Measuring the success of competitors using your keywords is a must. Known as competitive analytics, the process looks closely at what differences there are between their search engine optimization strategies and your own. Where some businesses let themselves down is the area that determines who their competition is. Just because another business is in the same niche doesn’t necessarily mean they are competitors. When it comes to search engine optimization, they are only competitors if they are targeting a similar set of keywords to you. Your competitors are those placed above and just below you in the search results for that keyword.

On the flip side, it is important to understand who you business competitors actually are. I can’t tell you how many times I have seen companies not properly identify their competition. Just because you are in the same industry does not mean you are a competitor. If you have an established company that has a great reputation and brand and if you starting out then, I would think twice about considering them your direct competitor.

Now lets switch back for your competitors in the search engines. If they rank above you, why? Do they have more links, or better quality links than you? Are their pages well written using known SEO techniques? By analyzing what they are doing successfully, you can determine which areas need more work on your own pages. By analyzing those behind you, you can determine where they are improving and what strategies you need to undertake to maintain your position.

Here is a good list of SEO competitive research tools that I recommend:

1. Google Webmaster Tools and Google Analytics – Yes, these are 2 of the best free tools on the market. Before you can look at your competitors, I would look at and analyze your own website. Organic search visitor data and the amount of inbound links.

2. Compete – Compete has become a great and industry standard for competitive research that goes beyond SEO. They offer tool and several anayltics products that are truly excellent. I would recommend Compete to any marketer or business owner at every level of experience.

3. SEOmoz – If you are not going to hire an SEO expert or search engine optimization firm to help you with your SEO, I highly recommend SEOmoz. I consider SEOmoz to be advanced and is excellent for the marketer or business owner that “gets” search engine optimization. If you are a beginner then, I would look elsewhere. SEOmoz offers a full suite of tools including the competitive research aspect.

4. Link Diagnosis - Here is a good tool that combines some other link data, I think it pulls in data from Yahoo and Bing as well.

5. SEO Book Firefox Tool - Very good plugin to install on Firefox that gives some top level data about your competitors as you search. This one is a must use…I switched from the IE web browser to Firefox when I found and started using this tool.

Another important point here is to always remember to check your own analytics to determine which keywords are delivering visitors and conversions. Make sure you undertake a competitive analysis for those keywords as well. You may not be targeting them, but if they are delivering traffic, don’t let your competitors overtake you and steal that traffic away. Those phrases possibly rank well – can you improve their rankings and maintain that advantage? Competitive analysis is all about measuring your competition – just make sure you are assessing your competitors correctly.