Last week, I walked into a certain local business in Greenwich Village and spoke to Jim (not his real name). Or, more specifically, I tried to talk to Jim. As I entered, he looked up from behind the counter, surrounded by employees hauling around boxes of inventory, a line of customers at the register and a phone ringing off the hook. With what I hoped was a friendly and disarming smile, I began to remind Jim why I was there. I about 3 lines in before he cut me off with a crisp but not impolite, “Now’s pretty busy — could you please come back around 4pm? It’s usually slower then.”
I’ve heard this before — many times actually. Over the last month and a half my friend/teammate Nick Cancar and I have visited upwards of 50 local business, speaking with owners and managers. Our goal is to really understand local business and get to know the people who ran them: their story, their immediate challenges, what kept them up at night, what they found valuable. Get to know them we did, and the same image of a local business proprietor, somehow simultaneously overextended yet not doing enough, came up time and time again.
Running a local business is, in some ways, harder than ever before. When I came back that afternoon, Jim launched into a familiar story — over a decade working in the same store, rent going way up, online and big box competitors driving sales slowly down. Like many of the others we spoke to, Jim sticks around for the local neighborhood and the people who inhabit it. By his estimation, 75–80% of his customers are regulars from the area, and it’s the interactions and intimate moments he has with them that keep him going. Those interactions are good for business too. “Oh, you have to!” Jim quickly replies when I ask him if he makes a concerted effort to maintain personal relationships with customers. “For us a regular is someone who comes in, at least 2 or 3 times a week, who likes to support local businesses in the area.” He’s in the process of explaining to me his philosophy on how to keep regulars coming back when the phone rings. Jim answers with the same professional yet inherently skeptical tone he answered me with a few days prior. Only this time instead of saying anything, he listens for a couple seconds, frowns slightly, and hangs up. “Yelp,” he mutters. “A robo-call.”
We should talk about Yelp. For you, it might be a quick and easy way to scope out a potential lunch spot somewhere new. For local businesses, it’s a nightmare waiting to happen. Over the course of the 50 interviews we recorded, we cataloged hours-worth of audio clips detailing Yelp “horror” stories: fake reviews, or 3-star ratings because, “Everything was perfectly fine, I just don’t believe in giving someone 5 stars.” Roughly 30% of the local spots we talked to described their business being explicitly hurt by Yelp at one point or another. Many described inappropriate solicitations from Yelp. Others detailed not-so-subtle overtures from Yelp promising to make bad reviews disappear — for a price.
Businesses might be willing to put up with the nightmare if they found any actual value in Yelp’s advertising platform. Most of them do not. 81% of the businesses we talked to had “claimed” Yelp accounts, but only 8% actually paid for advertising on Yelp. It’s worth noting that although Yelp boasts over 2.8 million “claimed” businesses, they recognize advertising revenue from only 138,000 businesses according to their 2016 filings. That’s under 5% of their total. Despite their perceived omnipotence, Yelp is not “increasingly essential to local business owners,” as Yelp CEO Jeremy Stoppelman suggested in that report.
In fact, a common theme through all our interviews was a general lack of reliance on all things digital. While most local businesses we talked to are online and have some social media accounts, few found real value in them. Let’s check out the numbers:
Yet, an interesting foil to numbers touting the lack of dependence on advertising and online presence is this: A clear majority — over 70% — of our respondents claimed they thought their businesses were well-known. In our interviews we asked what businesses felt their most effective advertising methods were, and consistently we were told stories about low-tech marketing tools — colorful storefront banners out front, little paper punch cards — and, most often, good ol’ fashioned customer service. As one manager expressed to me, “I don’t have time to mess around online; I need to be out front with the customers.” That personal connection is of utmost importance for business owners. It’s the one advantage they have that big box retailers and online competitors simply never will be able to match. Every successful local business, consciously or not, will start trending towards being a service-based business: their product no longer just the physical product, but the whole customer experience.
Thus, for most local businesses, it’s the regular customers, not breadth of online presence, that are the key to their marketing strategy. Theirs is a strategy rooted — whether they realize it or not — in “word of mouth” advertising, and each regular has massive advertising potential for a local business. Every recognized-face, quality customer experience, or small favor done for a repeat customer has the potential to turn into a story told to a regular’s friend, along with an assurance of quality and an earnest suggestion to try the place out. That in-person recommendation carries exponentially more weight than a Yelp review or catchy Facebook post. So much more weight, in fact, that local businesses essentially find more value doubling-down on providing those experiences than trying to find value in more indirect digital marketing efforts, not to mention investing the time to learn the ins and outs of digital marketing in the first place.
So what WOULD be valuable to local businesses and people like Jim? Because, again, the vast majority of them seem to be working harder than ever, for less return. Here’s what we think: local businesses can’t cut corners when providing an authentic experience to their customers. Providing the quality customer experience that keeps people coming back requires both time and energy — two things that business proprietors are chronically maxing out on given all their other commitments. So why not make it as easy as possible for them to provide the intimate experience a regular customer would expect? With the feedback of these local businesses as a guide, that’s what we’re building Locasaur to be: an easy tool for local business owners to attract regular customers, communicate with them, make them feel special, and keep them coming back.
And that’s how I described to Jim what we were doing, and to be honest, he was very skeptical. But why shouldn’t he be? He fields robo-calls every day from tech companies who promise to drive more traffic into the store with powerful “web dashboards,” “localized dynamic advertising,” and fancy analytics about “conversion rates” and “outreach campaigns.” All money down the drain, all failed-experiments for yet another local business owner who can increasingly ill-afford to experiment. I thanked Jim for his time and useful feedback, and headed out just as the late afternoon rush picked up. Later that afternoon, we receive an email that ends like this:
“Let me know as things develop and thank you for paying attention to small local business. No one seems to be paying attention.”
Pique your interest/want to discuss? let me know at email@example.com! Co-Written with Nick Cancar, and credits to Ayesha Prasad and Andy Page for looking over drafts and edits. Keep up with Locasaur on Facebook, Twitter, and now Instagram.