Small Business Advertising Tips: Limit Your Geographical Reach

Advertising your small business doesn’t have to be expensive to be effective. As a matter of fact, one of the BEST way to get more from your advertising is to simply reduce the number of people you choose to target with your marketing message.  This is known as “targeting” or “segmenting” your marketing audience – and it is one of the most effective ways to get a greaster return on the advertising dollars you spend.

Begin by creating ad advertising budget.  Setting your budget as a percentage of monthly sales is a great way to allocate your advertising dollars.  If you choose this method, you’ll be spending more when you’re making more – and spending less during natural “slow” periods.

Once you have a budget, you need to decide WHERE to spend your advertising dollars.  Before you begin spending, you should first determine a goal.  What do you want your advertising to accomplish?  Simply saying, “I want my advertising to get more customers” isn’t good enough.  Begin by looking at the customers your business already has.  Once you know where you are, you can then clearly chart where you want to go.

For example, let’s say you take a look at your current customer addresses and you see that 80% of your customers live within a 5 mile radius of your business.  You can take two direction as you create your marketing strategy:

1. You can decide you want to expand the geographic reach of your business and reach customers outside that 5 mile radius
2. You can decide you want to increase the number of customers you have within that 5 mile radius.

Take a moment to reflect on this discovery.  You might want to see if there’s a reason 4 out of 5 customers live within 5 miles of your business.  Is it because people won’t travel further than a few miles to frequent businesses such as yours?   Are these people who have happened upon your business by chance or did you advertise aggressively to bring them in?

Before going any further,  take a moment to examine the metrics around that 20% of people who live beyond the five mile radius.  Do they live less than 7 miles from your location?  Are they clustered in a geographic area?  Do they share any demographic information in common?

If you’re running a coffee shop – you  might see that 20% of your customers may not live within 5 miles of your shop – but they work within 5 miles of your shop.  When it comes to coffee – you may have the greatest staff and the best coffee – but few of your customers are going to go to the ends of the earth to get a cup of YOUR coffee.

In the case of our coffee shop owner, limiting advertising to a 5 mile radius will not only reduce marketing costs but also increase advertising effectiveness.  While this strategy may eliminate a lot of advertising options, the options will no doubt prove to be the most cost effective for your business to use.

Sometimes, limiting your market geographically can be a great way to increase advertising effectiveness while also reducing costs.