local business

By Rieva Lesonsky

As a small business owner, do you ever feel that your local business is at an unfair disadvantage compared to big, national chains? Surprise: You actually have a significant advantage over these competitors, according to a recent survey by Yodle.

The poll of over 6,000 consumers nationwide found customers trust and use local businesses, and even prefer them to national chains. Here’s what you need to know.

More than eight in 10 consumers (82 percent) currently use local businesses, and in the next year, 48 percent plan to patronize local businesses even more often. (Fewer than 1 percent expect to use local businesses less often.) In fact, consumers use local businesses more often than national chains. In the last 12 months, local businesses accounted for 56 percent of total business use, compared to 44 percent for national chains. Consumers also use local businesses a lot — 83 percent of respondents have done so in the last week.

Consumers aren’t turning to local businesses out of necessity, but out of preference. The survey asked respondents to judge whether local businesses or big businesses have each of the following qualities. Here’s what people said local businesses offer:

  • More personalized service: 96 percent
  • Being trustworthy/treating me fairly: 91 percent
  • Customer service: 80 percent
  • Delivering quality work: 86 percent
  • Being reliable/delivering what’s promised: 79 percent
  • Having professional staff: 75 percent

National chains outperform small businesses in only two areas: 70 percent believe national chains are more likely to be stable than a local business, and 77 percent say they offer more competitive prices. Still, 72 percent of respondents are willing to pay more in order to get the quality service they believe local businesses offer.

Though the average local business is doing a lot of things right, there’s still room for improvement. Here’s what customers want to see that local businesses aren’t delivering:

  • Online reviews: 76 percent want to see online reviews for a local business. Consumers are turning to reviews and social media more often to find companies, and expect to see reviews they can use to make these decisions.
  • Easy-to-use websites: Website improvements are the top change respondents want to see in local businesses in the coming year.
  • Special offers for returning customers: According to the survey, this is the top way a local business can differentiate itself from competitors. Nearly half (49 percent) would like to see more specials, deals and offers (and 20 percent say they’ve seen local businesses adding more special offers in the past year).
  • Self-service: More than one-fourth of respondents would like to be able to book appointments, manage billing and make payments to local businesses online.
  • More frequent online communications: Consumers would like to get the following communications from local businesses:
    • Service/appointment reminders: 84 percent (only 38 percent currently receive these)
    • Advice/helpful tips: 80 percent (just 26 percent currently get these)
    • Business/service updates: 76 percent (only 19 percent currently receive these)
    • Survey requests for feedback: 67 percent (only 13 percent currently get these)
    • Personalized communications: 65 percent (just 15 percent currently receive these)
    • Invitations to events: 63 percent (only 12 percent currently get these)
    • Newsletters: 60 percent (only 15 percent currently receive these)

Clearly, there’s a lot of room for improvement in how businesses communicate with their customers. Here are five steps your local business can take to stay ahead of the pack.

  1. Update your business website. Make sure it looks current, is easy to navigate and has the basic information customers are looking for (address, phone, hours of operation, prices, services). It should also be mobile-friendly since many customers do their research on their phones or tablets.
  2. Start an email newsletter. You can kill several birds with one by sending your customers a monthly newsletter with advice and helpful tips, updates about your business and new services you’re offering, and special offers or deals.
  3. Get personal. Use customer relationship management software to send personalized emails after you provide service to a customer. Thank them for their business and asked them to take a quick online survey so you can get feedback about how well you’re doing. You can also do this by phone if you have customers who prefer to talk live.
  4. Always ask satisfied customers to review your business online. A whopping 89 percent of respondents say they’re willing to do this, but just 7 percent have ever been asked. Worried about negative reviews? You shouldn’t be: Eight in 10 people who have ever posted an online review were prompted by positive experiences.
  5. Enable customers to make appointments online. This is simple to do and can reduce your staffing needs, too. BookedIn, TimeTap and AppointmentPlus are a few appointment-scheduling options to investigate. Of course, you should still provide the option for customers to make appointments the old-fashioned way, by phone, if they prefer. It’s all about choice.