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What Do Customers Want from Local Businesses?
by Rieva Lesonsky
April 29, 2022

When you’re a small business owner competing against the big guys, it’s easy to feel like the deck is stacked against you. But a new survey of over 6,000 consumers nationwide suggests it’s just the opposite.

Customers trust and use local businesses, and even prefer them to national chains.

More than eight in 10 consumers (82 percent) currently use local businesses, and in the next year, 48 percent plan to patronize local businesses even more often. (Fewer than 1 percent expect to use local businesses less often.) In fact, consumers use local businesses more often than national chains. In the last 12 months, local businesses accounted for 56 percent of total business use, compared to 44 percent for national chains. Consumers also use local businesses a lot — 83 percent of respondents have done so in the last week.

Consumers aren’t turning to local businesses out of necessity, but out of preference. The survey asked respondents to judge whether local businesses or big businesses have each of the following qualities.

Here’s what people said local businesses offer:

  • More personalized service: 96 percent
  • Being trustworthy/treating me fairly: 91 percent
  • Customer service: 80 percent
  • Delivering quality work: 86 percent
  • Being reliable/delivering what’s promised: 79 percent
  • Having professional staff: 75 percent

National chains outperform small businesses in only two areas: 70 percent believe national chains are more likely to have a stable business, and 77 percent say they offer more competitive prices. Still, 72 percent of respondents are willing to pay more to get the quality service they believe local businesses offer.

Though local businesses are doing a lot of things right, there’s still room for improvement.

Here’s what customers want to see that local businesses aren’t delivering:

  • Online reviews: 76 percent want to see online reviews for local businesses. Consumers are turning to reviews and social media more often to find companies, and they expect to see reviews they can use to make buying decisions.
  • Easy-to-use websites: Website improvements are the top change respondents want to see in local businesses in the coming year.
  • Special offers for returning customers: According to the survey, this is the top way local businesses can differentiate themselves from competitors. Nearly half (49 percent) would like to see more specials, deals, and offers (and 20 percent say they’ve seen businesses adding more special offers in the past year).
  • Self-service: More than one-fourth of respondents want to book appointments, manage billing and make payments to local businesses online.
  • More frequent online communications: Consumers want to get the following communications from local businesses:
    • Service/appointment reminders: 84 percent (38 percent currently receive these)
    • Advice/helpful tips: 80 percent (26 percent currently get these)
    • Business/service updates: 76 percent (19 percent currently receive these)
    • Survey requests for feedback: 67 percent (13 percent currently get these)
    • Personalized communications: 65 percent (15 percent currently receive these)
    • Invitations to events: 63 percent (12 percent currently get these)
    • Newsletters: 60 percent (15 percent currently receive these)

Clearly, there’s a lot of room for improvement in how local businesses communicate with their customers.

Here are five steps you can take to stay ahead of the pack.

  1. Update your business website. Make sure it looks current, is easy to navigate, and has the basic information customers are looking for (address, phone, hours of operation, prices, services). It should also be mobile-friendly since many customers do their research on their phones or tablets.
  2. Start an email newsletter. Multi-task by sending your customers a monthly newsletter with advice and helpful tips, updates about your business, new services you're offering, and special offers or deals.
  3. Get personal. Use customer relationship management (CRM) software to send personalized emails after you provide service to a customer. Thank them for their business, and ask them to take a quick online survey so you can get feedback about how well you’re doing. You can also do this by phone if you have customers who prefer to talk live.
  4. Always ask satisfied customers to review your business online. A whopping 89 percent of respondents say they’re willing to do this, but just 7 percent have ever been asked. Worried about negative reviews? Don’t be 80 percent of people who have ever posted an online review were prompted by positive experiences.
  5. Enable customers to make appointments online. This is simple to do and can reduce your staffing needs, too. Microsoft Bookings, BookedIn, TimeTap, and AppointmentPlus are a few appointment-scheduling options to investigate. Of course, you should still provide the option for customers to make appointments the old-fashioned way, by phone, if they prefer. It’s all about choice.

Need more help tapping into your local business advantage? Talk to your SCORE mentor for insights and advice. 

About the author
Rieva Lesonsky
Rieva Lesonsky is president and CEO of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, and the blog
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