fbpx

Ultimate Guide to Competitor Analysis (2022)

Table of Contents

Your small business has competition.

That’s a fact.

That’s why a competitive analysis is crucial.

If, you want your business to thrive.

So, ask yourself, are you willing to spend some time to better understand your competitors?

It’s going to be much simpler than you think. 

A basic competitive analysis is really just running a few online searches. All you need is some time and a little guidance.

Whatever your business does, there’s going to be other companies offering similar services to yours.

But, have you taken the time to find out who they are?

Do you know who your competitors are?

In any market, you need as much information as you can get.

You need to know who you’re competing against. 

A competitive analysis will help you find out.

Don’t be scared of the competition 

It’s actually not a bad thing to have competitors.

Competition makes you better as a home service business. It forces you to offer superb customer service. Competition also gives you the opportunity to differentiate your home service company.

It’s all about finding a better way to solve your customer’s pain points. 

Pain points are challenges, or problems your customers have.

Some problems are simpler than others. If I’m hungry, that’s a problem. But, if I come into your restaurant and grab a slice of pizza, you solved my problem. 

It’s a small problem, but still a problem.

There’s always a way to do it better – or differently.

The whole reason your small business exists is to solve a problem or challenge your customers have.

What Do You See During Your Own Competitive Analysis?

The most successful people know how to adapt to continue being successful. We see it in business, sports and life.

We can teach you to do the same. Or, you can speak with a reliable marketing agency and ask for their help.

Conducting your competitive analysis isn’t about being ruthless against the competition. In fact, there’s a lot of value in complementing the services your competitors offer.

Or, you can even partner with some of your competition.

Does that sound strange to you? 

Well, to some, maybe it is. But, there are ways to work with other businesses like yours. 

You can find situations where you can partner to exchange something of value, perhaps referrals.

Or, you can work together to solve a community problem, like hunger.

Look for the Opportunities Around Your Community

During your market research you already came up with a list of your competitors.

Now, it’s time to dig a little deeper into them. We like to use Google Earth to get started.

You can search your competitors, one by one, and add them to the map.

Or, you can search for your business category, for example roofing contractor. Then, you can select the local competitors you want to analyze.

Google earth is the perfect way to see which of your competitors are located in your primary service area.

Have some fun with it. Google earth is constantly adding new features, and offers a resources to help you get started.

The best part about doing your competitive analysis – it’s another chance to spot opportunities.

Opportunities mean more sales…more time with your family….less financial stress…see where we’re going?

Sounds good, right?

But, this only if you execute your marketing plan the right way. Before you can reach your potential, you need to understand your surroundings.

Competitor Analysis is the Second Step to Building Your Digital Marketing Foundation

Before you can do your competitive analysis, let’s refresh. A competitive analysis is the 2nd step to Building Your Digital Marketing Foundation.

What exactly is a competitive analysis?

Another stuffy definition. But, remember, we have to get this out of the way so we’re thinking the same. According to Entrepreneur.com, a competitive analysis is:

Definition: Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service

Entrepeneur.com

When you really break it down you don’t need a fancy definition. All you’re really doing during a competitive analysis is some basic research.

What’s the point of your competitive analysis?

Analyzing your competitors is about learning what they’re doing well. It’s also about seeing what they’re not doing so well.

You’ll find opportunities to solve new problems for customers

Maybe there’s a common problem you see other local service businesses can’t solve. Or, customer challenges the competition hasn’t recognized.

You’ll find new ways to grow your business

It’s also possible that you might find that a company you thought was a competitor, can actually become an ally.

Maybe you’re a roofer that only does residential roofing. Is there an opportunity to partner with another roofer that only does commercial roofing?

Open your eyes to the free information that’s out there on Google – and throughout the entire world.

Then, open your mind and think outside the box.

At Pillar Digital Marketing, we like to say that digital marketing is about getting creative!

So….

How should you start your competitive analysis? Where should you look to research your competition?

As a small business, you need to know who you’re up against. A competitive analysis is a key step to understanding your competition.

Conducting some research on other businesses like yours help you find out what kind of threat they present to the success of your company.

As a local business, the strategies you use to research the competition is different than the way a big corporation might do it. 

Your competitors aren’t filing financial reports online, or filing other detailed insights into their operations.

So, it can be difficult to follow the competitive analysis blueprint used by big business.

You don’t need just general information.

You need the specifics, step-by-step.

But, the good news for you is a competitive analysis in a local market is actually much more fun than in big business.

Once you figure out the right steps to take, it’s not hard.

So, we did the hard part for you, and came up with 3 easy steps to take to understand your competition.

Remember, this is just a start. You have to always be look at your competitors, and adding to your analysis. But, this will get you on the right track.

#1 – Run Some Google Searches

google-business-profile-guide-maps-local-3-pack

What would you do if you were looking for a business like yours in our area? If you’re like the 86% of people who rely on the Internet to find a local business, chances are you’re turning to a search engine like Google.

That’s why one of the best places to start analyzing your local competitors is with a simple Google search.

Go to www.google.com, and search your competitors from your market research

Search your top competitors 1 at a time

Type in their full business name and hit search.

Then, take some time and study the results.

In our experience, many local home service companies and contractors in our area fail to take the basic steps to establish a professional online presence.

If it seems like that’s the case, it’s a big opportunity for your business.

If none of your direct competitors are following Google’s advice to grow, building your own will be that much easier.

The right local marketing approach will help you stand out

At first, during your competitive analysis, you’re looking to understand the basics.

Check to see if each competitor has a completed Google listing. 

You need more than basic contact details on Google

A well-built Google My Business (now known as Google Business Profile) listing includes:

  • accurate contact info,
  • business description,
  • list of services offered,
  • frequent photos (at least weekly, preferably more often),
  • videos and at least 1-4 posts per month
 

You’ll also want to check out the full search results. Not just Google. 

 

google-business-profile-guide-organic-results

That helps you see where else your competitors are listed online. And, how they look.

You might see a website come up, some directory listings on sites like Yelp or Angie’s List, social media profiles like Facebook and perhaps some local news articles.

Casually review each of the pages and look to see if the information is consistent. Put yourself in the shoes of a customer. Pretend you were the one considering your competitor to do work on your home. What would you think of them?

Local homeowners want to work with home service companies that use the internet to earn trust. Are your competitors trying to earn trust. Or, are they just asking for it and saying they are the best?

#2 – Read your competitors online reviews

Example of a review on Google

Reading your competitor’s online reviews is such a simple strategy. Many small business owners don’t think of it.

At first, we didn’t either. 

But, then we realized something.

What’s the best way to know what a customer wants?

Ask them, of course!

Or, better yet, find out if they already told you.

Remember when we suggested you read competitor’s reviews to research your local market? Then, it was about finding out what’s important to your customers.

Now, once again, we’re going to take advantage of reviews. 

They’re online, for anyone to read. 

So, why not read the reviews customers left for your competitors one more time?

This time, try to find the other businesses that are serving your potential customers well. These businesses will be your biggest competitors. 

And, you can learn a lot from reading their reviews.

Reading reviews also helps you spot opportunities to target a niche customer.

Spend some extra time reading the negative reviews

As of 2018, over 50% of people expected local businesses to respond to negative reviews within a week.

Most businesses don’t that fast. If they even respond to their Google reviews at all. That’s another opportunity for your home service business.

Reviews are becoming more and more important.

According to BrightLocal.com, 91% of younger people, between the ages of 18-34 are relying heavily on Google reviews.

3 out of 4 of your customers don’t trust advertising. That means, they scroll right past your ads.

So, if your competition is only using paid ads on Google, that’s an opportunity in itself.

But, online reviews also give you insight into how customers think. When customers leave a review, they often include a written review in addition to the star rating.

They write about what their biggest challenges as a consumer, what makes them happy and what businesses aren’t doing too great.

How do your competitors respond when a customer has a problem? If not well, you might want to use your marketing to show your superior customer service.

How do your competitors respond to negative reviews?

What’s their tone like?

Do they have happy customers in the end?

People want to work with contractors and service businesses who take care of them when there’s a problem.

Use testimonials from customers. The best testimonials are the ones from customers that weren’t happy at first. Have you ever turned an angry customer into a loyal one?

If you both came out better on the other side, talk about it in your marketing.

Better yet, ask your customer to talk about their experience in a written review or video testimonial.

There’s nothing customers like more than knowing they’ll be taken care of if they do have an issue while working with you.

But, we’ll get to that later during the next steps in Building Your Digital Marketing Foundation. For now, back to your analysis.

#3 – Understand your competitor’s brand message

After you search and review your competitors on Google, and read their online reviews, you should have a feel for the type of customer they’re going after.

What message is your competition sending to customers?

Talking to the right audience, and delivering the right message is key to local marketing.

The beauty of the internet is that you no longer have to speak to the masses like with TV or radio ads. That’s a waste of money.

If you’re a home renovation contractor like a roofer or plumber, why  waste money advertising to people who don’t own a home?

With digital marketing, you can craft a message that speaks directly to customers you are trying to reach.

The message your company delivers is an important part of Building Your Digital Marketing Foundation.

This is called small business branding, and it’s an important part of your digital marketing foundation that we’ll get to later.

But, even before you learn the basics to crafting your own captivating brand, you know enough to analyze the competition.

You yourself are a member of our community. That’s why you understand the people that live here.

2 Questions to Ask About Your Competitors

First, what does your competitor stand for. Put another way, what are their values?

Next, what problem is your competition solving for their customer?

It’s kind of like your own small business, and why you’re reading this guide right now. 

Why are you learning about Building Your Digital Marketing Foundation?

You have a problem with your marketing, or a challenge. 

So, you’re looking for a solution that fits your needs.

An Example

Let’s look at an example. MCAS Roofing & Contracting, Inc. is owned by Michael Casolaro. Michael is a lifelong resident of the Hudson Valley, a local homeowner, and a family man. We interviewed Michael, to learn who he is and what he values. Before, we started working on his marketing foundation.

Next, we looked at Westchester County, NY and saw that most roofers are telling us to trust them. But, they’re not giving us a reason to.

Then knowing all of this, we were able to help MCAS Roofing craft a message that resonates with their best audience.

MCAS Roofing’s message is that Michael puts quality and customer service before profits. As a local, family run businesshe gets you. Michael wants to keep your family and your home safe.

The message has to be true, and align with your business’ values. If not, it won’t work.

MCAS Roofing’s message is geared towards homeowners that value quality craftsmanship, reliability, and safety during their project.

Mike’s ideal customers are homeowners that are sick of contractors saying they’re the best. His customers want to see MCAS Roofing is the best. They don’t want to be told by the business owner.

So, Mike’s using his digital marketing strategy to educate the Hudson Valley about how to find a reliable roofer. And, he’s putting out plenty of photos and recent reviews to help potential customers like us judge for ourselves.

What messages are your biggest competitors delivering to your customers?

After you understand their message, you can shape your own.

What’s next?

Now that you’ve taken some key, basic steps to do your competitive analysis, what’s next?

Reviewing your service business’s top competitors is only part of your competitive analysis.

Now that you know more about other businesses, you need to put the information to work.

Reviewing what you find will help you understand your local competition as a whole.

You need to identify the strengths, weaknesses, opportunities and threats. Then, you can decide how to brand your own small business.

Conducting A SWOT Analysis In Your Industry

SWOT analysis is common in big business. But, it’s an underused skill by small businesses like yours.

Using a SWOT analysis is helpful when doing your competitive analysis.

During a SWOT analysis, you’re looking for the strengths, weaknesses, opportunities and threats. This strategy is simple enough for you to do yourself.

It’s a strategy that you can use to analyze your own company, or the local market as a whole.

Analyzing the strengths, weaknesses, opportunities and threats in your service area helps you find the best strategy to shape your brand

Performing a SWOT analysis of your company and community also helps identify services you can specialize in.

This strategic approach is the best way to find opportunities to stand out from the competition. A SWOT analysis also lets you spot what everyone else is already doing well, then you can focus on areas you can best help your target customer.

What Specifically Should You Be Looking For?

When doing a SWOT Analysis of your competition, you need to look at what’s most important to a potential customer.

In the 3rd step, you’ll be using what you learn during your market research and competitive analysis to build your target customer profile.

After you do that, you’ll know the specific details of what’s important to your audience. But there are certain things any customer wants to see before trusting your service business.

These are just some of the questions you should ask yourself while reviewing what you find about your local competition. Think of other questions to ask yourself during your competitive analysis.

Strengths in your market

If lots of your competitors are doing the same thing, and at least a few are doing it very well, maybe find another specialty.

If you decide to compete in areas where homeowners are already been well served, you’ll have to find a way to offer extra value. You’ll have to do it better than the competition.

For example, if 2 top competitors offer 24 hour emergency service, you may or may not want to offer the same service. If you’re a very small contractor just starting out, you might not have the budget to have employees on call all night.

Weaknesses in your market

The world is changing.

It seems like each day that goes by, we get busier. Everyone is constantly competing for our attention.

It can be overwhelming at times. Your customers likely feel the same way.

According to marketing industry leaders like Ryan Holmes from Hootsuite, each person sees an average of 5,000 ads per day!

Spotting the weaknesses of other service companies like yours helps you to understand how you can make local homeowners happier.

When you do something different, or better, it helps you stand out.

One weakness we consistently see from the service industry is customer response time.

Customers want to hear back from you when they need you. It’s not about the customer being needy. It’s about the customer being busy.

Millennials especially are constantly on the move.

That’s why as of 2018, 82% of customers expected a business like yours to get back to them within 15 minutes if you miss their call or message.

SmallBizTrends.com

These numbers are growing. More and more, if the younger generation doesn’t hear back from you fast, they’ll call your competitors.

This is something you must do to reach your potential and build a strong marketing foundation. But, few small businesses have the tools and processes in place to be able to meet this demand.

So, if your competitors are weak at customer response time, their weakness means an opportunity for you.

Opportunities in your market

Spotting the opportunities helps to identify the possible paths forward. Let’s take that same example we gave above under strengths.

Pretend you’re a small business that’s just starting out.

During your competitive analysis, if you realize no local businesses like yours are returning missed calls within 15 minutes, that’s an opportunity.

If you don’t offer superior customer service, your home service business won’t succeed.

People are busy, houses are expensive, and homeowners have a lot of choices of which home service company to hire.

But, when your competition fails to respond quickly to customer inquiries, that’s an incredible opportunity for you to stand out and get some great reviews.

As a small business just getting started, it might seem impossible to respond to every customer within 15 minutes. But, it’s not as hard, or as expensive as you think.

There are lots of tools out there that can help you manage your customer response time.

Answering services, offering online chat and alerts pushed to your smart phone are just some basic ways small local businesses can offer the superior customer service at an affordable price.

Ideally, you’ll also have a software, like Keap, or Zoho Bigin, to help you keep track of your customers, and their communications. 

Then, you can focus on what’s really important – growing your business. 

And, spending more time with your family.

Threats in your market

Before you can build a digital marketing blueprint for long-term success, you need to see the threats coming.

Threats come in different forms, for different industries.

As a contractor or home service business, threats come from your current competition, new competitors entering the market or changes in government.

For example, during the recent COVID-19 pandemic, it’s sometimes harder to get building permits processed. It’s understandable. There are less people going into work.

But that’s still a problem, even if there’s a good reason. That could cause delays for you and bring revenue to a standstill. It might mean more hours spent by your staff communicating with the local building department.

That’s a threat you couldn’t have seen coming. However, during your competitive analysis you can spot many of the possible threats to your success as a small business owner.

For example, after reading your competition’s online reviews, you notice customer response time is a common complaint from customers. If you don’t exceed your customer expectations, a competitor eventually will.

Ubersuggest.Com To Help Your Competitive Analysis

Once your done taking the first three steps to conducting a competitive analysis, you might be ready to get more advanced.

There are several tools out there that allow you to better understand your competition. These tools can also make your job easier as a small business owner.

One of our favorite tools, that we use every day in our own business is Ubersuggest

It’s a tool from Neil Patel, one of the greatest marketers of our time, and previously named a Top 100 Entrepreneurs Under 30.

competitor analysis ubersuggest.com

Neil created a tool that let’s you analyze your own website, or the sites for your competition. You don’t have to be a techy. Neil’s tool does the heavy lifting behind the scene. Then, it can give you some easy to read reports.

This is extremely helpful during a competitive analysis.

If you still feel comfortable after moving through the first three basic steps of your competitive analysis, give Ubersuggest.com a try.

You can see how your competitor’s websites are performing, the search terms local customers are using to find them, and other key insights to help you see how you measure up against the rest of your industry.

What’s next after my competitive analysis?

Your competitive analysis is never finished. To be successful, you gotta keep track of the competition.

But, with that said, you’ve reached another huge milestone in creating a marketing blueprint for long term success.

You should be proud!

We hope you are starting to see the value and the opportunities that arise when you understand your local market.

So far, you’ve conducted your market research and done your competitor analysis.

Now it’s time to take what you’ve been learning during the research phase, market research and competitive analysis, and begin to plan your marketing strategy.

Before you move on, we really want you to review what you’ve learn to this point.

Don’t just read your notes one time. Study them. That’s where your greatest ideas will come from. And, it’ll help make sure your marketing foundation is rock solid.

The pieces are coming together!

If there is anything you need help with, just ask! We’re always willing to help our neighbors like you deliver superior customer service and quality home services in our community.

Now, let’s use your research to define your target customer.

Your Digital Marketing Foundation Strategy

We hope you enjoy reading this post!

If you want us to just handle your local marketing for you, schedule a meeting with us.