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How Small Businesses Can Use Geo-Conquesting To Undercut Competitors

December 19, 2017 at 11:35 AM

Feeling like an underdog? Geo-conquesting can help you undercut even the biggest competitors.

It’s a dog-eat-dog world. When it comes to growing market share, more often than not, that means stealing it from another competitor. One business's gain is another's loss.

In local SEO and advertising, everything is relevant. It’s not enough simply to rank on Google and Yelp; you want to outrank than your competitors. It’s not enough to bid on your keywords; you want to outbid your competitors to get a top position and the lion’s share of the clicks.

Of course, outranking or outbidding an established competitor is easier said than done, particularly if you find yourself playing the cash-strapped underdog. Without the brand recognition to compete on mindshare, the budget to compete on marketing spend, or the SEO partnerships and content machines to compete for organic search traffic, small businesses often crumble under the pressure of competing with established leaders in a battle of Goliath proportions.

This competition is perhaps best illustrated by what many call the “WalMart Effect,” a phenomenon in which new store openings by the big-box giant often correlate with a dramatic spike in closures from local small businesses. As the Economic Development Quarterly puts it:

"No matter which direction you go from Walmart, there's a very high rate of business closures in the immediate vicinity, and the further away you get there's less and less." - Joe Persky, Ph.D., University of Illinois

So how do you compete with the WalMarts of the worldwithout resorting to bidding wars?


Enter geo-conquesting

Geo-conquesting (sometimes referred to as mobile conquesting or competitive geofencing) offers an underdog-friendly way to piggyback off the success of a more established competitor. At its simplest, geo-conquesting is the practice of using location-based advertising to target a competitor’s customers, rather than your own customers or those with no existing brand loyalty. 

The practice is typically most effective in environments where market share is relatively saturated and dominated by a small number of known competitors.

For example, a neighborhood gym (say, Sally’s Fitness) may run into the problem of market saturation, upon realizing that the majority of the local population interested in fitness already have gym memberships, often at either of the two big chains in town: Orange Theory or Planet Fitness.

Instead of creating demand by marketing to non-gym-goers, Sally’s Fitness might use geo-conquesting to advertise to those likely holding memberships at either Orange Theory or Planet Fitness. Sally's Fitness can then engage these current members with a competitive positioning ad campaign designed to attract those customers unsatisfied with their current memberships.

This practice allows Sally's Fitness to get in front of hundreds of high-intent consumers that perfectly fit the mold of her target customer without breaking the bank on a broader awareness campaign.


Geo-conquesting drives results

Dunkin' Donuts uses geo-conquesting to compete with Starbucks

While geo-conquesting is often employed by small businesses, many of the Fortune 500 have found similar success using this underdog approach—particularly when it comes to expanding into new locations.

One such enterprise, Dunkin’ Donuts, commonly uses geo-conquesting to steal market share from its top competitor, Starbucks. The Massachusetts-based coffee giant couples geo-conquesting with behavioral analytics to target Starbucks customers and convert them with a “switch mechanism” in the form of a mobile coupon campaign.

The result? The campaign saw record-high redemption rates (3.6%) and took a big bite out of Starbucks’ local traffic. The campaign was particularly effective at uprooting those who preferred the taste of Dunkin’ Donuts, but frequented Starbucks because it was closer to their daily commute. For these customers, a simple incentive—like a dollar off a cup of coffee—was all it took to win back their loyalty and make the slightly longer commute worth it.

As Luke Edson, the VP of National Markets responsible for the campaign commented:

“If you have a location history that was sometimes you went to Dunkin’, sometimes you went to Starbucks, sometimes you went to McDonald’s, with the right offer at the right time, that was the group that saved with the highest percentages. That was the win for Dunkin’.”

No matter your size, targeting a competitor's location can provide a quick and cost-efficient path to growth if you can offer customers a compelling enough reason to jump ship.


Setting up a geo-conquesting campaign

While the term might sound a little intimidating, geo-conquesting is a simple tactic that can be used with most advertising platforms. To set up a basic competitive campaign, all you need to do is target a radius around your competitor’s business address. This can be achieved in Google AdWords with ‘Radius Targeting’ under Location Settings or in Facebook Advertising with the ‘Drop Pin’ function under Audience settings.

How to set up a mobile conquesting campaign in Google AdWords using radius targeting

With most advertising platforms, including Facebook and Google AdWords, you are required to target an area with a minimum radius of one kilometer. Doing so will ensure that your advertisement can target anyone currently in that business location, along with those living in, working in, or passing through the vicinity. This latter segment, while not guaranteed to be your competitor’s customers, are all considered probable customers, given our natural tendency to frequent those businesses closest to our daily commutes.

After setting up the location target, the campaign can be set up like any other paid advertising campaign, although we'd recommend focusing on competitive positioning: What do you offer that your competitors don't? What would give current customers a strong enough reason to shift their loyalty? While not necessary, consider adding some sort of incentivized offer, simlar to Dunkin Donuts', to ease any uncertainty customers may have about shifting their habits.


more than geofence 

Taking it one step further

Of course, not all of your competitor’s customers can be lumped into one neat circle. As we explored previously, many customers are willing to commute much further to patron a business, while others may feel too far away, despite geographic proximity. Both of these highlight a critical shortcoming in traditional geo-conquesting: Relying too much on proximity. In doing so, this approach fails to take into account factors like:

  • Accessibility: Is the location easily accessible by public and private transportation? Is it by a freeway exit or bus terminal? Is there ample parking? Accessibility is a major component in how far customers are likely to travel to frequent a business—and the lack thereof may be the reason why even close neighbors are unlikely to be customers.
  • Spatial/behavioral patterns: From where do consumers come? Where do they go after visiting a business? Knowing how a stop fits into a greater pattern will help you make sense of location data to laser-focus your advertising spend toward those with the offline patterns you’re looking for, rather than the entire neighborhood.
  • The bigger customer journey: While traditional geo-conquesting targets those currently in a competitor’s location, even the most loyal customers will only spend a small fraction of their time here. And this fraction is likely to be even less for those you're really looking to targetthe customers disappointed in their current options and most likely to hop over to your business. Understanding how consumers engage with location will enable you to think beyond a single location point to target where those customers actually spend their time: their home and work locations.

While you can always slice and dice your local targeting parameters natively in your network of choice to reflect the factors above, Spatially's team of data scientists and GIS analysts have done the heavy lifting so you don't have to. With our Spatially Ads product, all you have to do is choose our ‘Competitor Targeting’ objective and enter the business name or address of your biggest competitor: Our software will then aggregate millions of census and mobile data points to plot out your competitor’s most probable customers based on spatial, demographic, and behavioral analysis.

Competitor geofence targeting in Spatially Ads

If for example, you’ve decided to open up a small breakfast spot in Los Angeles and wanted to run an awareness campaign targeting customers of another establishment, you can use Spatially Ads to run that competitor's address and visualize where their customers most likely come from:

Drawing a geofence around a competitor's business location

You can then specify that you only wish to target those customers observed during breakfast hours by going into the ‘Time of Day’ settings. You can even specify between home and work locations (in Advanced Options) to target consumers at the location where you think they’ll be most responsive to your campaign. Once you’ve set these filters, your targeting will update to reflect your choices:

Enhance your mobile conquesting campaign by segmenting for time of day

All of this specificity is ultimately designed with one goal in mind: To maximize your advertising spend. With a traditional geo-conquesting campaign, you risk diluting your ad spend by targeting those that are inaccessible or rarely have a reason to pass by your store. This wider net will also capture many consumers who simply don’t represent your target market, such as those visiting your open-all-day competitor for dinner instead of during breakfast hours. With Spatially’s competitor targeting, you can better ensure that all of your clicks are delivered to your most probable customers, resulting in greater conversion and a significantly lower cost per customer acquisition.

Once you’re satisfied with your geofence, you can specify your demographics and run a Facebook or Google AdWords advertising campaign straight from Spatially Ads.

If you choose to advertise on Facebook, you can take your mobile conquesting even one step further by targeting those who like your competitor’s page or share their content. Or, if you chose AdWords, you can bid on branded keywords (e.g., the name of your competitor’s store) to get in front of anyone searching for more information.


Ready to grow market share? We can help!

Stretch your ad dollars further by using Spatially Ads to target your (or a competitor’s) most probable customers. Just type in a business address, and we’ll walk you through everything you need to launch your next local advertising campaign on Facebook or Google AdWords.

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