How to Analyze Your Local Competitors in 6 Easy Steps

Ever wonder why the pizza place down the street always seems busier than yours, even though your marinara sauce is to die for? Or why that new boutique is stealing your longtime customers faster than you can say “clearance sale”? Welcome to the world of local competitor analysis — your secret weapon for staying ahead in your neighborhood’s business battlefield.

In this guide, you’ll learn how to analyze your local competitors so you can spot their weaknesses, bolster your strengths, and make your business the obvious choice for your local clientele. 

What is Local Competitor Analysis?

Local competitor analysis is the process of identifying, researching, and understanding the strengths, weaknesses, and strategies of businesses in your area that compete for the same customers you do.

Since competitors don’t typically publish these sensitive details on their websites, this analysis requires gathering and interpreting publicly available information. By systematically collecting and analyzing this data, you can gain insights to help you better win the hearts and minds of local customers and grow your business.

How Can Local Competitor Analysis Help Your Business?

Local competitor analysis is more than just keeping tabs on your rivals — it’s a strategic tool for business growth. Here are some key ways local competitor analysis can benefit your business:

• Identify market gaps: Discover unmet customer needs or underserved niches you can capitalize on.
• Improve your offerings: Learn from competitors’ successes and failures to enhance your products or services.
• Refine your marketing strategy: Understand what messaging and channels work best in your local market.
• Set competitive pricing: Ensure your pricing is attractive to customers while remaining profitable.
• Anticipate market changes: Spot trends and shifts in the local business environment before they impact you.
• Benchmark your performance: Gauge how well you’re doing compared to local industry standards.
• Differentiate your business: Find unique selling points that set you apart from local competitors.
• Enhance customer experience: Learn what local customers value most and exceed their expectations.

With these insights, you have all you need to position yourself for success in your local market. The key is knowing how to gather and interpret this valuable competitive intelligence effectively.

How to Analyze Local Competitors

Analyzing your local competitors doesn’t have to be a daunting task. With the right approach and tools, you can learn about your competitors and refine your business strategy to excel in your local market. 

Here’s a step-by-step guide to get you started.

1. Identify Local Competitors

The first step in a local competitor analysis is to identify who your competitors actually are. This goes beyond just looking at other businesses in your specific niche. To get a comprehensive view of your competitive landscape, consider these three types of competitors:

1. Direct competitors: These are businesses that are doing exactly what you do, selling the same items and offering the same services.
2. Indirect competitors: While these businesses might not offer the exact same products or services, they compete for the same customer base or fulfill the same customer need in a different way. For example, a coffee shop might consider a local bakery an indirect competitor.
3. Replacement competitors: These are businesses that offer products or services that could replace yours entirely. They might not be in the same industry, but they compete for the same consumer dollars. For instance, a movie theater might see a local escape room as a replacement competitor.

By considering all these types of competitors, you’ll gain a more complete understanding of your competitive landscape and be better prepared to position your business effectively.

Here are some effective ways to find these competitors:

• Google search: Start with a quick Google search using keywords related to your business and your location. Pay attention to both organic results and paid ads.
• Google Maps: Search for your business category on Google Maps to see nearby competitors. 
• Local business directories: Browse through online directories like Yelp, Yellow Pages, or industry-specific listings to find businesses in your area.
• Ask your customers: Your customers likely know about other options in the market. Don’t be afraid to ask them who else they’ve considered or used.
• Attend local events: Industry trade shows, chamber of commerce meetings, and local business networking events can help you discover competitors you might not find online.
• Analyze local advertising: Pay attention to local advertisements in newspapers, billboards, or radio. Who’s actively promoting their business in your area?

Using these methods, build your own competitor list in a spreadsheet and organize them based on the three kinds of competitor types.

2. Do a Local SEO Analysis

Now that you’ve identified your competitors, it’s time to analyze their local SEO strategies. Local SEO is simply a set of tactics businesses can use to make their business show up higher in Google search results. If you want to learn more about these tactics, you can look at our guides to multi-location SEO, healthcare SEO, or restaurant SEO for more details. 

For each of these points below, we’ll tell you what to look for so you can fill that information into your spreadsheet. This way, you’ll have a complete view of your competitors’ SEO strategies. 

1. Google Business Profile (GBP): Search for their business on Google, and then note whether they have a completed GBP (does it show up on Google when you search) and how complete it seems, recording whether they have high-quality images, what their review rating is, and the number of reviews they have.
2. Keyword analysis: Use a keyword tool if you have one available to note their top 3 ranking keywords and their positions for both organic and local pack results. 
3. Website analysis: Run your competitors’ websites through Google’s PageSpeed Insights to check their speed score and mobile-friendliness score.
4. Backlink profile: Use a keyword tool to record their total number of backlinks and top local citation sources. 
5. Website content strategy: Review their website to see how frequently they post, the types of content they create, and whether they have location pages.

After completing this analysis for each competitor, go through the same process but analyze your own business. 

Once you’re done, compare yourself to the competition by looking for: 

• Gaps in your competitors’ strategies that you can capitalize on (e.g., underutilized content types or platforms)
• Areas where your competitors are consistently outperforming you (such as higher search rankings or better review scores)
• Patterns in successful local content strategies (topics, formats, or posting frequencies that seem to work well)
• Backlinks from important industry bodies or local organizations that could be boosting their local SEO
• Correlations between specific SEO tactics (like posting frequency on GBP) and better local search performance

To make this process more manageable, consider focusing on your top 3-5 direct competitors initially. You can always expand your analysis to include more competitors later.

3. Check Their Social Media Accounts

Social media can provide a wealth of information about your competitors’ marketing strategies, customer engagement, and brand positioning. Here’s what to look at and record in your spreadsheet when analyzing your competitors’ social media footprint:

1. Platform presence: Note which major platforms each competitor is active on.
2. Follower count: Record the number of followers for each platform. This gives you an idea of their audience size and potential reach.
3. Posting frequency: Track how often they post on each platform. Create columns for daily, weekly, or monthly post frequency.
4. Engagement rates: Calculate the average number of likes, comments, and shares each post receives to get a sense of how well their content resonates with their audience.
5. Content types: Note the types of content they share (e.g., photos, videos, text posts, stories, reels). Create columns for each content type and record the frequency of use.
6. Customer interaction: Observe how they respond to comments and messages. Note their response rate and typical response time.

Then, do the same analysis for yourself. Once you’re done, look for: 

• The most popular platforms among your competitors and your target audience
• Types of content that touches a nerve with their audience
• How competitors are using social media to showcase their products or services
• Differences in tone and brand personality across platforms
• How competitors handle customer service issues on social media
• Any unique social media campaigns or contests they’re running
• Opportunities for differentiation in your own social media strategy

4. Analyze Their Other Marketing Strategies

Your competitors’ marketing strategies will likely go beyond just SEO and social media. Now’s your chance to examine how else they market themselves so you can figure out if it’s worth investing in these channels as well. 

Here are a few different marketing channels worth exploring:

1. Digital advertising: Use a specialized digital ad tool to see which platforms your competitors are running paid ads on (Google Ads, Facebook Ads, etc.), estimated ad spend, and main ad types (display, video, etc.). 
2. Email marketing: Sign up for your competitors’ emails and record the types of emails sent (newsletters, promotions, etc.) and how often they’re sent.
3. Offline marketing: Check local print ads, billboards, events, etc., to see how else your competitors are reaching new customers. 

After recording all of this data and looking at your competitors’ marketing strategies, take time to think about: 

• Unique selling propositions (USPs) that competitors are emphasizing in their marketing
• Channels or tactics that your competitors are using successfully but you haven’t explored
• Gaps in competitors’ marketing strategies that you could potentially fill
• Trends in messaging or creative approaches across your competitive landscape
• Seasonal patterns in marketing activities or promotions
• Integration of different marketing channels and how they create a cohesive brand experience

5. Catalog Their Offerings

Marketing is important, but it’s not everything. When analyzing your competitors, you also want to see how you stack up in terms of product and service offerings. 

The next step in your audit will be to catalog and analyze exactly what your competitors are selling. Here’s what you should pay attention to:

1. Product/service list: Create a comprehensive list of all products or services offered by each competitor.
2. Pricing structure: Record the pricing for each product or service. Note any tiered pricing, discounts, or bundle offers.
3. Unique selling propositions (USPs): Identify and note the key selling points or unique features emphasized for each offering.
4. Product categories: Group the offerings into categories to understand how competitors structure their product lines.
5. New releases: Keep track of when new products or services are introduced. 

Now, compare what you’ve learned about your competitors with your own product or service offerings. Ideally, you want to find:

• Gaps in your market that you can start to fill with your new or existing products or services
• Popular features or services that you might consider adding to your own offerings
• Areas where your offerings might have a competitive advantage
• Areas where you can adjust your prices to be more in line with the overall market

6. Learn From Customer Reviews

Customer reviews are a gold mine of information, giving you a direct line into what people think are your competitors’ strengths and weaknesses. Here’s how to effectively analyze and learn from these reviews:

1. Review platforms: Identify the review platforms your competitors are active on (e.g., Google, Yelp, TripAdvisor, industry-specific sites).
2. Overall ratings: Record the average rating for each competitor on each platform to get a quick overview of their overall customer satisfaction.
3. Review volume: Note the number of reviews on each platform to show the size of their customer base and how actively they encourage reviews.
4. Common positives: Identify and list the most frequent compliments or positive comments. These highlight your competitors’ strengths.
5. Common complaints: Note the most frequent criticisms or issues raised. These reveal potential weaknesses or areas for improvement.

After analyzing your competitors’ reviews, do the same for your own business. You want to look for:

• Recurring themes in positive reviews that could inform your own best practices
• Common pain points that you could address to differentiate your business
• How customer sentiments align (or don’t) with what you’re currently offering
• Any mentions of specific employees or services that consistently receive praise or criticism
• Methods competitors use to increase their chances of getting reviewed by customers
• How they respond to both positive reviews and negative reviews. 

How to Make Local Competitor Analysis Easier

As you’ve seen, competitor analysis is no small task, so any way you can make this process easier will likely be incredibly welcome. Here are some tips you can use to ease the burden a bit for yourself. 

Make it a Semi-Regular Task

Like many chores in life, the longer you wait, the harder it gets — and local competitor analysis is no different. While your first analysis might be time-consuming as you learn the ropes and set up your spreadsheet template, subsequent analyses become much quicker and more efficient.

Here’s why making local competitor analysis a semi-regular task (say, once or twice a year) is crucial:

• Easier updates: With less time between analyses, there’s less new information to gather each time.
• Focus on analysis, not data collection: More frequent updates mean you can spend less time collecting data and more time analyzing trends, such as new competitors, shifts in strategies, or evolving customer preferences.
• Spot trends and react quickly: Regular analysis makes you more familiar with the market, allowing you to more easily identify patterns over time and respond swiftly to market changes.
• Data at your fingertips: When you need insights (like during an unexpected sales slump), you’ll have up-to-date information readily available.
• Track your own progress: Regular competitor analysis also helps you gauge the effectiveness of your own business strategies by comparing your performance over time.

The goal is to make informed decisions, not to obsess over every move your competitors make. By analyzing your local competitors at regular intervals, you’ll stay ahead of the game without letting it overwhelm your schedule.

Incorporate Your Learnings Into Your Strategies

Jobs get easier when you can see the positive outcomes that come from your hard work. Making sure you take what you learn from this competitor analysis and implement it will help make this process easier, as you know that, in the end, you’ll be left with the data you need to improve your business. 

Here’s how to effectively incorporate your learnings into your strategies:

• Schedule strategy sessions: After each analysis, set up a meeting with your team to discuss findings and brainstorm potential actions.
• Identify actionable insights: Look for at least three concrete steps you can take based on your analysis, whether it’s adjusting pricing, improving online presence, or developing new offerings.
• Create an action plan: Assign responsibilities and set deadlines for implementing changes based on your competitor insights.
• Monitor results: See how your new strategies impact KPIs so you can double down or scrap this strategy for a new one. 
• Learn from successes and failures: Both your wins and losses can provide valuable lessons for future strategy adjustments.

By actively using your competitor analysis to inform your business decisions, you ensure that your efforts translate into tangible improvements and help you stay competitive in your local market.

Use Smart Tools to Make Analysis Easier

The most tedious part of the competitor analysis process is manually looking up all of the competitor data you need. However, these days, there are plenty of free and paid tools online that can help you streamline this process.

Here are a couple of tools or tool types you should check out to make competitor analysis easier for you:

• Keyword tools: These tools can track your competitors’ online performance, keyword rankings, and backlink profiles.
• Social media management tools: These tools can monitor competitors’ social media activity and engagement rates.
• Google alerts: Ask Google to tell you when your competitors’ names get mentioned to stay updated on their presence on the web.
• Survey tools: Get information straight from your customers about what they like (or don’t like) about you and your competitors with survey analysis tools.  
• Review aggregators: Review tools can collect and analyze customer reviews from multiple platforms across the internet. 
• Data visualization software: Use tools like Tableau or Google Data Studio to create visual representations of your competitive landscape.

The goal of these tools is to automate data collection and provide insights at scale, allowing you to focus more on analysis and strategy rather than manual data gathering. Choose tools that integrate well with each other to create a seamless workflow for your competitor analysis process.

Learn What Customers Are Saying About You

Learning about your competitors is important, but they’re not the only ones you need to analyze and learn from. For local businesses looking to compete in crowded marketplaces, it’s even more important that you learn about your customers and what they’re saying about your business.

With Chatmeter, you get a tool suite that helps you decipher what your customers are saying about you so you can learn:

• What your customers currently like about you
• What they want to see improved
• Why they choose you over your competitors

Chatmeter does all of this by helping you manage every aspect of your business reputation online — from analyzing and replying to online reviews to helping you curate your social posts. 

Learn how Chatmeter can help you boost your visibility online and win more local customers by signing up for a demo or trying out our interactive walkthrough below.

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