January 19, 2022
As national brands make a mad dash to digital marketing, local companies have fallen woefully behind. They are the great unwashed at a time when digital channels of customer engagement have emerged as the most important routes to revenue.
Truth is, many big brands don’t realize how much their local partner channel brings in. There’s a disturbing lack of data. Suffice to say, it’s probably more than you think. In a report released this week, BrandMuscle says local partners can account for up to 80% of a national brand’s sales.
When local partners stumble, a national company’s top line takes a tumble, too.
Consider the enormity of the local partner network: distributors, wholesalers, retail stores, branches, dealers, agents, franchisees, field offices, resellers and merchants. Most of them, especially the smaller ones, desperately need to shore up their digital marketing channel.
So why don’t big national brands take better care of their smaller local partners? There are a lot of reasons, let me count the ways.
For starters, national brand marketers have set their sights, as well as their local partner channel programs, on helping the handful of big boxes. The thousands of small local partners are left to fend for themselves. The thinking goes, national marketing efforts that result in a lift for local big boxes bring measurable results and brand prestige, whereas efforts to lift sales at small businesses often get lost in the ether. If it’s not measurable, it’s not a priority.
It’s also time-consuming to lend a helping hand to thousands of small businesses, especially in a personalized way. Marketers at national brands need to show real returns on their efforts; they can’t be spending too much time on a single small business. The goal of providing digital marketing consulting, services, funding, tools and content that drive awareness, preference and purchase — that is, digital tactics designed for a specific local market — just doesn’t scale well.
Another roadblock is that small local partners lack digital marketing sophistication and maturity. About half don’t invest enough in mainstream marketing, let alone digital marketing. Far too many get their digital marketing advice from friends and family. They simply don’t understand how critical the digital channel has become during a pandemic that pushes people online.
While local partners know they need a good website, many fall short when it comes to other important digital marketing tactics. For instance, local partners are not very good at optimizing search and getting on Google My Business Listing. These are digital marketing’s basic blocking and tackling. It’s a major misstep considering that searches with local intent make up 46% of all Google inquiries and over 2 billion direct connections with local businesses, BrandMuscle says.
Also, local partners struggle to manage online business reviews and tap into the power of social media platforms (e.g., Facebook, Snapchat, TikTok, Youtube). BrandMuscle says 50% or more of local partners lack confidence in every major area of social media management.
Underscoring all of this is a feeling of digital disintermediation that has strained the relationship between local partners and national brands. As the pandemic drove consumers to digital channels, national brands began pouring resources into their direct-to-consumer e-commerce experience. Local partners felt, rightfully so, that they were being cast aside.
The good news for local partners is that the power of a community connection has persisted. In fact, many consumers made a concerted effort to support local businesses during the pandemic. While the increase in e-commerce made headlines over the past year, BrandMuscle says, 85% of sales in the United States still occur at physical brick-and-mortar locations.
“With the near-shutdown of travel and other lockdown constraints, localization has become even more important,” Eric Hazan, senior partner at McKinsey & Company, told me in the summer of 2020 during the first wave of the pandemic. “Marketers will need to tap into the granular data to drive and expand deeper connections with consumers by localizing their marketing campaigns and communication.”
What has changed is that the relationship between local businesses and consumers now contains a critical digital component. New buying methods blending digital and physical have emerged, such as BOPIS (buy online, pickup in-store), ROPO (research online, purchase offline), BIMBO (browse in-store on mobile, buy online) and BORIS (buy online, return in-store). The omnichannel customer experience continues to this day, which is why local partners need to deploy effective digital tactics.
As stated earlier, too many fall short with digital. To be fair, national marketers bear some accountability. Their local partner channel marketing programs often miss the mark by not including digital tactics in their arsenal of marketing tools, BrandMuscle says. Case-in-point: Only 42% of programs support social media in even limited ways.
What’s the solution? There needs to be a meeting of the minds. National marketers need to acknowledge the tremendous value that local partners bring to their top line. They can also bridge the digital divide by reaching out and offering new digital marketing tactics to local partners that will help them win and retain customers in an omnichannel world.
Local partners also should recognize that they have gaping holes in digital, commit to a digital marketing strategy, and begin to incorporate digital tactics. It’s going to be a long, steep climb. They can reach out to national brands for help, such as funds available through a national brand’s local partner channel marketing program. (Hint: millions of dollars go unused in local markets.)
Through a better understanding of digital marketing, local partners can take advantage of a national marketing team’s digital marketing tactics and spin them for their local markets. It’s high time local businesses gain ground on the road to digital marketing transformation.
Tom Kaneshige is the Chief Content Officer at the CMO Council. He creates all forms of digital thought leadership content that helps growth and revenue officers, line of business leaders, and chief marketers succeed in their rapidly evolving roles. You can reach him at email@example.com.
No comments yet.