Click that player to hear the podcast

Let me begin here: I absolutely, 100%, without qualification, support local businesses.

The rest of this might sting.

Sorry.

The Wall Street Journal reports that applications for Employer Identification Numbers are UP almost 19% over this time last year (last year the year without the pandemic, in case you’ve lost track). There hasn’t been a surge in potential new businesses like this since 2007.

Without small businesses, over 43% of the GDP would vanish.

82.76% of customers say they prefer a local business over a large corporation. 8 in 10 say they would happily pay more for something, if it means supporting a local biz, according to Red Egg Marketing.

With numbers like that, you should trumpet to the land “WE’RE LOCALLY OWNED!!”

You’re proud you’re local. I’m proud you’re local.

But…your customer doesn’t care.

“Hold on there, Wizard boy… didn’t you just tell us 82.76% of customers say they prefer a local business over a large corporation?”

Yes, but Red Egg’s survey was a “self-reported survey” and there’s where this gets all wobbly.

“The trouble with market research is that people don’t think how they feel, they don’t say what they think and they don’t do what they say.”

— David Ogilvy

This issue isn’t if they care you’re “locally owned.” The issue is answering a question nobody asked.

While you’re leading with how proud you are of your “local ownership,” your competitors (local and international) are leading with what they will do for the customer.

Another way to look at it:

The reason Olive Garden has a 45-minute wait isn’t because they’re the best Italian restaurant in town.

They’re not.

Even in a town with no other Italian restaurants, they’re not the best Italian restaurant.

Olive Garden has a 45-minute wait because in an ocean of unknowns, they’re the safest harbor. You know them, you’re comfortable with them, you get exactly the meal you were expecting.

This is a feature of evolution. In the cave-dwelling days, our ancient ancestors chose food that was accessible and didn’t kill them last time. The Ehrenberg-Bass Institute for Marketing Science has shown this evolutionary trait hasn’t left us. We overwhelmingly choose a product simply because of mental availability and physical availability.

In other words: “I’m familiar with that, and I know how to get it.”

That means the big companies have an advantage. It’s not fair.

It’s also not fair that 3 of the 5 top-performing Olive Garden restaurants are in New York, Chicago, and Philadelphia…undeniably surrounded by far superior, and local, Italian restaurants.

With actual Italians making the food.

But all is not lost, my local business friend. You have huge advantages.

  • You have a story nobody else can tell.
  • You have a personality nobody else has.
  • You have a commitment and an obligation to do the right thing.
  • You have a reason you do what you do.
  • You are a real, reachable, and reactive owner (ever call the Olive Garden headquarters and ask to speak to Mr. Olive? Not happening).

If your advertising is saying “I’m an accountant, and I’m locally owned,” you’re not going beat Ernst & Young, Deloitte, and KPMG.

You want to beat them? Say this: “As a kid, I saw my Dad lose his entire business to the IRS after making a simple mistake. As an accountant, I swore on Dad’s grave I would never let that happen to anyone else. Ever.”

Huge, out of town companies have been a thorn for local businesses since Sears & Roebuck began sending catalogs in 1893. They’re not going anywhere.

Your advantage is (and always has been) your skills, services, offerings, values, and character. Your customer didn’t ask if you’re “locally owned.” Your customer just wants the carpet cleaned, trees trimmed, and a Godforsaken breadstick with more personality than Elmer’s Glue.

What Ehrenberg-Bass tells us is both simple…and really, really hard. You have to:

  1. Advertise, consistently and relentlessly, with a message that’s personal, relatable, and memorable.
  2. Be there when I need you.

You can do it. It takes time and effort, but you can do it.

P.S. I have a gift card from Olive Garden leftover from Christmas of 2014 you can have. First email, first served.
Latest posts by Johnny Molson (see all)