According to a recent study conducted by the Small Business Administration, there are approximately 33.1 million small businesses currently operating in the United States. Collectively, they employ about 61.7 million people – or roughly 46% of everyone employed by the private sector in this country.
All this is to say that it doesn’t matter how small you are. The type of business you’re running or even the industry you’re operating in makes no difference. Whether you realize it or not, your competitors are all around you. This is especially true if yours is a home services organization, or if you operate a brick-and-mortar location as you would if you were a law firm, a certified public accountant, or a health and wellness organization.
There are a lot of other businesses out there that do what you do. Unfortunately, they’re all going after the same target audience of potential customers. Sometimes, the size (and therefore the potential) of that audience is quite small. But at the same time, you must remember that nobody does what you do quite like how you do it. Leaning into that is how you turn a crowded marketplace into what it really is: an opportunity for continuous improvement and a way to reach that audience like nobody else.
That, in essence, is what a competitor analysis is all about. Here, you’re not just looking at your direct competitors in a general sense – meaning that simply identifying how many other similar businesses are out there is just one small part of a much larger story.
Instead, you’re looking at their marketing strategies. You’re looking at their success up to this point. You’re examining not only their strengths… but their weaknesses as well. So let’s dive in.
What is a Competitor Analysis?
At its core, a competitor analysis is a way to look at your direct competitors to learn as much as you can about the way they do business. This is particularly relevant as it pertains to their online presence and the marketing strategies they’re using, as again, you’re talking about an organization that is ostensibly trying to communicate directly with the same audience that you are.
What avenues are they using to market their services? Where are they spending the majority of their money online? What are they doing that is working exceptionally well? What are they doing that seems to not be working well?
These are the types of questions that a competitor analysis will help you answer.
You should perform this type of analysis for every competitor that you have in a particular area. As you do, certain themes will start to emerge. Maybe you’ll find a new way to engage your community that nobody else even realizes exists. Maybe you’ll see that a lot of other businesses are making the same basic mistake with their marketing collateral because they’re simply following “best practices” without adapting to the unique audience they’re actually serving.
Regardless, this is the best chance you have to take advantage of any gaps that exist within the marketplace, turning someone else’s liability into your clear advantage.
The Importance of Analyzing Your Competition
Again, the number one reason to analyze your competition is that doing so helps you identify their strengths and weaknesses. Sometimes, you’ll see that a competitor is doing something so well you’ll never be able to match the effort, or at best you’ll come off as a pale imitator. That’s good news – you know exactly where you shouldn’t be spending your marketing budget.
Sometimes, you’ll notice that a competitor is doing something wrong and is creating a gap in the marketplace as a result. That’s better news – you can now slip in and fill that gap in the most efficient and cost-effective way.
In a larger sense, analyzing your competition can teach you a number of other valuable lessons, including ones like:
- It helps you gain a better understanding of your target audience. In theory, your competitors have also carefully researched the audience you’re trying to reach. They may have picked up a few things that you have yet to that you can learn from.
- You’ll be able to spot industry trends as they develop, which you can then capitalize on moving forward.
- It’s a great way to set benchmarks for future growth for your own business. If you analyze your most successful competitor, you know what is theoretically possible for you to accomplish with the right strategy in place.
How to Conduct a Competitor Analysis
As you might expect, conducting a competitor analysis begins by first identifying your competitors. If someone needed a product or service like yours but didn’t go to you directly, where would they go? Make a list of all the businesses that match that description. Those are your competitors.
Next, create a competitor matrix and gather as much background information as you can. A competitor matrix is essentially a template that you’ll use to fill in all the background information you gather. Create categories for information about their websites, social media pages, blog articles, and other informative content. You’ll also want to keep track of their history (are they brand-new or are they well established?) as well as their location (do they operate in one place or do they have several brick-and-mortar storefronts?) and company size.
At that point, you’ll begin to get a sense of exactly who your competitors think are their own target customers. Look at the mission statement on their website and pay careful attention to the type of messaging they’re using. Who are they trying to reach? Does that audience align with your own? These are essential questions to answer.
Once you’ve collected this level of research, focus on the four P’s of competitive analysis:
- Product.
- Price.
- Promotion.
- Place.
What does their product do that yours does better? Are they offering a solution cheaper than yours or more expensive? What types of promotions are they running? Where are they in the competitive landscape?
Answer these questions within the context of not only how a competitor relates to others on your list, but directly to your own organization. Their individual strengths and weaknesses will begin to rise to the top.
By now, you should have a clear indication of what is working and what isn’t relative to the successes and failures of those around you. Armed with that insight, you’ll be in an excellent position to double down on the former and get rid of the latter – thus setting yourself up for a significant amount of success moving forward.
Performing a Competitor Analysis Has Never Been Easier with Surefire Local
From the moment we opened our doors at Surefire Local until now, our core goal has remained the same: we want to help small businesses like yours not only establish a stronger online presence but do so in a way that makes it easier than ever to find new customers.
A big part of how we do this comes by way of our all-in-one marketing platform. It’s intended to pull all your various marketing efforts together, acting as a single “one-stop shop” for your online presence and marketing activities. This includes helping you perform a competitive analysis, yes – but that’s just a fraction of the full potential just waiting to be unlocked.
A big focus has to do with website and local SEO optimizations, for example. You can use our platform to create geo-targeted content that will not only get published on your website and blog, but also on social media platforms as well. It also includes robust online review management functionality. You can send review requests, write responses to the reviews that you already have, and even analyze your brand sentiment so that you know beyond a shadow of a doubt what real people think of you.
It also offers a number of additional features, including but not limited to ones like:
- Directories Management. You can claim, edit, and publish new content (think: photos, videos, and special offers) for your business across more than 80 different directory listing platforms like Google Business Profile.
- Content Marketing. Finally, you’ll have access to all the tools you’ll need to create locally targeted and highly relevant content for your blog, your Google My Business Profile, business directories, and social media profiles.
- Social Media Management. Speaking of those social media profiles, you’ll be able to schedule posts, track all the essential engagement metrics, respond to comments, and more.
- Local Online Advertising. Effortlessly create ads that are designed to not only attract the attention of customers within your service area, but keep that attention for as long as possible.
- Email and Text Messaging. You can now keep both new and existing customers engaged with your business through the type of personalized nurture and retention campaigns that have proven to be quite effective in the fast-paced modern era that we’re now living in.
The Surefire Local platform also includes robust analytics and reporting tools. Stop acting by gut instinct and intuition. Instead, make decisions based on cold, hard facts. You’ll have full transparency into your campaign performance like never before, including how much revenue your marketing dollars are generating. Plus, thanks to AI-generated recommendations, you’ll know specific actions that you can take to see the improvements that you’re after.
All this, and you also get access to the webinars, blogs, and other educational resources that are designed to help small businesses such as yourself learn and master all things online marketing.
So if all this sounds like exactly what your current efforts have been missing, that’s great – we’re here to help. Attend a Surefire Local demo to learn more about how we can help you perform a thorough competitor analysis, as well as to find out what our technology can do for you.