In our second breakout of our State of Local research, we are looking at some baseline data for local customer demographics, retention, and acquisition tactics.
Understanding your peers’ target customers is important for businesses as it allows for potential collaboration, differentiation, and market insights. By knowing the customer base of fellow businesses, opportunities for partnerships, cross-promotion, and joint marketing can be explored. It also helps businesses identify gaps in the market and tailor their strategies to cater to a different segment. Additionally, keeping an eye on peers’ target customers provides valuable insights into market trends and consumer behavior, allowing businesses to stay relevant and responsive. Furthermore, recognizing shared customer bases fosters a sense of collaboration and community within the business ecosystem, leading to potential networking and knowledge-sharing opportunities.
Our research revealed that a considerable number of local business owners (35% of respondents) acknowledge the significance of their unique and specialized services, experiences, and products as vital contributions to our community. However, the crucial question remains: how many of them are effectively incorporating these strengths into their marketing efforts?
Among the respondents, 32% attribute their customers’ preference for choosing them over competitors to an overall better experience. Additionally, 19% state that they stand out due to offering a superior experience, while 16% emphasize their provision of a superior product.
About your customer
91% of respondents target customers in the Richmond region and 69% of respondents target consumers in the 35-50 age range, a demographic with significant buying power. While age demographics play a role in understanding your target customers, it is important to recognize that they do not provide the complete picture. Many businesses go beyond demographics and delve into interests and customer values to create an Ideal Customer Profile. This profile considers a range of nuanced factors that can be more challenging to measure but provide a deeper understanding of your target audience.
Foundations for creating your target audience
Understanding your ideal customer is essential for any business, but it is especially important for local businesses. This is because local businesses have a more limited reach (surrounding geographic area), so they need to be very strategic about who they target.
Understanding your ideal customer can help you create more effective marketing campaigns, provide better customer service, build stronger relationships with customers, and increase sales and profits. Here are some specific steps you can take to understand your ideal customer:
- Talk to your existing customers. Ask them about their needs, their pain points, and what they like and dislike about your business.
- Analyze your website traffic and social media data. This can give you insights into who is visiting your website and engaging with your social media content.
- Create a buyer persona. A buyer persona is a fictional representation of your ideal customer. This can help you to visualize your ideal customer and understand their needs and wants.
Once you have a good understanding of your ideal customer, you can use this information to improve all aspects of your business, from marketing to customer service. Here are some additional benefits of understanding your ideal customer:
- You can save time and money by focusing your marketing efforts on the right people.
- You can create or source products and services that your ideal customers will love.
- You can build a stronger brand that resonates with your ideal customers.
- You can create a more positive and productive work environment for your employees.
Acquisition and retention
Local businesses employ a range of marketing strategies, with a notable emphasis on utilizing organic or unpaid opportunities. They often rely on resourceful and cost-effective methods to promote their business and connect with customers. By leveraging social media, local partnerships, word-of-mouth, and community engagement, they maximize their limited resources to generate visibility and build customer relationships. However, traditional media opportunities such as newspaper or print media, TV ads, direct mailing, and radio ads are rarely utilized.
Local businesses face competition from larger companies that employ similar brand loyalty tactics. Despite the challenges posed by these corporate entities, local businesses often have a distinct advantage in cultivating personalized connections. They understand the importance of providing exceptional customer experiences, delivering unique products or services, and tailoring their offerings to the specific needs and preferences of their local customer base.
How to use “local” to your advantage
In 2021, InUnison conducted comprehensive research on consumer sentiment regarding the concept of local. The study explored various aspects, including what local means to consumers, how they currently prioritize supporting local businesses, and the common misconceptions surrounding shopping locally. It was identified that the following are impacting the local movement: diluted messaging, cause burnout and perceived drawbacks.
Local businesses can leverage this research to their advantage by emphasizing the unparalleled experiences and curated selections that national businesses just can’t replicate. Consumers need to be reminded of the surprising, engaging, and delightful aspects of supporting locally-owned businesses. This framework can be effectively utilized in your own marketing and branding efforts, establishing a distinctive local identity and capturing the essence of what makes local businesses truly exceptional. Embrace the local experience and emphasize its unique value to stand out in the marketplace.
BONUS: Becoming a member of InUnison not only certifies you as a local, independent business but also strengthens your capacity to stand out in the market.
In conclusion, with increasing competition and the need to stand out economically, local businesses must explore all avenues to increase their visibility. InUnison offers various ways to help amplify their stories, including the valuable research initiative discussed in the report. By leveraging this research and embracing their local experiences, businesses can effectively capture the essence of what makes them exceptional and successfully stand out in the market.
Read the full State of Local report here.