Small Business Advertising Tips: Limit Geographical Reach

One of the best small business advertising tips is to limit your geographical reach.  Limiting your market geographically can be a great way to increase advertising effectiveness while also reducing costs.

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.  Targeting your audience is one of the most effective ways to get a greater return on the advertising dollars you spend.

Small Business Advertising Tips: Set A Budget

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 money, 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.  Perhaps 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. Expand the geographic reach and target customers outside that 5 mile radius
2. Try to increase the number of customers within that 5 mile radius.

Dig deeper for greater insights

Take a moment to reflect on this discovery.  Is there a reason 4 out of 5 customers live within 5 miles of your business?  Is it because people won’t travel further than that? Did these customers see your sign and stop in or did you advertise aggressively to bring them in?

Before going any further, take a moment look at what the 20% of people who live beyond the five mile radius have in common.  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 best coffee and great staff – 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.

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

Data vs Conventional Wisdom

When we launched our latest business venture, conventional wisdom said that our customers would come from within a 5 mile radius of our business.  I thoroughly embraced this because it significantly reduced our initial small business internet advertising costs. I didn’t want to waste our precious advertising dollars targeting customers who wouldn’t drive 10 miles to visit us.

Two years in, we evaluated where our customers lived and saw something interesting.  Nearly 30% of our customers are coming from more than 5 miles away.  Even more amazing is they are driving past at least a half a dozen competitors to reach us.

It turns out that our Unique Selling Proposition is exceptionally strong.  We offer something no one else in our area does.  Of course, a couple of them have adopted the slogan we use to illustrate our USP.  Unfortunately for them, when they don’t deliver on the promised USP, they end up losing that customer to us.  Meanwhile, those customers have become passionate brand advocates for us.