Want Your Customers to Buy Local? You Have to Earn It 

And doing good is one way for your business to also do well.

Every local business owner I know would be thrilled to read a newspaper headline proclaiming the success of the president's economic stimulus program. Although you can find several creditable media sources offering "data" to support the argument that the stimulus is working, just as many others make the case that it has failed miserably. In my opinion, anyone trying to tally the score at this stage of the game is probably trying to sell something, because it's much too early to tell.

There is good news out there — but not for everyone. Some big businesses are starting to see revenue growth. This means their profits are being driven by increased sales, rather than decreased expenses like layoffs and store closures. Yet unfortunately, this turnaround has not yet begun for many local independent businesses. Companies that weren't "too big to fail" have had far less access to stimulus capital and the revenue opportunities presented by the global marketplace, and many are suffering. According to the National Federation of Independent Business, the Small Business Optimism Index actually took a negative turn in the March 2010 report.

That small businesses are experiencing an unprecedented funk could have huge consequences for every one of us, including big businesses. According to the SBA, firms employing four or fewer employees represent 99.7 percent of all employers, employ more than half of all private-sector workers, pay 45 percent of total private payroll, create more than 50 percent of non-farm GDP, and generate 60 to 80 percent of the net new jobs annually. These workers are consumers, too; so we can't have a domestic economic rebound if small local businesses do not hire new employees.

Since successful small businesses hold the key to job creation, the message to the buying public should be clear: Buy local. But we can't rely on an ad campaign with a popular mantra to bring customers in the door. Small business owners have to earn those buy-local dollars. We need to be competitive on quality and price. We have to make products, offer services, and provide experiences that are truly worthy of our customers' time and money. Otherwise, we should expect them to do the simple, convenient, cheaper thing, and head to Target.

Consumers hold great power in their relationship with the business community. If we don't give them a reason to buy, they don't have to buy. When times are good, competition matters less, but when times are tough and spending is tight, market positioning and competitive advantages become very important. Being a good business is not enough; you have to be great. More importantly, consumers have to know you are great.

How do you get the message out? Develop a community of happy, loyal, excited customers, and communicate with them. Ask for their feedback and tell them how much you appreciate their business. Never stop improving your product, service, or business environment. And don't ever forget that your customers' experience in your store or office is as important as the product or service you are offering. After all, it is often the experience that brings them back.

We can all name local businesses that have become institutions in their community. One sees the long lines out their door; you can't find a space in their parking lot. These are the places that become part of a community's "brand."

What can you do to become part of your community's brand?

1) Give Something Back. Determine what is genuinely important to you in your community and then participate. Join a board, sponsor a team, raise some money, or buy tickets to that gala fund-raiser. Sharing even a tiny percentage of your profits with local nonprofits is a powerful way to support causes you care about and generate positive changes in your community.

2) Put your money where your mouth is. Buy your books at the tiny shop two doors down from your office. Eat lunch at your neighborhood deli. What goes around will come around. Some of your favorite merchants will become your best customers.

3) Create a sense of community for your customers. A few weeks ago, Saul's Deli brought customers together to discuss the future of the pastrami sandwich. Every year, my firm sponsors an evening of spectacular live, local theater presented by the Shotgun Players. Clients love meeting each other at this annual event, and they talk about it to their friends and family members long after the curtain goes down. Find something you're excited about and bring loyal customers together to share an experience that will bind them to each other, and your business.

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