In This Chapter

• Getting to know your competition
• Figuring out the real competition
• Knowing your strengths and weaknesses
• Looking at conversion in a competitive market
• Discovering the difference between conversion and traffic

As with any business, you need to know what you’re up against. Knowing who your competition is and figuring out how to beat them are the hallmarks of good business planning. Online businesses are like any business in that regard, but online and traditional businesses have some slight differences in how you build a competitive strategy, especially when it comes to search engine optimization.

In this chapter, we discuss how to figure out who your competition is and how to make their strengths and weaknesses work for you. You figure out how to research who your competitors are for the coveted top search engine rankings. Also, your competition in the brick-and-mortar world might not be the same as your competitors online. Finally, it's one thing to know your competition; it’s another to put that information to use. Not to worry: We’ve got you covered in this chapter.

Getting to Know the Competition

With any business, you want to feel out the market. Whom are you competing with, and how are they doing? This is important because it gives you an idea of how to run your own business. If others are succeeding in your market space, they’re doing something right. You also need to know what other people are doing wrong so that you can capitalize on that and avoid their mistakes.

Say that your business is customizing classic cars. You restore, repaint, and rev up any old model American car. To figure out your competition, sit down and think about the kind of competitors you think would be in your market. Who is your competition? Other classic car customization places. Other people who do paint and body work. Other businesses that offer simple customization services. Write them all down, even ones you think would be only loosely connected. Figure 1-1 is a brainstorming graph of your business and what you do that links your competition to you.

Research all these other companies and consider the following questions about these areas of their businesses:

• Tactics: How do they advertise?
• Similarities: What services do they offer that are similar to yours?
• Differences: What services do they offer that are different?
• Success rate: Do they get more or less business than you?
• Opportunities: What are some of the things they are doing that you could be doing, too?

This approach is a good way to start market research. You also need to remember to continue doing this because businesses, and especially Internet businesses, are subject to changing their tactics and offerings. Every market differs, but you probably want to do a review of your competitors four to six times a year.

The other important thing to keep in mind about researching your competition using the search engines is just how much a search engine’s results can differ in a day. And because different search engines use different algorithms, the page Google ranks number one — say, [classic car customization] — could be in an entirely different position over on Yahoo and in yet another position for Bing. You have no guarantee that all three engines even have the same page indexed.

Another problem is that sometimes a spider has not crawled a page in the index for more than two weeks (or longer). Although two weeks is not a long time to us, in those two weeks, that website could have been taken offline, been completely redone to reflect changes in the business, or had screwy code attached to attain a higher rank for the site. Search engines are not infallible, so it’s best to continue to research the competition often to maintain the most up-to-date information possible.

Also, the playing field changes between the brick-and-mortar world and the online business world, so make a list and check it multiple times. Just because you have a cross-town rival for your business doesn't mean that he's online or that you won't have other competitors to worry about. In the real world, you see competitors coming. Online, they appear from nowhere. You have to be vigilant.

Figuring Out the Real Competition

Part of knowing whom you’re competing against is knowing who is actually drawing the customers you want and who is just limping along, especially when it comes to search engine optimization. Who you think your competition should be and who actually pops up on those search results pages are sometimes two completely different things.

Doing a quick search on Google for your business’s keywords (the words people use when doing a search) might turn up those that you think of as your competition, as well as others that are completely out of the blue. Book II tells you how to pull together a keyword list that gives you a good starting point for finding your competition. Take a typical search, as in Figure 1-2, which shows the SERP (search engine results page) for [classic car customization].

The search results page yields a mixture of listings for websites related to the search term:

• Classic car classifieds
• Customization and restoration businesses
• Classic car magazines
• Videos from classic car shows

Note the different types of businesses. Are they what you’d thought they’d be? These sites represent the true competition in the search engine world for [classic car customization] because they’re ranking high for those keywords. Try out other, more specialized keywords as well, and make note of who’s ranking for them. Are they actual classic-car-related businesses like our example? Or are they something that’s only tangentially related to classic car customization?

Another good idea is to do a search for your actual business name to see if your brand is ranking. If you don’t occupy the number one position for your business name, find out who does and what they’re doing to rank higher. Because if they’ve got the spot you want, by using your name, they’re obviously doing something right.

For example, going back to your car customization business, say that your biggest competitor in your hometown is Bob’s Customized Classics. Bob is everywhere you look. He’s got print ads, he’s got billboards, and he’s got a really annoying commercial. He markets himself very well. But when you go online and do an online search for your keywords [classic car customization], Bob is nowhere to be found. In fact, you find out that Bob doesn’t even have a website! What you see ranking number one for your most important keyword phrase is Motormouth Mabel’s Classic Car Boutique down in Boca Raton.

Mabel’s website is gorgeous. It has an SEO-friendly design, is full of spiderable content, doesn’t have Flash, and contains plenty of high-quality links — it's even optimized for mobile devices (read more about mobile optimization in Book IV, Chapter 3). Mabel, not Bob, is your real competition when it comes to the Internet because when people do a search in the search engines, they’re going to go to her instead of Bob. So although Bob is your competition in the brick-and-mortar world of your hometown, Mabel’s the one you need to be studying if you want to get anywhere with your online presence.

Your other competitors might not even be related to classic car customization products or services, but because they rank high for your keywords, you should study them to understand their online methodology. After you know their tactics, you can figure out how to beat them. If you're doing searches for a keyword and none of the competitors are even in the same ballpark in terms of your business, you might have a keyword that isn't appropriate to your business, and you should reconsider optimizing for it.

Knowing Thyself: Recognizing Your Business Advantages

Part of being able to market yourself is actually understanding your business and your niche. This might seem like common sense, but the truth is a lot of businesses out there can’t decide exactly what they are and what they’re selling. Knowing what your strengths and weaknesses are gives you a huge advantage because you can work on reducing your weaknesses while emphasizing your strengths.

The first part of knowing yourself is figuring out what you do best. In our example, you customize classic cars, certainly. But maybe what you do best is repair work. You can take a rusted-out hunk of a Comet and have it up and running within weeks, with a shiny new paint job to boot. So one of the strengths you would play to on your website is restoration. Emphasize that on your website. Have a section devoted entirely to car restoration, with subsections linking to that.

Think about what makes you different than Bob or Mabel. Bob does restoration as well, but he doesn’t have an Internet presence like you do. That’s a point for you and gives you an advantage over Bob. Mabel has a gorgeous, SEO-friendly website, but she doesn’t have much on that website about actual car restoration, so there’s an advantage point for you to build on.

Knowing what your weaknesses are is also very important. Mabel’s got a great website. Your website is not as good (yet). She’s also a national business, while you are still fairly local. Those might be points you want to build on in order to make yourself equal with your competition. Streamline your website, and filter out or downplay your weaknesses. If necessary, completely take your site down and rebuild it from scratch.

Be aware of what makes you different. If you offer a service that many other people are offering, what makes you stick out from the rest of the pack? Do you offer other services that the competition doesn’t? Are you quicker or more efficient? Make sure to keep a note of these differences when researching the competition. What are they doing, and how do you do it better? Or how will you do it better? Make yourself valuable to the customer.

Compare your website to your competition’s: You have to make yourself equal before you can set yourself apart. Make sure you match what your competition offers in your own way and then provide content that explains why you're unique, more trustworthy, and better overall. In other words, make it obvious that you're the first choice to fit the visitor's needs. You know that you are made of awesome; now you just have to convince everyone else.

Looking at Conversion as a Competitive Measure

When you go through your competitors' sites, you're essentially looking for anything they have that gives them an advantage — any special content that appeals only to a certain sector or that is attracting links. Obviously, you're not using their sites as a blueprint to copy, but there's something about venturing off your own website and seeing things from a visitor's eye that can alert you to holes you would have missed otherwise.

If you are bringing your business online, you’re going to want a return on your investment. If you have a shopping site, you want sales. If you have an information site, you want people to hang out and read your content. If you’re advertising a newsletter, you want people to sign up for it. These user responses are examples of conversions (the actions that a website wants visitors to take). Getting conversions, not just visitors, is your goal if you have a website.

Your keywords are an important part of this. A good, relevant keyword for which your site ranks highly brings people to your site, and if your bottom line depends on the number of page views you’re getting (how many people are viewing your website), you’re pretty much set. However, if your keywords aren’t providing you with conversions, they could be actually doing you more harm than good. Keywords that aren't generating conversions won’t pay for the time, labor, or the bandwidth they take up.

Here is a conversion checklist to help you decide whether your keywords are effective:

• Is your keyword bringing in traffic?
• Is that traffic bringing you conversions?
• Are you able to sustain yourself based on those conversions? For example, say you have a keyword that brings only one or two conversions a year, but those conversions are worth two million dollars each. That keyword is a keeper.
• Is this a great keyword for branding or for an emerging product area? The only reason to keep a keyword that isn't earning you money is if that keyword has value as a brand or future investment.

Conversions also depend on your competition. You want to do better than the other guy. It’s a simple fact of marketing. But you want higher conversions versus high traffic. A website that pulls in 1,200 visitors per month but has only three conversions is less of a threat than a website that has 10 visitors a month but six conversions. Your goal is to achieve high traffic numbers with a high conversion rate. Your competition is the guy who already figured out how to do that.

Recognizing the Difference between Traffic and Conversion

While you’re looking at your competitors, make sure that you're also looking at which keywords are making sales versus drawing lots of window shoppers. Take note of how specialized they are. People search for broader terms when they’re still doing their research and more specialized terms when they’re getting ready to make a purchase. Your competitor who is ranked high for a general keyword might not be raking in the sales like the competitor dominating all the niche terms. Sometimes it takes users a lot of time and research to make a purchasing decision, so conversions may be slow to happen on broad terms.

Mabel’s Classic Car Boutique might have a fantastic, high-ranking website, but if she has very few conversions, she’s not really someone you should be looking at when trying to set the bar for yourself in the competitive market. High traffic does not always equal a high conversion rate.

Although a website may be high ranking and well designed for prime search engine optimization, it’s pretty much moot if the site does not provide what the user is looking for. If your site’s revenue depends entirely on traffic, you want a lot of traffic. But even in that scenario, you also want that traffic to stay around and visit the other pages within your site. Web pages with a lot of traffic and a high bounce rate (which means the visitor didn’t check out more than one page on the site or look at the main site for longer than a few seconds) aren’t web pages with a high conversion rate.

On the flip side, you might have a website that provides a newsletter, and the only way to get conversions is to convince people to sign up for your newsletter. A lot of traffic is good, yes, but it matters only if the people who are coming to your site do what you want them to do. If no one signs up for your newsletter, you get no conversions.

Along the same lines, if you have a keyword that draws in a lot of traffic but doesn’t provide you with very many conversions, the keyword could be more trouble than it’s worth. It’s using up bandwidth and server space to handle all the traffic, not to mention all the time and effort you spent doing your SEO, but it’s not providing you with any income.

A good example of the difference between a lot of traffic and actual conversions is a company we know that needed some optimizing. This company did well for itself in the mail order business, but not so well online. Its website was not at all search engine–friendly. After determining that changing the site’s technology was not an option, the company created a research or content site, as a sister site to the original, that was designed to draw in traffic and then send people to the actual, not-optimized website, where they could make purchases. For a while, this worked well, with increased traffic and sales, until the company decided to pull down the sister site because the company felt it was drawing traffic away from its original site! Never mind that the sister site was designed to bring in traffic in order to create conversions for the original site.

The lesson here is that the company shot itself in the foot by confusing traffic with conversions. The sister site increased its sales by drawing in the window shoppers and funneling the true customers to the original website. Keep this in mind while checking your server logs (records that measure the amount of traffic your site receives), and don’t freak out if you’re not getting insanely huge numbers. If you’re making a lot of sales, it really doesn’t matter.

Determining True Competitors by Their Measures

Knowing your competition is very important. In terms of competition, you have three basic types: the local brick-and-mortar business, the online powerhouse, and the large corporate brand name. These are all different markets and need to be treated differently in terms of competing with them. What you need to do after doing the research on your competition is to figure out whom you're really competing against. Look at all the information you've gathered. Is Bob, your local business competitor, your main competition, or is it Mabel’s online website? Or are you competing against the big kids on the block, like Ford and Chevy? It all depends on who you are and what you’re trying to sell. Bob is not your competition online because he doesn’t even have a website! Mabel pops up first in the search engine results, but she doesn’t do quite what you do. And as for the large corporations, it’s probably not even worth trying to compete with them for their broad terms.

Consider another example. Say that your brother owns his own car customization business, but he restores only Volkswagen vans. He doesn't want to rank for the term [Volkswagen] because his is a specialized business and Volkswagen is too broad a term. Most people searching for [Volkswagen] alone would probably not be looking to restore a Volkswagen van. If he were to focus solely on the keyword [Volkswagen], it would do him more harm than good because the term is too broad and is already a brand name. What he would want to do is rank for the keyword phrase [Volkswagen van restoration] or [Volkswagen bus restoration].

Brands are something to watch out for. Most people doing a search for [Nike], for example, are not actually looking for running shoes. They’re looking for the brand itself. Trying to rank for the keyword [Nike] is probably not in your best interest because Nike markets a brand more than it does a singular product. If you were trying to sell running shoes while also trying to rank for the keyword [Nike], it’s probably not going to work very well. You are much better off concentrating on your niche market than trying to tackle the big brands.

So assume that you’ve crossed out the big corporations and the smaller businesses that aren’t really relevant to what you’re doing. You’ve got a list of web pages that are your true competition. They’re the ones that customize classic cars, just as you do, and rank high on the search engine results page. So how are they doing it?

There are tools out there to help with determining how your competition is doing. comScore (www.comscore.com), Compete (www.compete.com), and Hitwise (http://www.experian.com/hitwise/) are three such websites that offer tools designed for online marketers, giving them statistics and a competitive advantage. These tools measure or gauge Internet traffic to websites. They collect Internet usage data from panels, toolbars, and ISP log panels. Essentially, they can measure who’s coming in to your website and from where. They also can gauge your competition. They can tell you how much your competition is bidding for a certain keyword, how much they spent on that keyword, and more. They can also track your brand name. They’re statistical tools that online advertisers and site owners use to rank sites in various categories on estimated traffic.

Unfortunately, all these services charge a fee for their services. They actually cost a pretty penny. Compete starts at $249 per month for an individual plan. Hitwise and comScore do not publish their pricing. All three are useful tools for measuring the traffic to your site and where that traffic came from, along with the traffic on your competitors’ websites.

Sweating the Small Stuff

Take advantage of what you can control. Every little piece of information counts, whether it's market research, what kind of traffic your competition is getting, what keywords they’re using, or something else. Do sweat the small stuff: It really counts in search engine optimization.

But don’t get discouraged because of all the competition out there: Many companies out there don’t know anything about search engine optimization. Most major companies don’t even bother with it. Your competition probably doesn’t know as much as you know at this point, and you can use that to your advantage.