From the June 2001 issue of Entrepreneur

Although most entrepreneurs think of their Web sites as vehicles for getting new customers-from far corners of the world, no less-many end up neglecting a market with even greater potential: the one right around the corner. After all, local customers live and shop near your business. Why not reach out to them, too?

At least the trend is starting to catch on. According to the "Local Commerce Monitor," a survey of businesses in Princeton, New Jersey, conducted by Constat Inc. and The Kelsey Group, entrepreneurs who said the Internet would help their businesses compete on a larger geographic scale dropped considerably between 1999 and 2000.


65%
of Web shoppers in the Middle East/Africa will buy from foreign sites, compared to just 39 percent in Eastern Europe.
SOURCE: Accenture

"Businesses are realizing they don't want to compete globally," explains Neal Polachek, a consultant and senior vice president of research for The Kelsey Group. "They want to be more effective and more efficient competing where they've always competed, which is locally." In fact, the survey also points out that 80 percent of small businesses do at least 75 percent of their business locally (within 50 miles of their businesses)-whether it's selling directly to customers or buying products and services their companies need.

Getting Attention

Whether you emphasize community flavor or encourage patrons to drop by your neighborhood store, localizing your site gives current customers a better reason to choose you over larger online competitors. Bud Matto, 37, is just one entrepreneur finding success with the strategy: As founder of Matto Cycle, a Pottsville, Pennsylvania, motorcycle and all-terrain vehicle parts vendor that sells products online and off, Matto goes out of his way to use his site to target local customers.

Although Matto's initial intention was to reach a global audience, he also realized the importance of localization. "[The site] gives our fairly large local clientele the option to order a product online and have it shipped to them instead of having to drive an hour to the shop and an hour back," Matto explains.

To further enhance his local following, Matto recently began advertising on Schuylkill.com, the online version of his local newspaper, the Republican & Evening Herald. The Herald placed on its Web site a banner ad that went to Matto's own Web site, which the newspaper had helped create. The move has paid off well: Since Matto began advertising with the newspaper, online sales have more than doubled.

Local Partners

RIP hundreds of dotcoms have kicked the bucket, with more on the way. Here's a quick look:
DotcomReason(s) for failure
APBnews.comOffering free content didn't draw in large audiences or big ad dollars; focus of content was too narrow for its general audience.
Beautyjungle.comCouldn't raise funds. Despite high margins and high demand, the sensory experience of buying cosmetics at the beauty counter was lost online.
Boo.comPoor money management, heavy perks, too much cash burned on technology development and branding/marketing campaigns, and too many offices opened.
CarOrder.comBrokering cars online meant low profit margins and high costs.
Furniture.comFew people buy home furnishings online; competitors J.C. Penney and Sears already had home-delivery networks in place.
Miadora.comLuxury jewelry is a hard sell online-customers demand stellar service, which isn't available online.
Mortgage.comThin margins and high customer-acquisition costs.
Pets.comInability to compel customers to buy pet food online.
Quepasa.comRan out of money, decline in Internet advertising rates, spent a lot on building its brand but generated little revenue.

One of the easiest ways to localize your site is by taking advantage of the variety of local services available. For example, aside from helping companies set up Web sites and offering to place banner ads, many local newspapers now also feature online shopping malls. StarNet, the Web version of the Arizona Daily Star in Tucson, Arizona, for example, offers this option. For an initial setup fee of $3,800 and monthly fees starting at $99, entrepreneurs can establish their Web sites and also be prominently featured on StarNet's shopping mall, eshoptucson.com. The home page of each participator is linked directly to the online mall, which is viewed by a whopping 248,000 visitors every month.

Koz, a Durham, North Carolina, company that creates and empowers online communities and marketplaces, also partners with newspapers to build local shopping portals that in turn allow merchants to build co-branded Web sites. Koz's paradigm, which is being used by more than 400 local newspapers, works like this: Koz sets up an online marketplace or mall for the local newspaper, and then the newspaper's adverstising sales force resells Koz's Web-site-creation services to local advertisers and companies. Koz then establishes a Web site dedicated to local entrepreneurs. The cost to those business owners? Less than $100 per month.

You can also reach local customers via local portal sites, which consumers use to find community information. Ticketmaster's Citysearch Inc.'s Citysearch site, for example, offers local guides to major cites worldwide, focusing on entertainment, restaurants, services and shopping. It also provides companies a way to target local customers. For example, entrepreneurs can be listed on Citysearch's Yellow Pages for about $35 per month or work with the company to build their own comprehensive Web sites-costs start at $1,000, plus a monthly fee of $500. Other local portals include Yahoo! Get Local and Digital City, a unit of AOL.

"Intelligent entrepreneurs are doing everything they can to meet the needs of their local customers," says Polachek. "They're launching promotions on their Web sites to reach local customers, doing e-mail marketing and even allowing their customers to set up appointments for their services on their Web sites." In other words, succeeding locally depends highly on how effectively you get the word out to customers. No big surprise there.


Melissa Campanelli is a marketing and technology writer in Brooklyn, New York.


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