The Business of Hyper Local
This email originally appeared in the June 27th edition of The Scribble, KYC's bi-weekly marketing newsletter. You can subscribe to The Scribble at the top of this page.
Hyper local is becoming a very popular term these days, whether it’s in reference to business, marketing, politics, entertainment - we’re hearing it used in a lot of different places.
Over the weekend I realized just how important local emphasis is in the growth of the craft beer industry. A number of breweries here in New England have opened second locations over the past couple years. But these aren’t second locations that expand their geographic reach. They’ve been new facilities within the same state as their first. Ten years ago, even five years ago, I think this would’ve been unheard of. Expansion in beer meant growing beyond your current geographic footprint, definitely growing beyond the state you currently operate in. Of course, at that time expansion in beer was reserved for the biggest brands: Sam Adams opening a second facility in Cincinnati, Sierra Nevada opening a second in North Carolina.
But now we’re seeing something entirely different. Breweries are opening new spots that are, in some cases, less than 30 miles from their original. In a few circumstances, the second location is merely across town from the first.
Austin Street, Bissell Brothers, Jack’s Abby, Lone Pine (KYC client), Mast Landing, Night Shift, Oxbow, SoMe, and Trillium all have opened second locations within the same state as their first, or have a second location under construction. I’m sure there are others I’m just not thinking of off the top of my head.
This isn’t just a New England phenomenon either. KYC has clients in Boise (Barbarian Brewing) and Portland, Oregon (Von Ebert Brewing), that operate two facilities that are relatively close.
Why are so many breweries taking this approach?
They’ve decided to go deep in their backyard rather than go wide. It’s a hyper local play. Many have realized that there are still opportunities to convert new customers within their own state or region, as well as opportunities to increase loyalty and advocacy among current customers. The beer industry is a game of two approaches right now: local loyalty through taprooms and broader reach through distribution. Hyper local is taprooms.
I should state that a number of the breweries I mentioned above are also taking the approach of broader reach through distribution, expanding into new states using that route. But that’s to complement their hyper local expansion. They see the value in both, but I’d say I’m seeing more breweries go the hyper local route of adding a second geographically close location rather than the approach of expanding distribution into new states. In fact, of those breweries mentioned earlier, Oxbow actually has three locations within the same state, and rumor is one of the others is eyeing a third as well.
Is that what we’ll see next? Those breweries with two spots continuing that trend and opening a third? It’s possible, but two widely seen as the leaders in New England may give us a clue as to what’s next. Tree House and Trillium, both located in Massachusetts, recently made purchases in Connecticut. Perhaps we’ll see hyper local expand just a bit to regionally local.
Hyper local isn’t exclusive to beer though. It can be a successful strategy and is something for all businesses to consider even if you don’t take a physical presence approach like breweries are doing. A digital approach can work, especially when combined with physical sales tactics. So can a content approach, with a focus on local elements. As a note of caution though, I encourage you to really think through if you can successfully use hyper local as a strategy. Namely, do you have the local knowledge to set yourself up for success? Here’s a story that shows how it can go wrong if you attempt it, but can’t follow through:
KYC works with a decorating center and paint store in Malden, Massachusetts, and Yelp has been very persistent in trying to get them to run paid programs on the platform. It hasn’t been a priority for us because their customers just aren’t using it. To allocate money toward a Yelp program, we’d have to take money away from tactics that have been working better. And to be honest, if we had money in the budget, we’d most likely put it toward Houzz, a platform much better for a decorating center and paint store.
I took a call with a Yelp rep last week where he used some pretty strong, aggressive sales approaches to convert me. At one point, he started explaining how other companies in Middlesex County, the county this client operates in, were showing up higher in Yelp searches because they were running paid campaigns. He specifically cited three businesses, one in Lowell and two in Acton. If you’re familiar with the Greater Boston area, you’ll know that those two cities are pretty far from Malden. No one in the Malden area would drive to either of those cities for paint. Our client is losing zero business to these ‘competitors.’ In an attempt to take a hyper local angle, this Yelp rep actually defeated himself.
When using hyper local strategies that don’t involve a physical presence in a city, it’s most important to show you actually know that area. Have a feel for the people, the businesses, what’s popular, and what’s not popular. If budget allows, travel to that area and spend some time there. Talk to locals in your industry. With all the digital tools at our fingertips, there are some really easy ways to create hyper local campaigns that align with your sales efforts.