My Customers Will Always Buy Local. Won't They?

Local businesses tend to believe that if they build it, their customers will come. Everyone wants to support local businesses, right? That works when the economy is good. The moment the economy goes south, most consumers will throw their social conscience out the window in exchange for lower prices. In the real world, simply being local doesn't always cut it. In the age of the Internet, your competition is not just the local megastore, but can be any online outlet store anywhere in the world. How do you compete?

It's important to not rely on the implied guilt trip of being local. There are lots of good reasons to shop locally, but a majority of people do so only during times of abundance. It's the same thing as buying organic. Unless your customers have a specific moral reason to do so, buying local and buying organic are the first things that people stop doing. So the question becomes how to ensure your customers have more reasons to use your services than the fact that you're their neighbor.

Your overhead and limited buying power will likely not allow you to compete with megastores on price. You have to figure out a way to set your business apart. The simplest and most effective is by offering incredible service. Keep in mind that service extends to every member of your team, every sale you make and every issue that comes up with your products or services. If you lose a sale because your service is not exemplary, understand that you are likely losing the business of every person in that customer's sphere of influence. It will be nearly impossible to win them back.

Another way to remain competitive is to offer a wider selection. Consumers are used to shopping in locations that allow them to multitask when they shop. The days of visiting multiple small retailers for a single item are gone. Listen to your customers. What else do they need from you? If you sell shoes, have all related supplies available. If you sell cookware, also sell gadgets and ingredients your customers will need. Be as complete as you can in your stock.

If you can't compete on price, compete on quality. Sell higher quality merchandise than the megastore. Offer free classes on how to properly use the merchandise. Educate potential customers about the benefits of your higher end products. Offer follow up classes.

Set your business apart by using real differentiators. Don't rely on the fact that your shop is local. It might work when times are good, but the moment there's a hiccup in the economy, your business will be the first to go.