Competitor analysis is usually based on data collected from different sources. Is social media one of them? Do you know how you compare against them?
We have seen that many companies overlook social media when doing competitor analysis. Social media is a giant pocket containing valuable data about your competitors that you might not find from anywhere else.
Social media platforms have become really crowded. It is predicted to have around 2.95 billion of active accounts by 2020, which is a third of the world’s population. We discuss about any topics in social media, making it an ideal new location to market your business and raise awareness. And your competitors are doing that too.
So, it is important that you monitor your competitors in social media. Here are 5 questions to help you evaluate your knowledge about your competitors. If you haven’t considered these before, you better start now.
1. Do you use social media as a reliable source of information for your competitor analysis?
Every company utilizes at least one social media platform nowadays to reach new audience, raise awareness, and provide quick customer support. If you are doing it, so are your competitors. And well, if your competitors are not utilizing social media platform yet, you have a competitive advantage now and an earlier start but rest assured, they will catch up.
Everyone knows how important competitor analysis is. It helps you grasp the big picture of what is currently happening in your industry and amongst all the competitors, and benchmark your performance against theirs. Competitor analysis also indicates strengths and weaknesses to help you shape your marketing strategy, and sharpen your message and the communication approach to stand out.
Social media is also a reliable place to collect data for market research. Content posted on your competitors' social pages, their audience's comments, feedbacks and even personal posts related to various brands can give you abundant insight.
However, social media data can be full of spams and noise, such as bots, internet trolls and irrelevant context. In order to conduct competitor analysis accurately and quickly, social analytics service should be used. High-end analytic services will filter out spam and noise for you so that you only use relevant data for your analysis. If you don’t clean the data before analyzing them, there is a high chance you will get distorted result, misleading your perception about the competitors, and formulating a marketing strategy that leads to disaster.
2. Did you know that knowing the trends in social media will save you from your industry's apocalypse?
Social media is always a hectic place. New trends emerge constantly. Monitoring your competitors' discussions in social media will make sure that you are not behind any trend. By knowing what trends your competitors are currently pursuing, you can adjust your marketing strategy to follow the trend before it is too late. If you use social analytics service, you can spot new trends emerging even before your competitors, giving you a competitive advantage.
Have you ever heard of "dying industry"?
Trends are usually derived from technological innovation and creative works, leading to something entirely new, changing people's purchasing habits and decisions. When technological innovation creates new trends and people’s behavior quickly, it might jeopardize the existence of an industry. For example, in the US, the "newspaper publishing" industry's annual revenue has sharply decreased from $29.30 billion (2012) to $23.70 billion (2017) because of the rise of digital newspaper and magazine, and "environment protection" trend. Knowing the expected decline in the next few years, many companies operating in this industry have changed to use digital version and application requiring a fee to read the full content. The "newspaper publishing" industry is dying, and if you haven’t changed your company’s processes and products in time, you will lose the game before you know it.
So, how do you know if your industry is dying? Social media will give you hints. You should constantly listen to what people are talking about and monitor what kind of activities your competitors are doing.
3. Does your competitor list include all types of competitors?
Startups and small enterprises use social media as their primary marketing channel to attract more people with little budget. A lot of creative and ambitious individuals have also begun introducing their niche products in social media. Some of them might be trying to take customers from you without you knowing about it at all.
For example, many individuals (or influencers) have tapped into the fitness industry by releasing their own fitness videos in social media. As followers started to increase in social media, these “iconic” figures have released apps with much smaller monthly fees to convert gym-lovers to app-lovers. I know some friends who stopped paying membership fees to Elixia gym and instead started watching these videos online to keep themselves in shape at home, instead of needing to go to a gym.
Although these people might hold little market share at first, you should consider them as serious threat because their creativity might create a sudden trend which can blow your brand off the game. No one can tell what is exactly coming, but you should always be aware of any protruding competitors.
Also, your competitor list should include both direct and indirect competitors. Unlike direct competitors, indirect competitors may produce "replaceable” or "inferior” products.
For example, instead of buying a wrist watch, people might buy mobile phones that display the time clearly and easily. Mobile phones will be replaced by wrist watches, endangering the wristwatch industry. Then there are companies that produce "inferior products" that tap into poor economic times. When times are tough, people will buy more potatoes than bread, because potatoes are cheaper.
Social media will give you a clearer and wider view of your potential competitors. But remember not to focus only on large enterprises or national/ global conglomerates, but to pay attention to emerging individuals.
4. Do you know how to leverage the information you get from your competitors in social media?
By watching closely what kind of messages your competitors are posting in social media, you can also make sure that you are saying or providing something better. If you see that your competitors have tapped into some emerging trend, you must follow or create a new trend of your own.
You should also watch out for the time when crisis hits your competitor. This could be in the form of their customers being annoyed with their customer service or some negative news related to the competitor. By leveraging the crisis information, you can post relevant information to the public to try to convert the competitor’s customers to become your customer.
This can be done by constantly doing sentiment analysis of your audience as well as of your competitors’. By comparing the sentiment of your audience, you will know whether you are on the right track compared to your competitors.
5. Do you use social media to increase sales revenue?
To get high conversion rate and sales revenue, you need to acquire more leads and retain as many customers as possible, and communication is the key here. Social media is an ideal channel because it contains different topics and attracts billions of people to join in the conversation.
How many likes, comments, shares or followers you get in social media reflects to your conversion rate and eventually to sales revenue. But these elements are not enough. These figures would be meaningless if you have no clue how your audience is reacting emotionally to your activities in social media. People will stop buying your products and services if they are annoyed with you, but they might come back when you make them happy again. Monitoring your competitors in social media also means listening to their audience's opinions and feelings, and when you see a right moment like if they are unhappy with your competitor for one reason or another, it’s time to modify your message to win their heart towards you. This may lead to increase in the conversion rate and sales revenue.
Hopefully these 5 questions made you stop and think about your current situation.
My goal here is to help you realize how important it is to monitor competitors in social media.
Since there are multiple and variations of competitors, you will save a lot of resources by utilizing social media analytics service for monitoring your competitors. Amongst the various tools and services that are available in the market, you should use one that can exclude irrelevant data and interpret complicated data, such as visual elements (videos, photos,etc), sarcasm, irony, and multiple languages. If you already have some sort of social analytics in place, read my recent blog on 7 reasons why you should re-evaluate your existing social analytics tool.