The New York Times recently published an article that explores what many local service providers have been experiencing for months.  The market for local services – like the overall economy – is definitely in decline.  More people are choosing to forego services or take a do-it-yourself approach, instead of patronizing local businesses.  Hair is getting cut or colored at home.  Dogs are getting bathed in the family bathtub.  Homeowners are trying their hand at minor repair and maintenance projects.

The Times suggest that many local service providers won’t survive.

Call me an optimist, but I think the current environment presents an opportunity.  Certainly, there remains a large segment of the population that want or need these services – and perhaps now more than ever.  Maybe someone in the family recently picked up an extra job or is working extra hours to help cover costs and now they don’t have time (or energy) to cut the kids’ hair, bathe the dog, or fix the leaky faucet.

With competition heating up for a shrinking number of prospective customers, I believe local service providers have an opportunity to reach new customers and strengthen relationships with existing customers.  Here’s how:

1. Innovate – Try to understand what factors – other than price – may be affecting customer buying decisions.  Offer customers new or modified services that make it easier for them to continue to patronize your business (longer or different hours, pick-up/drop-off, in-home services, etc.).  Consider partnering with a complementary service provider to offer service bundles that better serve your customers’ needs.
2. Discount – Offer pricing and bundling that shows your customers that you understand the economic challenges they face.  Discounted service bundles (e.g. “buy x, get one free”) are a great way to give customers a price break in exchange for their loyalty.  Discounts for referring a friend will turn your existing customers into a virtual sales force.
3. Promote – During tight times, many businesses cut back on marketing in order to lower costs.  This provides an opportunity for remaining advertisers to rise above the usual din and reach more prospective customers.  Advertisers may also be offering discounts and specials to attract your business.

I believe that local service providers who are successful at techniques like these will not only survive – they’ll thrive.  And they’ll have a strong base of loyal customers in place once the economy starts to turn around.

A recent study by WebVisible and Nielsen found what they called a “great divide” between what consumers are doing to find local businesses and what those businesses are doing to reach them.

The study found that 63% of consumers turn first to the internet to find information about local businesses and that, at some point during their search, 82% and 49%, respectively, end up using online search engines and internet yellow pages. And the trend toward online resources is accelerating with 72% of consumers using search engines more today than they did two years ago.

Local businesses, on the other hand, have not moved online at the same pace as consumers. The study found that only 44% of local businesses have a website and half spend less than 10% of their marketing budget on internet advertising and nearly one-third do no online advertising at all.

But here’s the big conclusion drawn by the authors of the study: 92% of consumers are happy with the results of search engines while 39% report frequently not finding a particular known business, leading the authors to conclude consumers are searching for a particular known business but then choosing another similar business with a stronger online presence.

We previously discussed another ‘great divide’ that exists between local service-oriented businesses and consumers online. A study by Deloitte found that 72% of health care consumers want to schedule appointments online, yet only 10% of those consumers report ever having the opportunity to book an online appointment.

But here’s the good news: local service-oriented businesses can bridge both of these divides by establishing an effective online presence and then optimizing that presence by pointing found consumers to online booking pages. We previously touched on this and will continue to discuss how Full Slate can play a key role in closing the ‘great divide’ between you and consumers online!