The Local Multiplier Effect

An article recently published by the American Independent Business Alliance (AMIBA) shed light on the importance of small businesses communicating the positive impact they have on local economies. Referenced as the “local economic multiplier effect“, the effect is a result of a greater percentage of revenue circulating through a local economy when money is spent at local businesses.

Research from Civil Economics states that the impact can come from three factors: direct, indirect, and induced impact.

Direct impact occurs when money is spent by local businesses to operate the business.
Indirect impact occurs when money spent by a local business at other local businesses re-circulate.
Induced impact occurs when consumers such as employees, business owners, and others spend their money in the local economy.

Such studies have taken place in Austin, Chicago, and Grand Rapids. On average, 48% of each purchase at a local business recirculated locally while less than 14% of a purchase at a chain business recirculated.  It is important to note that percentage values do vary by the size of the local economy. The information garnered in these studies is that purchases through local business do contribute more funds towards creating jobs and wealth in a local economy as opposed to chain-operated businesses.

The Local Multiplier Effect at Retailers - click to enlarge

The Local Multiplier Effect at Retailers – click to enlarge

The Local Multiplier Effect at Restaurants - click to enlarge

The Local Multiplier Effect at Restaurants – click to enlarge

(Images via AMIBA.net)

As the “Shop Local” movement continues to gain momentum across the country and in Raleigh, it is important that local businesses should take advantage of these findings. They can calculate Raleigh’s “local economic multiplier” for various supplies to determine the amount that is returned to the economy. It is also a good idea for businesses to promote these findings in an accurate yet memorable manner so that consumers are driven to spending money locally. Using advertisements and messages that are heavily ridden with percentages and statistics and are not linked to reliable sources are less likely to remain in consumers’ minds for long.

New Facebook Feature: More Local Pages You Might Like

To be honest, this may not technically be new, but it is the first time I’ve seen this feature, personally. Facebook often rolls out new features and functionality in waves to different users, so I’m curious – has anyone else seen it, yet?

Facebook Feature - More Local Pages You Might Like

Facebook Feature – More Local Pages You Might Like

A few thoughts follow – as scattered as they might be:

  • Anytime I see something “new” on social, I wonder, “what can we (marketers, publicists, online marketing people) do with this?”
  • Can we do some positive PR and leave a nice comment on the wall of a new page we found and say “Hi, I’m here because Facebook thought I might like you since I liked (insert name of other local business here)!”
    • Does that open the door to a nice note becoming a nasty-gram if that other business is actually a competitor? (We can’t really expect Facebook to NOT suggest direct competitors, can we?)
  • Do we leave just leave it alone and hope Facebook doesn’t start suggesting that we like “Target” when we’ve just liked the neighborhood independent gift shop?
  • This rogue thought still burns me up and I think of it every time I think “Facebook Marketing”: when is Facebook going to finally stop so heavily throttling how many people see page-created content? These are the Facebook users who have opted-in to liking the pages we heavily invest time and effort into promoting (you’re welcome, Facebook). Facebook is forcing us to buy “sponsored” visibility to improve the chances that more than 10% of page subscribers will see the posts we take the time, and have been trained to, create. {Read more about this on NewMediaRockStars.com, if you’re so inclined.}

Ending today and this post on a positive note: big “thank you” goes out to Kim Adamof for the referral that came my way today in need of public relations services!

Happy Mondaying,
Lisa

What’s ON Your Cup?

What’s in your cup may not matter as much as what’s written on your cup, with this great idea from Caribou Coffee. To be fair, I don’t believe they pioneered the idea, but I do love the customer engagement! Way better to use your customers words (with permission, of course) than a small array of old quotes, no?

Engage guests with memorable digital interactions.
When the company asked guests to submit comments about what they stay awake for, more than 15,000 people responded. Next year, Caribou plans to reissue its coffee cups with statements from those guests.

via: Marketing executive shares lessons from Caribou Coffee’s growth, growing pains – http://www.restaurant.org/nra_news_blog/2010/10/marketing-executive-shares-lessons-from-caribou-coffees-growth-growing-pains.cfm

image: http://www.diytrade.com/china/4/products/3075181/double_wall_paper_cup.html (PS – I’m not advocating importing your cups from China, I just like the picture.)