The local marketplace is incredibly hard to pin down. So much variance exists in business category, size and location that making forecasts or identifying trends is difficult. What works for an SMB with eight locations and 100 employees is often not a good predictor for a two-person store.
At the Local Search Association, we are working on analyzing narrower profiles of local businesses to try to provide better information and insights into the needs of SMBs in today’s changing search and marketing landscape.
Our research partner, Thrive Analytics, conducts an annual Local Pulse survey to gauge SMB attitudes towards different forms of media and offers forecasts for economic activity, SMB marketing budgets and their relationship with agencies. I’ll be taking a look at Thrive Analytics’ 2015 Local Marketing Outlook for Home and Auto Emergency Related Service Businesses to provide five search and marketing tips for small local businesses with similar profiles.
Home and Auto Emergency Related services include businesses such as appliance repair, plumbers, HVAC service providers, auto repair shops and tire dealers. There are a number of common characteristics in this group that help define those businesses this outlook would apply to.
- Services are often provided in a time-sensitive manner and involve repairs that customers view as urgent or problems that require quick solutions.
- Businesses are small in size — more than 80 percent of these businesses have nine or fewer employees, and almost 65 percent have four or fewer employees.
- Most are single-location businesses — 52 percent have one location and 75 percent have three or fewer locations.
- Average transaction revenue is $431, excluding roofers. Roofers have an average transaction receipt of more than $4,600.
- The ideal customers are established and financially stable clients who spend more — often older customers with stable jobs and larger assets. For example, the average transaction price for an auto repair service for a Millennial is $327, compared with $533 for a Boomer or senior.
- Average marketing spend is approximately $8,000 per year.
- Business outlook is up, and 34.4 percent of businesses with nine or fewer employees will increase marketing spend. The remaining SMBs will mostly keep spending the same.
Here are five observations about local businesses with the above profile that reveal great opportunities for marketers to help improve these SMBs’ local search and marketing strategies.
1. Both Digital And Traditional Search Are Top Performers.
According to Thrive Analytics’ Local Pulse Survey, the top-rated media by performance for Home and Auto Emergency services were company websites at 35 percent, Print Yellow Pages at 28 percent, Social Media at 19 percent and Newspapers at 18 percent. SMBs rated SEO and SEM a combined 27 percent, and Internet Yellow Pages adds an additional 15 percent to the print Yellow Pages number.
The marketing where SMBs expect to grow most are email marketing at 34 percent, websites at 32 percent, SEO at 29 percent, and social media, direct mail and newspapers at 28 percent.
Source: Thrive Analytics
While a company’s website was rated the most effective marketing method, its success depends heavily on other marketing methods in getting found. Many other media, such as social media, Google search results and internet Yellow Pages, all direct traffic to the website.
Since traditional media still play an important role for this business profile, taking away marketing dollars from these marketing methods to apply elsewhere may cause an overall decrease in ROI from marketing. The better strategy would be to use expected increases in marketing spend towards growth areas such as SEO and email marketing.
2. Social Media Is Being Used, But Not Effectively.
The Local Pulse Survey reported that 68 percent of Home and Auto Emergency-Related Service SMBs have some type of social presence. This presence reflects the public’s huge consumption of social media. ComScore reports in its 2015 US Mobile App Report that Facebook is the top smartphone app in total time spent by almost half of its user base and is in the top three apps for 80 percent of users. The average mobile user spends a whopping 26 hours a month on social apps.
Thus, SMBs’ desire for a social presence is being driven by the perception that the significant amount of time spent by consumers on social media makes it a free and productive source of marketing leads. Thrive Analytics reports that 60 percent of these SMBs have not tried a paid campaign on social media. Instead, they set up free home pages, expecting it will generate leads (60 percent), engage customers (40 percent) and generate brand awareness (28 percent).
But these expectations also result in 25 percent of the SMBs feeling they’ve received zero value from social media and 32 percent feeling it takes too much time to manage.
The reason for the chasm between usage numbers and effectiveness in generating leads is that media usage does not equate to media influence. Google performed a study that demonstrated very little correlation between usage and influence. Rather, influence is achieved through consumer experience and matching your content with what consumers need or are looking for.
SMBs understand the value of social media in terms of its scale. But they often need help understanding how to use it to make it an effective local marketing tool. While the platform itself might be free, as with many things, you get what you pay for. Social media takes time and commitment to make it useful in the areas that SMBs want: lead generation, engagement and brand awareness.
Since so many SMBs have an existing, albeit stagnant, social media presence, this is an area where marketers can demonstrate how their services increase ROI through benchmarking of before and after results. Active social media management may also support other marketing strategies, including local search and SEO.
3. SMBs Are Lagging In Technology Adoption.
The above data showing websites to be the highest performing media among Home and Auto Emergency Services are even more impressive when you consider that almost half of those SMBs have no websites. Only 53 percent of small businesses have websites, a slight increase from 2014, and only half of those have a mobile strategy. Further, only 37 percent accept mobile payments, and only 36 percent use CRM tools to track leads.
Perhaps many are relying on free enhanced listings or free pages on social media platforms, given that more SMBs in this group have a social media presence than a website. Pages on sites like Yelp and Facebook may be promoted via other forms of marketing, such as local search and email campaigns.
However, Local Search Association surveys show that 50 percent of consumers are extremely likely to look at websites when searching for a local business, product or service. Further, another survey shows 67 percent of consumers want improvements or mobile optimized sites from those businesses.
Businesses that fall into the above profile need help in adopting digital media strategies to sustain long-term viability and growth. Failure to do so will result in declining market share and reach. Only 25 percent of businesses in this segment are mobile-ready, despite the fact that most Americans use mobile devices to search for local businesses and services, and not having a mobile site hurts other marketing strategies like local search and SEO. Agencies and marketing service providers must help SMBs understand how digital marketing strategies overlap and impact one another.
4. Repeat Business Is A Top Priority.
The areas of marketing where SMBs in the Home and Auto Emergency-Related Services category expressed the greatest need for help were loyalty management and traditional media. In Thrive Analytics’ survey, with an index of 100 being the average across all business categories, SMBs in this business category scored 120 points in loyalty management and 109 points in traditional media as areas where they need the most help.
The importance of these two areas to this business segment appears to indicate that return customers or regular customers are highly valued. Loyalty management focuses on improving customer retention, securing long-term loyalty and prioritizing services to needs of existing clients.
For similar reasons, SMBs have a strong interest in maintaining traditional advertising where past customers found the business.
Businesses in this category deal with wear and tear. Tires wear down, appliances break down, air conditioner parts wear out and homes or cars need maintenance. Inevitably, the time will come when customers need help with that service again.
Keeping customers satisfied and knowing when they are not is key to maintaining return business. Regular communications and reminders to keep the business or brand top-of-mind are important to make sure searches for the business are narrow or specific in scope so that the business will show up in search results.
Also, marketing strategies for attaining new customers should focus on long-term customers, as opposed to one-time shoppers.
5. The Value Of Fresh Content Is Misunderstood.
Those in this SMB business category scored significantly below the index average in wanting help in the areas of social media (63), content marketing (78) and websites (83). The numbers are surprising, given that the SMBs expect websites and social media to be among the areas where they expect the most growth in media spend. (See above point #1.)
The relative lack of interest in content marketing alongside those content-dependent media means that little is being spent on updating websites and social media pages.
Further, Thrive Analytics’ survey found that over half of websites are created and maintained by a family member or friend. Sixty percent of content by “do-it-yourself” SMBs only gets updated every six months or more. The infrequent updates are likely due to the fact that 64 percent of SMBs expressed that the biggest challenge with digital marketing is time and knowledge to engage in effective marketing. These numbers point to media spend on advertising that drives traffic to stale content.
It is clear that these SMBs need to be educated on the importance of keeping content fresh and engaging. Last month, I noted the widely held opinion among marketers that content marketing is currently the most important digital marketing trend. Fresh content boosts SEO, impacts the effectiveness of your website, engages audiences on social media, updates enhanced listings and keeps audiences coming back for more.
With 64 percent expressing that it is not money, but time and knowledge that are obstacles to effective marketing, the low priority and media spend given to content marketing can be changed if SMBs are properly educated on its value.
Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.