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Why local, local, local matters for your online business

Wharton professor gives tips on marketing your small business using Facebook, Geofencing, eBay

Mobile devices and geofence technology offer business owners a chance to harness the power of the internet and connect with local customers.
Mobile devices and geofence technology offer business owners a chance to harness the power of the internet and connect with local customers.Read moreAP

The digital world is global, but 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 through 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. In an interview, Bell gave a range of tips involving the potential of social media, short videos and using the internet to tune up your business' processes.

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, such as 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 potential customers, through their mobile phones, that they are steps away from a store that sells the product they seek.

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

Once customers have 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 that harnessing the power of the internet can be daunting, but, in some ways, it requires an attitude shift.

"Your entire business can be upended 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 in to the digital market, an entrepreneur should analyze each aspect of the 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. Yahoo and eBay offer similar services.

Social media require 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 has her own YouTube channel and marketing deals with some of the major cosmetics houses, Bell said.