How to Conduct a Competitive Analysis for Your Local Business

Competitive analysis for a local business—sometimes called local competitive analysis or competitive research on a local level—involves surveying the market in your specific city or region to identify who else is vying for the same customers.

For example, a bakery in Denver, Colorado would look at other nearby bakeries, coffee shops, and even indirect competitors (like grocery stores selling pastries) to understand the landscape. A thorough analysis goes beyond simply copying rivals; it means understanding industry trends, customer needs, and local market forces.

In today’s digital age, local search behavior also matters. Research shows that 80% of U.S. consumers search online weekly for local businesses, and 72% use Google to find local business information.

These statistics underline why small businesses must map out their competition: knowing who ranks in local search, who has the best ratings or promotions, and how they differentiate themselves allows a business to identify opportunities and gaps in the market.

Conducting a local competitive analysis equips business owners, marketers, and consultants with the insights needed to refine pricing, products, and marketing for sustained success.

What Is a Local Competitive Analysis?

A local competitive analysis is the systematic process of identifying and researching businesses in your area that compete for the same customers you do.

This includes direct competitors (those offering the same products or services), indirect competitors (those meeting similar customer needs in another way), and even replacement competitors (businesses in different industries that vie for the same local spending).

For instance, a local coffee shop’s direct competitors are other cafes; indirect competitors might be nearby bakeries or smoothie bars; and a replacement competitor could even be an at-home beverage subscription service.

The goal is to collect data about each competitor’s strengths, weaknesses, and strategies. BrightLocal explains that in a local SEO context, this means finding all businesses that rank for your target local search keywords in Google Maps and organic results.

By identifying why those competitors rank well (their Google Business Profile, website content, etc.), you can capture similar opportunities yourself.

Local competitive analysis differs from broad market research in scale and focus. Instead of thousands of nationwide competitors, you concentrate on those within your city or neighborhood.

Search Engine Land notes that local SEO campaigns typically focus on only 20–100 keywords tied to a specific geographic area. Because customers are limited by location (they visit businesses in their community), analysis can be more targeted.

As one expert puts it, local analysis is part of the “initial discovery phase” of marketing, but it should be ongoing. In summary, local competitive analysis is about deeply understanding your immediate market: knowing which nearby businesses are capturing your customers’ attention, and why.

Why Local Competitive Analysis Is Important

Local businesses face intense competition in their communities. Consumers have more choices than ever, and they use online tools (Google, maps, social media) and offline methods (word-of-mouth, local ads) to decide where to buy. Conducting a competitive analysis helps you:

Identify market gaps: You may discover unmet local needs or underserved niches. For example, if no competitors offer late-night service or delivery in your neighborhood, that’s an opportunity. Chatmeter notes that analysis can “discover unmet customer needs or underserved niches you can capitalize on”.
Benchmark your offerings: By listing competitors’ products/services and pricing, you see how your business stacks up. The SBA recommends assessing competitors’ market share, strengths, weaknesses, and pricing strategies. If all rivals charge $5 for a product, charging $10 without justification could be a disadvantage.
Refine marketing and differentiation: Knowing competitors’ marketing channels and messages helps you craft a unique value proposition. For instance, if every local rival uses only Facebook ads, you might experiment with Instagram or local events.

Chatmeter explains that competitor analysis helps “refine your marketing strategy” and “differentiate your business”.
Enhance customer experience: Analyzing reviews reveals what customers praise or dislike about competitors. With 83% of consumers using Google to find local business reviews, study their feedback to learn what customers value.

If reviews of a local restaurant frequently praise its kid-friendly atmosphere, you might adopt similar family-friendly features.
Stay ahead of trends: Regularly surveying local competition can reveal shifts, like a new café trend or a drop in foot traffic.

Chatmeter emphasizes that local analysis is a “strategic tool for business growth” that helps anticipate market changes before they impact you. For example, if new competitors are launching delivery services, you might start yours preemptively.

In short, local competitive analysis turns otherwise hidden market intelligence into actionable strategy. It’s not a one-time task but an ongoing process: BuzzBoard stresses that local competitive analysis is “not a one-time process, but rather an ongoing process”. Frequent analysis (say, annually or semi-annually) keeps you informed as neighborhoods evolve.

Such analysis is often done collaboratively by business teams. Local entrepreneurs might meet around a table reviewing charts, maps, and reports to compare offerings and performance against nearby competitors.

By working through customer data, marketing campaigns, and competitor reviews together, a team can spot local market patterns and decide strategic moves. This teamwork approach helps a business stay agile and responsive in a competitive local environment.

Steps to Conduct a Local Competitive Analysis

A systematic approach makes competitive research manageable. Here is a step-by-step guide applicable to any local business, regardless of industry:

1. Identify Your Local Competitors

First, make a list of who your competitors are. This goes beyond just the businesses on your block: include direct competitors (same products/services), indirect competitors (different offerings that meet the same customer need), and replacement competitors (different industries competing for the same local dollars).

For example, a local gym’s indirect competitor might be a community sports club, and a replacement competitor could be a home fitness equipment store.

Effective ways to find these competitors include:

Google Search & Maps: Search Google for your core products/services plus your city or neighborhood. The organic results and map listings will reveal competitors. For example, if you search “(your service) near me,” note the businesses that appear.

Google Maps is especially useful: search your business category or explore nearby pins on the map to uncover rivals within a few miles.
Local Directories: Browse Yelp, Yellow Pages, TripAdvisor, or niche directories. These often list businesses by category and can reveal competitors you might miss.
Customer Input: Ask your existing customers where else they considered going, or what other options they know. They often know about competitors from local word-of-mouth.
Local Events & Advertising: Check local newspapers, bulletin boards, and trade events. See which companies are advertising in your community or exhibiting at fairs; these are actively reaching the same audience.
Segment by Proximity and Size: BuzzBoard suggests segmenting competitors by location and scale. For example, list the businesses closest to you, and separately note well-known regional chains.

Also note the number of locations a competitor has — a one-store local brand will compete differently than a national franchise in the area.

Compile these names into a spreadsheet, grouping them by direct/indirect/replacement and by how close they operate. This gives you a baseline of who to analyze in depth.

2. Examine Competitors’ Online Footprints

Once you have a list, research how each competitor presents itself online. Today most customers first encounter businesses via the web, so a rival’s online presence is a key battleground. Look for:

Google Business Profile (GBP) / Listings: Check if each competitor has a complete Google Business listing (the card that appears on Google and Maps). Note the business name, primary category, and any additional categories they use.

Search Engine Land highlights that “the name, primary category, and reviews are directly visible on the profile” and influences local ranking. Record each competitor’s review score and number of reviews – high ratings can be a strong advantage.
Website Quality and Content: Visit each rival’s website. Is it professional and mobile-friendly? How is the user experience? BuzzBoard advises to “critically assess the quality of their website, blog content, e-commerce platform, and social media engagement”.

Jot down observations: Are there active blog posts? Do they have clear service pages or menus? Check page load speeds with a tool like Google PageSpeed Insights (Chatmeter recommends this to gauge performance). Also see if they have multiple location pages or service pages that target different local areas.
SEO Performance: Use a keyword tool (e.g., SEMrush, Ahrefs, Ubersuggest) to find the top keywords each competitor ranks for in organic search and in the local “map pack.”

Chatmeter suggests identifying the “top 3 ranking keywords” for both organic and local results. Tools can also estimate how much search traffic those keywords bring.
Local Citations and Directories: Search the business name on Yelp, TripAdvisor, BBB, or industry-specific directories.

Count the number of citations (mentions of their name/address) – more citations can improve local SEO. Note if any directories have incorrect info for them.
Social Media Presence: See which social platforms (Facebook, Instagram, Twitter, etc.) each competitor uses. Record the follower counts and activity level. Chatmeter advises tracking “which major platforms each competitor is active on” and their “number of followers”.

For each, note posting frequency and engagement (likes, comments). Sometimes the type of content (photos, videos, posts) can reveal marketing focus or audience preferences.
Online Reviews: Beyond Google, check Yelp, Facebook reviews, or industry-specific sites. Note average star ratings and themes. This is covered in detail in step 5 below, but as part of the online profile you can note which platforms have reviews and the volume.

Overall, this examination builds a snapshot of each competitor’s digital footprint – how visible and compelling they are to customers searching online.

The BuzzBoard guide emphasizes making a “comprehensive snapshot” of competitors’ online footprint, including GBP completeness and community engagement.

3. Analyze Marketing and Advertising Strategies

Next, investigate how each competitor markets itself locally. This reveals which channels are saturating your market and which might be opportunities for you. Key areas to review:

Social Media Marketing: For each active social account, note posting habits. Chatmeter suggests recording the “platform presence”, “posting frequency”, and “engagement rates”.

For example, does a competitor post daily promotions on Instagram? How many likes or comments do they get on average? High engagement could indicate a successful tactic worth emulating or a niche audience to target.

Also see how they respond to customers on social media – do they answer questions or complaints publicly?
Digital Advertising: Check if competitors are running online ads. You can search Google Ads by searching keywords and seeing if competitor names appear in ads. Tools like SpyFu or Facebook Ad Library can reveal if rivals have active Google Ads or Facebook ads and what messaging they use.

Chatmeter recommends using specialized ad analysis tools to find “which platforms your competitors are running paid ads on…and main ad types (display, video, etc.)”. Note any recurring promotions or calls-to-action (e.g., “20% off first order”).
Email and Content Marketing: Sign up for competitors’ email newsletters to see how often they send emails and what they say.

Do they use emails for deals, informational content, or loyalty programs? Also, if they produce blog articles, videos, or guides, note their topics. Content marketing can be a strong local draw.
Offline Advertising: Don’t ignore traditional channels. Look for local print ads, billboards, radio spots, or flyers for competing businesses. Chatmeter suggests scanning local newspapers or attending trade shows to see who advertises in your industry.

For example, if a nearby dentist advertises in a community magazine, note that. Local radio ads or sponsoring events (like a little league team) can also indicate marketing priorities.
Promotions and Events: Identify any local promotions (holiday specials, loyalty cards, etc.) or community events each competitor hosts or sponsors. These activities show how they engage the community beyond online channels.

By comparing strategies across these channels, you can pinpoint what works in your local context. Chatmeter advises noting “unique selling propositions (USPs)” competitors emphasize and any “channels or tactics they are using successfully”.

If you see that all successful competitors have one thing in common (e.g., a referral program), that’s a clue to consider implementing something similar.

4. Compare Products, Services, and Pricing

The heart of your offering is what you sell. Cataloging competitors’ products and pricing highlights where you stand in the market. For each competitor, list:

Product/Service Range: What exactly do they offer? Chatmeter recommends creating a “comprehensive list of all products or services offered by each competitor”. For a retailer, this might be categories of items; for a service provider, the suite of services.
Pricing and Deals: Record prices for key products or service packages. Note any tiered pricing, bundles, membership fees, or discounts. For example, if competitors regularly offer a 10% off coupon or a “buy 3 get 1 free” deal, that affects how you price.
Unique Features: Identify any distinctive features or add-ons a competitor emphasizes (their USPs). For example, a competitor pizza place might highlight “all-natural ingredients” or “fast delivery in 30 minutes.”

Chatmeter suggests noting the “key selling points or unique features emphasized for each offering”.
New Releases and Updates: Watch for any recent product launches or service expansions by competitors (e.g., a new product line or expanded service hours). Keeping track of these “new releases” can alert you to changing market trends.

Once compiled, compare this to your own business. Look for gaps: Are there popular products competitors have that you don’t? Could you introduce a similar item or service? Also, identify your advantages.

For example, if your competitor charges more for a similar offering, emphasize your better pricing or added value.

The goal is to use this analysis to fill gaps or highlight your strengths: Chatmeter suggests finding “gaps in your market that you can fill” and “areas where your offerings might have a competitive advantage”. This step ensures your product strategy is data-driven by actual local market conditions.

5. Analyze Customer Reviews and Sentiment

Customer feedback is a goldmine for competitive insights. Reviews show what people really think about each business – often revealing strengths and weaknesses competitors themselves may not advertise. Proceed as follows:

Review Platforms: Identify which review sites have the most activity for your competitors (Google, Yelp, Facebook, industry sites like TripAdvisor). Chatmeter advises “identifying the review platforms your competitors are active on”.
Overall Ratings: Record each competitor’s average star rating on each platform (e.g., 4.2 stars on Google) and number of reviews. A high rating with many reviews can signal strong customer approval.
Common Positive Themes: Read through a sample of reviews to spot common compliments (e.g., “friendly service,” “great parking,” “clean facility”). These highlight what competitors do well.
Common Complaints: Likewise, note frequent issues mentioned (e.g., “long wait times,” “unclear pricing,” “slow website”). Chatmeter suggests listing the “most frequent criticisms or issues” in competitor reviews.

These are weaknesses you can exploit. For instance, if many local eateries are criticized for rude service, emphasize your friendly staff.
Your Own Reviews: Perform the same analysis on your business’s reviews. This lets you compare customer sentiment side-by-side.

Look for opportunities: if customers praise something you do (e.g., “very responsive”), lean into it; if they criticize something (e.g., “limited hours”), address it.

Given that 83% of consumers use Google to find local business reviews, definitely prioritize Google reviews, but don’t neglect others. The overall insight is to learn what matters to local customers.

Chatmeter points out that after competitor review analysis, you should look for “recurring themes in positive reviews that could inform your own best practices” and “common pain points…you could address to differentiate your business”. In other words, use review analysis to refine your customer experience.

6. Synthesize Findings with SWOT and Benchmarking

With all the data collected, it’s time to step back and organize insights. A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a useful framework. For your own business, list internal strengths and weaknesses, and external opportunities and threats revealed by your competitor analysis.

For example, a strength might be your longer hours; a threat might be a big chain opening nearby. BuzzBoard recommends this to “gain a broad-stroked viewpoint” of your business in context.

You can also create a competitive benchmarking chart. For instance, make a table listing each competitor (and your business) versus key metrics: pricing level, product diversity, customer ratings, online presence (e.g., website quality score or GBP rating). This puts everything in perspective.

For example, one column could show each competitor’s average Google review, another column their price range, another their social media following. This makes it easy to spot who’s leading or lagging in each area. You might even assign scores or use color-coding to highlight best vs. worst.

In benchmarking, focus on quantifiable metrics where possible. BuzzBoard suggests evaluating “pricing models, product diversity, and customer retention strategies”.

If a competitor’s recurring membership program is thriving, consider a similar model. If they offer a feature you don’t (like online ordering), note it as an opportunity. The insight is not to copy blindly, but to recognize proven successes.

By laying out strengths and weaknesses in a clear format (like a SWOT table or matrix), you create a roadmap of where to defend and where to attack.

Tools and Resources for Local Competitive Research

A variety of tools can accelerate this analysis. Many are free or low-cost, and using them ensures your findings are data-driven:

Google Search & Maps: (Free) The simplest tools. Use Google Maps search to find nearby competitors. Google search with location keywords (e.g., “bakery Chicago”) shows who ranks organically or in the local 3-pack.
Google Business Profile (GBP): (Free) Look up competitors on Google Business Profile to see their verified info. GBP insights (if accessible via collaboration) can also show how customers find them.
Google Analytics & Search Console: (Free) Monitor your own site’s traffic and discover which local keywords bring users to your competitors. While you can’t see a competitor’s analytics, Google Analytics can show what queries bring traffic to your site, giving clues about how people search in your niche.
Keyword Research Tools: (Free/Paid) Tools like SEMrush, Ahrefs, Ubersuggest, or Google Keyword Planner let you see what keywords competitors rank for and estimate their search volume.

They can reveal competitor backlinks and keyword gaps. Chatmeter notes that “keyword tools can track your competitors’ online performance, keyword rankings, and backlink profiles”.
Local SEO Platforms: BrightLocal and Moz Local specialize in tracking local rankings (in different zip codes) and building citations. These can automate part of the local SEO analysis.
Social Media and Monitoring Tools: Sprout Social, Hootsuite, or SocialBee can monitor competitors’ social media posting and engagement (followers, likes, etc.).

Chatmeter suggests “social media management tools…to monitor competitors’ social media activity”. Even manually, you can use Facebook’s Ad Library to see competitors’ active ads.
Review Aggregators: Tools like ReviewTrackers or even Google Alerts can notify you when competitors get new reviews. Chatmeter mentions using “review tools that can collect and analyze customer reviews from multiple platforms”. These can simplify scanning through feedback.
Survey and Feedback Tools: Services like SurveyMonkey or Google Forms can gather local customer opinions (e.g., asking customers what other options they considered).

Chatmeter encourages using “survey tools…to get information straight from your customers about what they like (or don’t like) about you and your competitors”. Local focus groups or customer interviews can also yield insights.
Data Sources: Public data can inform you about your local market. The U.S. Census Bureau provides demographic and economic info by city or ZIP code. Local Chamber of Commerce or industry reports may offer market statistics (e.g., total market size, growth rates). Use these to complement your competitive findings.
SWOT/Analysis Templates: Tools like spreadsheets or visualization software (Tableau, Google Data Studio) help organize and present your analysis.

Chatmeter mentions using “data visualization software…to create visual representations of your competitive landscape”. Even a well-formatted Excel sheet with charts can turn raw data into insights.

In practice, you’ll use a combination of these. For example, BuzzBoard recommends starting with Google Analytics and Facebook Insights to gather demographic and web traffic data. SEO tools (SEMrush, Moz) fill in search-related gaps.

And review sites (Yelp, Google) illuminate customer sentiment. The key is to automate what you can, so you spend more time interpreting results. As Chatmeter notes, leveraging such tools “automates data collection” and leaves you more time for strategy.

Various tools – both online and offline – can streamline this process. Many local businesses use data dashboards and reports to visualize competitor performance.

By pulling in data from Google Analytics, SEO audits, and social media metrics into charts, a business owner can quickly see where each competitor stands.

This image illustrates how analytics data can be part of a team’s review when conducting local competitive research. Using such tools makes it easier to track changes over time and to focus on high-impact insights.

Putting Analysis into Action

Collecting data is only half the battle; the final step is using it to improve your business. Here’s how to translate your competitive analysis into strategy:

Identify Key Actions: From your analysis, pick 2–3 actionable changes. For example, if competitors are weak in online sales, consider improving your e-commerce ordering. Chatmeter recommends finding “at least three concrete steps” based on your analysis.
Adjust Pricing or Offers: If your pricing is above local average without justification, consider promotions or loyalty discounts. Conversely, if you can command a premium (due to better quality or brand), reinforce that messaging. Use the pricing data from your benchmarking table for guidance.
Enhance Differentiation: Use the identified USPs (from step 4) to refine your branding. For instance, if you learned customers value quick service, highlight your faster turnaround. If competitors lack eco-friendly practices and customers demand them, introduce greener options and promote them.
Optimize Marketing Channels: Invest more in channels where competitors are underperforming. If rivals neglect Instagram but it’s popular locally (BrightLocal notes younger consumers use Instagram and TikTok for local discovery), double down there.

If local SEO gaps are found (e.g., your GBP needs more photos or better keywords), allocate resources to fix them.
Monitor and Track Results: Set measurable goals (more foot traffic, higher search ranking, improved review rating) and track them over time. Chatmeter advises to “monitor results” and learn from outcomes.

For example, if you implement a new lunch special and foot traffic increases 10%, that validates your action.
Schedule Regular Reviews: Make competitive analysis a recurring task (e.g., quarterly or semi-annually). As one guide notes, doing this analysis once or twice a year makes future updates easier and helps spot trends.

Keep your data organized so that each time you update, you can focus on interpreting changes, not starting from scratch.

By closing the loop—turning insights into strategy, then measuring the impact—you ensure the analysis pays off. As BuzzBoard summarizes, the goal is to provide “actionable recommendations to help [the business] dominate their local market”.

With a disciplined approach, local businesses can stay nimble and continue improving, even as new competitors enter the market.

Frequently Asked Questions

Q.1: What exactly is meant by “local competitive analysis”?

Answer: Local competitive analysis means evaluating other businesses in your own area that compete for your customers. It involves studying their products, prices, marketing, customer reviews, and more.

The focus is on a specific geographic market. Unlike broad competitor analysis (which might look at national brands), local analysis zeroes in on nearby rivals and how they rank in local search results and community awareness.

Q.2: How often should I conduct a competitive analysis for my local business?

Answer: It’s best to make this analysis a regular habit, not just a one-time project. Industry experts recommend conducting a review at least annually, or even semi-annually. Markets and competitors change frequently, so the sooner you detect a new trend (like a competitor’s new store or a shift in online ratings), the quicker you can adapt.

By updating your analysis regularly, you also save time gathering data, since most information (competitor names, basic offerings) won’t change drastically month-to-month.

Q.3: What tools can help with competitive analysis on a local level?

Many free and paid tools can assist:

Google Search and Maps: to find who appears for local searches.
Google Business Profile (GMB): to review competitors’ listings (categories, reviews, photos).
SEO Tools: SEMrush, Ahrefs, Moz, or Ubersuggest to see which keywords competitors rank for and analyze their backlinks (BuzzBoard specifically mentions Moz and SEMRush as effective SEO analysis tools).
Social Media Monitoring: Tools like Sprout Social or Hootsuite can track competitors’ posting schedules and engagement.
Review Aggregators: Platforms that collect reviews (or simply searching Yelp/Google manually) give insight into customer sentiment.
Analytics: Google Analytics for your own site and Facebook Insights can show your customer demographics, which you can compare mentally against competitors.
Local SEO Platforms: BrightLocal or Moz Local can automate tracking of local search rankings and citations.
Surveys and Alerts: Google Alerts (for competitor mentions) and survey tools (SurveyMonkey) can gather new competitive intelligence as it happens.

Each of these tools helps organize information so you can focus on strategy rather than data collection.

Q.4: How do I find indirect or non-obvious competitors in my area?

Answer: Besides obvious rivals, consider businesses that satisfy the same customer need in a different way. For example, Chatmeter points out that a coffee shop’s indirect competitor could be a local bakery (both offer food/drink options).

To find such competitors, think about why customers come to you and what else could fulfill that need. Use broad searches or even ask customers, “What other places did you consider?”. Checking business categories in Google Maps is useful here: it can suggest related categories (e.g., Maps might show bakeries or snack bars when you look up cafes).

Q.5: Can a very small business perform this analysis, or do I need a marketing agency?

Answer: Any business owner can perform local competitive analysis with time and consistency. It requires gathering public information (websites, maps, reviews) and some basic analysis, which can be done with spreadsheets and free tools.

For owners short on time, marketing consultants or agencies can offer expertise and advanced tools (like BuzzBoard’s SMB database), but it’s not strictly necessary. What’s most important is a systematic approach and the willingness to learn from the data.

As one expert notes, even a local business owner should “extensively analyze the digital indicators” of their market. With patience and the right resources, most entrepreneurs can execute an effective local competitive analysis on their own.

Conclusion

A thorough local competitive analysis arms small business owners with the market knowledge needed to make smarter decisions. It starts with identifying all relevant competitors in your area, then examining their offerings, marketing, and customer feedback.

By leveraging tools (like Google Analytics, SEO platforms, review aggregators) and frameworks (SWOT, benchmarking tables), you can convert raw data into clear insights. Remember that this is an ongoing process: local markets evolve, and repeating this analysis periodically keeps you informed of new threats and opportunities.

Ultimately, the insights you gain—from customer preferences to competitor weaknesses—should feed directly into your strategy. Whether it’s tweaking your pricing, launching a new service, or improving your online presence, use what you learn to serve your local customers better than anyone else.

With methodical research and data-driven adjustments, a local business can not only survive but thrive amid the competition in its community.