When It Comes To Buying, It’s All Local–Even Online

And that’s lesson one for small businesses to understand about marketing online, said David Bell, a marketing professor at the Wharton School at the University of Pennsylvania.

Most people spend most of their money within a very small geographic area, he said.

So, while business publications are full of articles about entrepreneurs finding global customers via the internet, most of the money that the owner of a small coffeehouse or small service business will make will come from someone right outside his door.

“So that’s the place to start,” he said, “with local, mobile-based marketing.”

Bell teaches an online course, “Digital Marketing, Social Media and E-Commerce for Your Business” at Wharton. Billions of people “are walking around with a personal computer in their pocket,” said Bell.

When they want to buy something, they pull out that personal computer, aka, their mobile phones, and research their purchase on the spot. “Every single customer is living an online life. You need to be present,” he said.

The way to be present at that moment is through “geofence” technology. Those kinds of apps can automatically send a text or message from the merchant’s mobile system alerting the potential customer, via his mobile phone, that he’s steps from away a store that sells the product he seeks.

“You show up in the moment, when those customers are close to you,” he said.

Once the customer has made a first purchase, the next goal is repeat business through relationship building, Bell said.

Geofence technology can help there as well, he said, recognizing customers — not by face, but by mobile device — as they walk in the door, alerting the store’s computer.

Now, Bell said, the sales clerk has the customers’ name and purchase history: Usually orders biscotti with coffee. Is it time for a friend-making free chocolate biscotti?

Bell acknowledges harnessing the power of the internet can be daunting, but, in some ways, it requires an attitude shift.
“Your entire business can be up-ended by the digital economy,” he said. It’s more than marketing.

For example, he said, someone who owned a taxi company has already discovered how Uber and Lyft’s mobile-based dispatch and payment systems changed an entire industry’s business model.

So, in tapping into the digital market, an entrepreneur should analyze each aspect of his business, from supply chain to marketing to payment to recordkeeping to discern the threats and opportunities in the digital world.

Try to look beyond the initial effort, he said, and imagine many business processes — billing, payment, accounting, the collection of customer information, marketing — becoming more effective and efficient over time.

And, he said, it doesn’t have to be costly.

Many of the most elementary functions, such as a modest website design that used to require lots of money and expertise, can be created free on platforms offered by Google or WordPress, he said. Ebay and Yahoo offer similar services.

Social media requires discernment, he said. “Facebook, Snapchat, Periscope, Instagram, Youtube — “too many channels to try to be in all channels.”

Instead, figure out which channels resonate most with your customers and put your efforts there, he said, although Facebook is probably a must for almost everyone.

Short-form video, he said, has become increasingly popular as a marketing tool and one that can be easily harnessed.

One of the best examples? In 2007, waitress Michelle Phan started filming short YouTube videos of herself applying makeup, tutorials on the art of beauty.

Now she’s got her own YouTube channel and marketing deals with some of the major cosmetics houses, Bell said.