Understanding Your Audience Part 2 – Competitor Analysis
Building on yesterday’s post, “Understanding Your Audience”, I will now delve into competitor analysis, and how this ties in to understanding your audience, and learning from those who have already invested time and money into understanding theirs.
To be a successful person, you need to expose yourself to different ideas and perspectives and never stop learning! This means taking note of what other successful people are doing, including learning from your successful competitors. It doesn’t mean that you should simply copy someone’s strategy – I see too many people try to replicate other people’s successes instead of understanding what got them there and applying it to their own business.
What works for my business may not necessarily work for yours. As I said in my previous post, the only way to replicate my success without any hard work on your end would be to hand you the keys to my business – and that’s not gonna happen. 😜
In your social interactions, you can learn from and emulate people you respect, but you cannot be them. You have to be you. The same goes with your business.
Before we dive into it, another important point has to be made – you need to know who to learn from. You want to learn from successful people, not from people who make a lot of noise but deep down are insecure little people. You want to learn from your successful competitors, and not guys that are spending 5 figures or more on marketing but not making money. (screenshots never tell you how much profit was made..) This means that your first step is figuring out which competitors are worth looking into – which stores are worth taking inspiration from.
There are many methods and tools out there which people promote when it comes to analyzing your competition. Some work. Some don’t. The majority are focusing on what is best selling, and hoping it will sell wonderfully for them too – this is a critical mistake, because your business is not that business.
In the interest of keeping this post to the point and not overly technical, I will share one of the main strategies that I use and explain the thought process behind it in simple terms.
So let’s get started!
First and foremost, go to Google’s Chrome Extension Store, and get the extension “Similarweb”.
Now start looking for competitors on Google, Ebay, Amazon, Etsy, and more. Be creative. Don’t be lazy. A reason for looking on Ebay and other marketplaces is that some people with successful ecommerce businesses will have a store on one of those marketplaces, and a separate store on their own domain. This tactic has been used for many years, as people try cut down the fees and increase their margins. On the flip side, having a large store on a marketplace is a good way to catch new customers which you might otherwise miss out on. I personally prefer having everything controlled by myself on my own domain, but that is a discussion for another time…
The point is, find those stores (not on the marketplaces, as your store is not going to be an ebay store for example), and perform initial analysis using the Similarweb chrome extension. This gives you a lot of information on how much traffic they receive and the quality of their traffic.
Off the bat, you should really only focus on the Engagement section:
– How many visits they receive monthly
– Average visit duration
– Pages per visit
– Bounce rate
Open an excel sheet and list each and every competitor in your niche, one under the other, with 4 additional columns detailing the engagement figures I listed above.
You will start seeing that some competitors, regardless of the amount of traffic they receive monthly, will have higher average visit duration and more pages per visit. This shows higher engagement, as a shop that has an average 4 pages per visit and 2.x minutes on site, is much more likely to have sales than a shop that has an average 1.x pages per visit and 15 seconds on site. It’s just a question of statistics and what is realistic.
Bounce rate is an indication of how many people close the website without clicking on any other pages. The higher it is, the more likely the offer that enticed the person to click was not backed up by a converting landing page/product page/website. The higher the bounce rate, the more work you or the store in question has in front of them. Sometimes though, it may even be a technical issue that is causing a wonderful website/store to chase away people who click on the ad – be it a slow loading website, poorly optimized for mobile, or a rogue app that causes bugs on the store.
Always make sure to test the customer experience on your store to catch these things!
I list the amount of visits per month last on purpose. Seeing a store doing 100k visits is not an indication that they are selling!!!! Very often you will see the same store dropping to below 5k traffic a few months down the line if they are not converting. However, if you see a store has something like 1,000 visits or less, and they aren’t really increasing by month, it’s best to ignore that store – the bounce rate, and visit duration might be high because they are working on the store. That being said, people driving 5 figure traffic and above are usually spending money on ads, so take note and use the other metrics to understand if it is worth looking into further.
At this point, when you have a list of competing stores that are worth looking at, you want to dive deeper into the analytics to see what kind of audience is coming to your competitor’s stores, what sources of traffic they are using, and see if they are using any backlinks that might be relevant to your own store – perhaps a certain online magazine is bringing tons of traffic to your competitor – you might want to hit them up and see how your store can get a shoutout as well.
I’ve seen stores make bank with FB ads, but fail in other marketing channels. I’ve seen stores fail on FB but make bank on Adwords or Instagram, or a combination of channels. You can obviously (and you really should try to) market on all channels, but some products and some audiences simply work better on some marketing channels as opposed to others. Learn how to run ads on native, play with solo ads, and try new things. Don’t rely on one single marketing channel, because when something happens (ad account blocked, payment rejected, BUGS, etc) you will be crying when your income stream is completely halted. Always diversify, not only to scale, but to safeguard the momentum of your store.
So at this point, once you have gathered your initial list of stores following my method, let’s get to business by registering with the following three tools:
www.similarweb.com – it costs $199 per month, but the free demo is more than enough
www.alexa.com – it costs $149 per month, but you can get a 7 day trial for free
www.semrush.com – it costs $99.90 per month, but you get 10 free searches per day per email
You may think that too many sources of information is redundant, but I believe in getting as much information as possible from as many sources as possible in order to catch small things that most would otherwise miss.
Data is your friend. The more data you gather, store, and analyze, the stronger your business will be; the better your understanding of the market and potential opportunities and risks will be.
Starting out, you don’t need to pay for any of these tools. You can gather enough data with their free packages – just be sure to cancel Alexa before 7 days are up or they will charge you! If you can afford it though, go for it. More data is always better. 🙂
The reason for registering with Similarweb even though you already have the extension, is so that you can go to their pro.similarweb.com portal and see more data. The free demo (it has no expiration) will give you plenty data for the past 3 months, which you cannot see on the extension. I personally use the extension only to see at a glance if a website is performing or not.
Alexa will give you data for a much longer period of time, but you are restricted to 7 days before you are charged. For your initial research, you won’t be needing more than this. And moving forward, the Similarweb demo will be enough for your spontaneous searches. That being said, your initial research has to be as in depth as possible – whatever work you put in today, will go a long way moving forward.
You may know SEMRush as a keyword analyzing tool, but it does so much more than that. Even if you don’t plan on running any Adwords campaigns, I would recommend following the next steps on all 3 tools, including SEMRush. You will see why soon enough.
Now if you thought that your hunt for other potential competitors was over, you are wrong! Take a sip of water, stretch, take a deep breath, and get ready to go into the matrix.
On Similarweb – you can find potential competitors under Audience Interests. If you have the spare cash, I would upgrade to unlock the full list.
On Alexa – you can use the Audience Overlap tool or “Sites related to xxx” under Site Overview to find potential competitors.
On SEMRush – Look at the Main Organic Competitors and Main Paid Competitors.
Use the metrics I detailed above to filter the good competitors from the bad and add to your excel sheet.
Now that you have a good list of quality competitors, you can start gleaning plenty valuable information from all 3 tools, including but definitely not limited to:
- Demographics – What age group, gender, ethnicity, and income group make up your competitor’s main audience?
- Geography – Which countries are your competitors targeting?
- Device – Mobile? Desktop? Nokia 3310? Which device is converting best for this audience?
- Traffic Source – Where is your competitor pushing ads? Perhaps this gives you a hint on where to start pushing ads? Or perhaps you can target channels that are untouched by your competition?
- What keywords are your competitors getting traffic from? Whether organic or paid, it gives you an idea of your audience’s interests and could even help with your Facebook interests targeting.
- Referring Domains and Backlinks – Delve deeper into your competitor’s marketing strategy to figure out how to take your marketing to the next level. What kind of websites and content appeal to your audience?
- Landing Pages & Ads – I am against doing this, because people tend to want to just “copy what works”, but you can get insights on the type of language and imagery that appeals to your audience.
I could probably write a book on all the technical aspects of analyzing your competitors, but that would not be helpful at this point. In any business, just like in construction, you have to build a strong foundation, adding layer by layer in a methodical way, ensuring you can build a skyscraper of a business that will not crumble under the weight. It also means that you cannot begin building the penthouse before you build everything that comes below it.
Use this data to inspire yourself, and never stop testing! If you are stuck, you can try what seems to be working for your competitors. If that doesn’t work for you, do what they aren’t doing; at least you will have less competition there. Be creative!
If you have done your audience research properly up until the competitor analysis, a lot of what you will discover here will make sense, and you will start understanding how to connect all the moving parts to develop a marketing strategy that will work for YOUR business or store!
I hope this helped and that it was simple enough to follow. Let me know if you have any questions.