Understanding the Significance of Competitive Analysis for Local Businesses
To many consultants or agency professionals, the primary goal of competitive analysis for local business prospecting is to identify the competition, dissect their strategies, and try to replicate the insights obtained to construct a robust and successful business strategy. While that’s not incorrect, it’s more of a two-dimensional perception of the concept.
Let’s clear the air! Competitive analysis is more than just recognizing and copying the competition. One has to understand industry trends, identify opportunities, mitigate risks, and align the course of action with the market forces. These are the aspects that aid a local business in enhancing efficiency, improving profitability, and ensuring long-term survival.
The truth is, for many local businesses, conducting thorough competitive research can be daunting, and it’s also true that competitive analysis is crucial in staying relevant against larger players while fostering innovation and growth.
Easier said than done! In today’s crowded marketplace, consumers have more options than ever before, both online and offline. To stand out and thrive, local businesses must have a deep understanding of their competitive landscape. So on their behalf, as their digital partner, you have to effectively guide them towards profitability and optimize their digital presence by extensively analyzing the digital indicators. You have the tools, expertise, and outside perspective to provide your small business clients with a comprehensive competitive assessment, along with actionable recommendations to help them dominate their local market.
Now is the time to leverage the power of data and enhance your clients’ business performance. Master the craft of competitive analysis and reshape their marketing strategies for quantifiable results.
Step-by-Step Guide on How to Conduct a Competitive Analysis for a Local Business
Executing a competitive analysis for a local business can be streamlined into a simple guide.
1. Identification
Initially, identify the competitors. They could be businesses in similar categories as your client’s or those selling alike products or services. Use online platforms, such as Google or local directories to discover these businesses. For local market competitive analysis you can segment competitors by size, i.e. no. of locations they serve, by locations, i.e. the physical proximity to the business, or by category, i.e. how similar the business is in terms of its offerings. Another important criterion is their digital maturity. More on that later.
By identifying and reviewing competitors against these different segmented views, you will have a much more robust and deeper understanding of the local market and be a better consultant to your clients on their road to success.
2. Examination
The next step is examining their online presence. Critically assess the quality of their website, blog content, e-commerce platform, and social media engagement. Recognize what they’re accomplishing successfully and where shortcomings exist. You might notice, for example, a robust social media presence undermined by a deficient website.
Subsequently, study their product or service portfolio. What types of products are they offering? How well do they fulfill customer needs?
Create a very detailed view of various aspects of their online footprint, including their Google Business Profile completeness, what channels of marketing may be working best for them, how well they are able to engage their community, and what is an approximated budget they are using on acquiring and retaining clients. Further, what and how often do they run promotional campaigns; what keywords are they ranking for? Who are the ones that rank well for ‘[category/product/service] near me searches”?
The more comprehensive snapshot of your client’s competitors that you can prepare, the better understanding you will have of the landscape they operate within, and create a way forward for them.
3. Evaluation
The final step involves evaluation. Begin by analyzing competitors’ strengths—as in the previous step you did a thorough survey of their services and products, now spot their best-selling products, most effective marketing strategies, or customer service practices and compare them to your client’s. Take note of how competitors engage with their audience through social media, ads, or email campaigns. Do they consistently post engaging, visually appealing content? Are there gaps in their communication where you can step in?
Prioritize identifying weaknesses, such as limited product variety, negative reviews, or poor website usability, which you can leverage as opportunities. Look for recurring patterns in customer feedback to spot gaps in the market. This means there are systematic issues in the business you can address. For instance, if multiple reviews express a desire for eco-friendly packaging from a local bakery client or prospect of yours, suggest to your client the idea of introducing sustainable options to cater to this unmet demand. Gleaning such insights can reveal strengths and weaknesses from a consumer’s viewpoint—this can act as a great guide to develop strategies for outperforming rivals to keep your clients ahead of the game.
Then, incorporate professional benchmarking. Evaluate metrics such as pricing models, product diversity, and customer retention strategies. For example, if a competitor’s subscription box service for handmade goods is thriving, you might explore a similar model tailored to your client’s customer base.
Remember, professional evaluation is not imitation; it gives marketing professionals the scope to identify opportunities to innovate, address pain points, and create value that competitors overlook. It equips you with the ability to propose more targeted marketing strategies built on verifiable data and trends.
Tools and Techniques to Be Used in a Local Business Competitive Analysis
Start with a SWOT analysis of your client’s business. SWOT, standing for Strengths, Weaknesses, Opportunities, and Threats, when applied to your client’s business, gives a broadstroked yet thorough viewpoint of both their internal and external components that either favor or disfavor them. This analysis aids in understanding where they stand, the challenges they face, and how they can exploit opportunities. As an agency partner, the SWOT immediately apprises you of the holistic view and directs you in performing a more meaningful competitive analysis
Now sellers can spur action by generating a report that compares prospective clients with their competitors!
We, at BuzzBoard, understand the pain points of digital marketing agencies and know that building trust with your prospects is of paramount importance. With us, you can automatically generate and share compelling SWOT analysis reports with your prospects. Plus, BuzzBoard’s Competitive Benchmarking allows you to see how your local, small business prospect ranks nationally among businesses in their industry.
We provide you with a National Average Score or BuzzScore for all like-businesses in the industry as well as a ‘BuzzScore’ for your client. A BuzzScore is our uniquely curated digital footprint score for a business, which is based on its digital presence and performance. With the help of our benchmarking tool, not only will you be able to see where your SMB prospect stands in their industry but you will also receive an average score for the top 10% of leaders within that vertical. We help you dive deeper into finding efficiencies and improvements for your prospects.
With generative AI capabilities, BuzzBoard is the only platform provider for digital marketing agencies that fuses an exhaustive database on small to mid-sized businesses to deliver winning, personalized, sales content, including competitive analysis reports, and weaving competitive insights into sales emails for better engagement
While BuzzBoard canvasses your client’s and their competitors’ digital footprints across various pertinent parameters and channels, bringing them all within a single view lens—there are tools that can allow you to dig deeper into a particular aspect for your need.
Tools, such as Google Analytics and Facebook Insights, can provide crucial information, like demographic statistics, customer behavior insights, and competitors’ advertising strategies.
Another effective tool is a competitive SEO analysis. Utilities, like Moz, SEMRush, or Ubersuggest can offer vital knowledge about your prospect’s competitors’ search engine keywords strategy, backlinks, and more.
Additionally, leveraging online review platforms, like Yelp or Google Reviews, provides insights into what customers think about your competitors.
How a Competitive Analysis Can Influence the Growth of a Small Business
As a consultant or a marketer, it’s essential to include competitive insights when working with small and local businesses because:
As digital marketing professionals and consultants, your role extends beyond simply identifying gaps and opportunities—you are tasked with empowering local businesses to thrive in their unique ecosystems. By leveraging data-driven insights, modern tools, and a nuanced understanding of their competition, you help clients craft strategies that are not only actionable but transformative.
Remember, competitive analysis is a dynamic process. It evolves as markets change, consumer behaviors shift, and new competitors emerge. Evidently, staying competitive in the local business arena demands a continuous understanding of the competitive landscapes and persistent evolution in strategies. Your expertise in staying ahead of these changes, paired with an ability to deliver personalized recommendations, is what will set your clients apart in their local markets.
