One of the things I tell prospective clients, as well as those interested in exploring the value of social media marketing for their company, is that one of the most important reasons to become involved with the social media world is to keep, or gain, a competitive edge over your competition.

I’ve spoken before about the importance of claiming your social media real estate and monitoring your brand and brand sentiment on social media, but another item that I want to share with you is how to do a competitive analysis for your company on social media.

While this seems like a daunting task, or even a time waster for some, what this will enable you to do is to gain lots of intel into how your direct competitors are using social media and where you need to be in order to gain the advantage.

Just think about it. If your major competitors are at a trade show, odds are that you will be as well. If your major competitors are placing advertising in a popular trade magazine, odds are that you will be using this vehicle to promote as well. Depending on your industry the list can go many different ways. But one of the rules of business is that if you want to gain a competitive advantage, then you must be highly visible in as many places as your target market resides.

What I want to show you here is how to develop a step by step competitive analysis using social media sites such as Facebook, LinkedIn, and Twitter. As each of these sites have different functions and terminology, I want to provide an overview that you will be able to apply to each site.

Step 1: Compile a List of Competitors. First, create a short list which includes direct competitors of various size. This will help you understand how each segment of your competition is using social media to their advantage. Create this list within an Excel spreadsheet for ease of use and reference.

Step 2: Locate and Record Their Social Media Locations. On your spreadsheet, create columns for Facebook, LinkedIn, Twitter and any other relevant social media sites to your industry (such as Pinterest and YouTube). Then go through each competitor and find their page on each site. Copy and paste the hyperlink to each profile in the spreadsheet accordingly.

Step 3: Record Their Network Numbers. On your spreadsheet, go through each social media profile and record their numbers (Likes, Follows) so that you can track growth. For example, if a company has 50 Likes and week after week it stays at 50, their marketing is not bringing in new people.

Step 4: Look at Their Insights. Facebook and LinkedIn currently have this capability where you can click on “Insights” and see the demographics of the people connected to said profile. This can be useful in seeing if your competitors social strategy is effective.

Step 5: Track Updates Versus Engagement. Take a look at their updates and see what they are posting. Then take a look at how many comments, likes or shares they are receiving with each post. This will show you how engaged their audience is. My only caveat to this is if your industry involves lots of privacy issues – transparent engagement may not be the top factor I would consider during the analysis.

Step 6: How Are They Branding Themselves? Look at the combination of their imagery, logos, descriptions and updates to track how they are branding themselves. Does it look slick and professional? Does it stay true to the company message?

Step 7: Time for Overall Analysis. Now that you have gone through and looked at the major points of the profile, compare where your competitors are with where you are. How do you stack up against your competition? Are there any tips that you can take from their strategy that you can apply to your own? What are they doing right? What are they doing wrong? While you go through the profiles, make sure to jot down notes in your spreadsheet for things that you want to keep an eye on. This helps to remember important items on the fly.

Now, how often should you do this? I would suggest a minimum of once a month. This will keep you fresh and up-to-date with your competitors strategy and success rate on social media.

This simple 7 step process will not only help you come to terms with how your competition is using social media, it will also show you how valuable it is going to be for your company moving forward. If you are not on sites such as Facebook, LinkedIn and Twitter – your competition will be. And if you are not there to steer the conversation about your company, products and services, who is going to do it?