening in the market has a positive influence on the innovativeness of organizations.
- Take advantage of competitive advantage: the use of competitor intelligence is not yet widespread in the online marketing industry. Adoption can, therefore, lead to a competitive advantage. You will then work with data that is not available to competitors.
Through competitive intelligence, companies suddenly have a wealth of competitive data. It is possible that they focus too much on this. That can be limiting. For example, the unique character of the company or brand.
Besides, metrics do not always tell the whole story. This is especially true if they are isolated. Suppose your main competitor has 25% more followers across all social media platforms. Then it seems like they perform better in this segment. But what if your followers have a 200% higher commitment? Then you can still say that your social performance is better. Despite the fact that this did not seem to be the case based on the most important KPI.
Start with competitive intelligence in your company
The beginning is the easy part. You start by regularly viewing websites and social media accounts of your competition. There are also practical tools such as Google Alerts. Google Alerts provides you with updates. If competitors are appointed on the internet, you will receive a notification. That offers valuable insights.
Competitive intelligence tools
Performing competitive intelligence properly and completely is more difficult. There are currently several solutions on the market. Each and every one of them helps companies to make better decisions based on competitive data. Important aspects of selecting the right tools are the reliability of the data, to what extent it is real-time, whether trend data is available and how complete the data is.
A social-only tool is a good start. A tool that provides insight into different channels is more useful. This creates a more holistic image. Combining KPIs in strategic metrics can also help to clarify your position in the online landscape.
Do you already have experience with competitive intelligence? I will gladly read your story below.