What Consumers Want from Local Businesses

Small businesses have been competing in a defensive posture for most of the past two decades. Competition from corporations and chain companies have made it difficult to attract customers and compete on price. But, small businesses are thought to have an advantage that their larger competitors simply cannot match: customer intimacy. Small businesses often avoid having distance put between them and customers.  Decision makers, including business owners can frequently be found on the front lines serving customers. In contrast, key personnel in larger firms may become removed from direct customer interaction because of greater demands on their time to perform administrative duties. So, small businesses will be able to battle their deep-pocketed competitors as long as they turn on the charm through customer service, right?

Hard versus Soft Traits
Not so fast- it appears that consumers are not as enamored with “touchy feely” interactions with small businesses as we typically assume. An annual survey by BrightLocal, a SEO agency specializing in local businesses, found that the customer service advantage local businesses are presumed to be able to realize relative to larger competitors may not be so important to consumers. When asked to name up to three “reputation traits” influence choice to patronize a local business, the top responses were:

  1. Reliability (71%)
  2. Good Value (45%)
  3. Expertise (36%)

And somewhat surprising were criteria at the bottom of the list:

  1. Friendliness (8%)
  2. Courtesy (5%)
  3. Localness (5%)

Local SEO chart about which reputation traits are most important to a local business

Source: http://www.brightlocal.com/2013/06/25/local-consumer-review-survey-2013/, accessed June 27, 2013

The findings suggest consumers are interested in functional criteria related to performance and benefits received for price paid. The low importance attached to friendliness and courtesy is a blow to the notion that those traits are potentially the most potent differentiators that local businesses possess.

Don’t Change, Just Get Better
Hopefully, local business owners will not look at the LocalBright study’s findings and make a strategic choice to forego friendliness in order to focus on enhancing reliability, value, and expertise. The personal touch that local businesses can offer is valuable; it is just not valuable enough on its own, evidently. I was surprised at the findings initially but then thought about my experiences with local businesses as a consumer. Being local and even being friendly cannot compensate for businesses whose products or services are not as good as competitors. Local business owners may be our friends or neighbors, and they embody the American entrepreneurial dream. But consumers are not willing to subsidize the dream; they have expectations about the competence local businesses should exhibit and value they offer.

BrightLocal – “Local Consumer Review Survey 2013”

Brand Love: It’s not What You Think

Marketers talk a great deal about developing relationships between their brands and customers. The underlying assumption is that we can equate brand relationships that people have with interpersonal relationships. Are brand love and interpersonal love the same? Are the characteristics of a brand that attract customers to fall into love with a brand similar to the characteristics that attract people to each other?

These issues were examined in research performed by Rajeev Batra, Aaron Ahuvia, and Richard Bagozzi published earlier this year in Journal of Marketing. A series of three studies identified elements of brand love that ultimately yielded a three-factor model:

  1. Passion-driven behaviors (e.g., desire to use brand and past involvement with brand or company)
  2. Self-brand integration (e.g., brand matches current and desired self-identity; intrinsic benefits more important than extrinsic rewards)
  3. Positive emotional connection (e.g., emotional attachment and positive feelings or mood elicited by brand)

A contribution made by this research is that a distinction was made between brand love as an emotion felt by consumers and brand relationships exhibited by the behaviors of customers and clients. The latter is realized by tapping into the power of the former. Affinity held for a brand can be a catalyst for deepening one’s integration of a brand into his or her life. Thus, feelings of brand love (i.e., the emotion) cannot be equated with desired buyer behaviors like repeat purchasing and positive word-of-mouth. However, when brands leverage emotions to strengthen customers’ bonds with a brand it can be a catalyst to creating true love… brand love, that is.

Don’t be Seduced by the Data

As a college professor who has watched textbook prices increase at rates greater than inflation for several years, I am very interested in alternatives to delivering vital content without costing a small fortune. Digital textbooks in particular seem to hold great potential as technology improves to deliver content to tablets and smartphones and prices of e-readers decrease. The combination of high prices for print books and development of digital formats would appear to set the stage for a textbook revolution. In fact, there are data to suggest that is the case.

A recent survey of college students sponsored by Kno Inc., an educational software firm, provided an eye-popping statistic about their willingness to adopt digital textbooks: 25% said they would give up sex for a year in exchange for never having to carry bulky textbooks around campus. Whoa! Time to usher in the era of digital textbooks; a significant segment of the textbook buying market has indicated a high level of interest in being able to shift to digital books. Not so fast- all we know at this point is that some students would rather exert less effort on carrying textbooks than having sex.

The findings on college students’ views on print and digital textbooks do not quite match with reality. Despite being available for several years, digital textbooks have yet to be adopted on a wide scale. Digital books’ share of the textbook market is below 10%. Furthermore, only about 2 in 10 college students currently own an e-reader, which is a limitation on mass adoption of digital books. It is possible that digital textbook sales will take off. Personally, I am hopeful that the quality of the digital product will continue to improve and be able to offer students an enhanced learning experience at a good value.

Don’t be seduced by the data; examine research findings critically to evaluate the extent to which consumers’ intentions mirror reality. A gap often exists between what people say they will do and their actions. In the case of the textbook study, I can understand why students would express a desire to not have to tote clunky textbooks on their backs if alternatives were available. But, realities such as inferior digital offerings and lack of owning needed hardware like a tablet or e-reader means that most students will maintain status quo. When data give great hope, cautiously embrace the opportunity. However, seeing is believing; so watch out for data that portrays a mismatch between stated intentions and actual behavior.

eCampus News: “‘Sex vs. Textbooks’ Survey Doesn’t Jibe with Student Preferences”

Evaluating Service Performance is no Mystery

As someone who spent time in retail management and even more time as a marketing researcher, I am a proponent of mystery shopping. Enlisting persons to assume the role of a customer or shopper to evaluate a service provider’s performance gives an unfiltered view of employee performance. In a retail setting, mystery shoppers can assess touchpoints of the service encounter such as how quickly they are greeted (if greeted at all), salesperson’s product knowledge, selling skills demonstrated, closing attempts, and transaction execution. Findings can be used to give positive feedback to employees who are observed demonstrating desired behaviors or to give coaching to employees who do not meet expectations.

Recently, Sports Business Journal ran a story about a study by IntelliShop of ticket sales employees for Major League Baseball teams. Mystery shoppers were used to evaluate salespersons’ attempts to build a relationship with someone calling to inquire about tickets as well as whether the customer was invited to visit the ballpark to learn more about season-ticket options. The study was not sponsored by MLB, but one would think it would be very interested to know how its teams fared in terms of serving potential ticket buyers. Apparently not! A MLB spokesperson quoted in the article said “While I haven’t seen all of the data, I think anyone would question the results of a survey where the research company aggressively solicited more than two-thirds of the league to forge a business relationship. They are incentivized to demonstrate a need to teams, one that they can fill. It is a clear conflict of interest.”

I assume that the MLB spokesperson has neither worked in marketing nor has a grasp on the concept of a mystery shopper. Question the results? Clear conflict of interest? The spokesperson’s dim view of the survey’s findings may be attributed to some teams scoring very low in terms of: 1) percentage of mystery shoppers invited to visit the ballpark and 2) salespeople’s efforts to build rapport with mystery shoppers when they called. Instead of taking a defensive posture, MLB teams should embrace the data… especially since they did not have to pay for it!

Mystery shopping is a valuable market research tool for uncovering strengths and weaknesses, individually and organizationally, in delivering outstanding customer service. Rather than feeling compelled to engage in PR-speak when results are less than ideal, MLB and its clubs should be thrilled because they now have insights into how their ticket sales personnel’s interactions with buyers are perceived. In effect, mystery shopping removes the mystery of identifying areas of improvement in enhancing the customer experience.