The Global VC

Local Businesses Are Your Friends … And Customers

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500 Global Team

500 Global Team






This Growth guest post comes from Rick Kawamura at LocBox, a company that helps local businesses grow by providing end-to-end online marketing tools and services. LocBox is a 500 Startups portfolio company.

Many of us in the “startup world” lump small-to-medium sized businesses and local businesses into a singular market, ready to be automated and conquered.

In reality, SMBs and local businesses make up a promising but highly diverse market of customers — not archaic competitors — that most startups haven’t even begun to tap into.

In this post, we’re going to share the 24 questions we used at LocBox to begin to filter and convert high-quality leads in the lucrative, but elusive, SMB and local business owner market.

The Elusive Local Business Owner

First thing to know: Local Business owners are busy.  They founded their businesses often out of a passion for their trade — they love cooking, styling hair, or martial arts.

They are often unprepared for the parts of their business that fall outside of the trade itself — accounting, operations, finance, sales, or marketing. Inevitably, they find themselves swamped with the daily tasks of running their business that take them further and further away from their passion.

The second key to understanding LBOs has to do with spending.

LBOs spend money like it’s their own, and often charge business subscription fees or services on their personal credit card.  They scrutinize their purchases and check their credit card balances every month and manage cash flow stringently.

Third, with most local businesses, getting through to the business owner can be difficult. They’re typically protected by a very well-trained front desk staff suspicious of cold-calling, well-intentioned marketing consultants and software companies.

Finally, know that many local businesses receive hundreds of unsolicited emails and calls monthly for software solutions, consulting services, daily deals, and advertising opportunities.

What exactly is a “Local Business”?

The common misconception is that a Local Business is simply a smaller scale SMB operating locally. But let’s take a closer look.

Consider a 50-person B2B SaaS company in Austin vs. a day spa in San Francisco with 6 employees.

The SaaS company has a CEO, several VPs and Directors, engineers, sales reps, marketers, and staff, all active on Linkedin and found in, Radius, or Hoover’s databases.

The Day Spa has a business owner, front desk staff, and a handful of estheticians, none whom are on LinkedIn.

When you do find contact information for local businesses, it’s often only a generic email address such as, a far cry from the rich graph of data you’d find for the SaaS company’s employees.

A Local Business is generally defined as being locally owned and serving a local population.

So this eliminates ecommerce companies other businesses focused on selling to non-local customers, whether those are SMBs or others. And as pertains to investors and start-up executives, let’s also eliminate sole proprietors (no employees) and business owners who don’t have a store-front (hair stylists renting a station).

Even with this narrower definition of a Local Business there are multiple micro-segments of markets.  Consider a Nail Salon in Portland versus a Restaurant in NY versus a Plastic Surgeon in LA.  How you find, market to, and connect to these different segments will vary greatly.

How do you begin to get to know and appropriately filter this disjointed market where blanket SMB and B2B marketing isn’t going to cut it?

24 Qualifiers for Finding High Quality Local Business Leads

You can grab a decent amount of info on your lead targets through web research and common sense. At LocBox, we found it helpful to structure our approach using the following 24 qualifiers as a starting point for understanding the LBO customers we were looking to reach.

1. Do they have a website?

2. Do they offer gift certificates on their website?

3. Do they offer specials on their website?

4. Are they using a reservation, appointment, or calendaring system?

5. Do they have a blog?

6. How often do the blog?

7. Do they get comments on their blogs?

8. Are they on social media?

9. How many fans, followers do they have?

10. How well do they engage their followers and fans?

11. How often do they post or tweet?

12. How many response actions (comments, likes, and shares) do they get?

13. Do they have an online reputation and are they actively managing it?

14. How many reviews do they have?

15. What’s their rating?

16. Are they advertising or paying for services?

17. Do they do email marketing?

18. Have the tried Daily Deals?  Do they continue to do so?

19. Do they have an ecommerce function?

20. What’s their site traffic (estimate)?

21. Are they doing paid advertising?

22. What types: Google, FB, retargeting?

23. What does their funnel look like?

24. Some “predictive” companies claim to have compiled over 1000 data points. Of all the data you end up gathering, which “predictors” best help you determine that a potential lead is a good fit for your sales model?

The Local Business Market Opportunity – Go Micro

We find that with many executives we interview, investors we pitch to, or other startup founders we network with, the local business opportunity is still not a well understood market.

Many see SMB as a singular market encompassing local business, when in reality it’s a collection of many smaller verticals, each with unique needs and pain points.

For example, Local Business Owners don’t necessarily consider themselves local businesses. A restaurant owner is much more likely to search “restaurant marketing ideas” and very unlikely to search “local business marketing ideas.” The same holds true across categories, with Spas, Dentists, Salons, etc. each searching for their own business solutions by category.

Startups take note:

This should be guiding how you choose keywords, media channels, influencers, digital hangouts, etc. to find the right leads and start building that relationship.

What’s the solution, then?

Sharpen your everything — positioning, messaging, CTAs — on a micro level so they make sense to the pain points of LBOs you want to reach.

Here’s something to look out for that can save you some time: a lot of the pain points can be similar within a category (ex:  Spas using MindBody Online or Dentists using DemandForce) or there can be similarities across categories based on behavior (frustrations with having run a Groupon or dealing with negative reviews on Yelp for example) where one can build value propositions for a service or solution.

Focus on pain points on a micro level, don’t assume all local businesses are the same, and make more friends!

This guest post comes from Rick Kawamura, VP of Marketing at LocBox. Learn more about LocBox here.

500 Global Team

500 Global Team