How 'Shop Local' works so well

We recycle our paper, our cans, and our bottles; why not recycle (and control) our incomes?    Tricia Truit, Earth and Sky Collective

                Shop Local is a concept that money that is spent in an area, over and over again, creates a high local multiplier effect.  For example, $1,000 is spent in a town.  The business that receives the money spent it on wages, local accountant, local goods to stock the store; so the money is spent a second time in the area.  Those people who receive in the money turn around and also spend their money on goods and services locally.  That’s three times the money is circulated in town. So that one thousand dollars has, in effect, turned into $3,000 in the local economy. 

That’s the “Local Multiplier Effect,” a phrase coined by economist John Maynard Keynes in his 1936 book “The General Theory of Employment, Interest and Money.”  And the more times each dollar is circulated in an area, the higher the LME and the stronger the local economy.

HISTORY AND IMPACT

Over the past 50 years, the expansion of national businesses into local domestic markets has diverted this vital monetary stream and redirected it to centralized corporate coffers. There it is spent on large capital expenditures, overseas goods and all too frequently inflated executive salaries. This interception of funds has depleted local towns and cities across our nation of an important source of funds: recirculated income.

It has been estimated that about a century ago, thriving industrial communities had a LME in the high 20s or low 30s. Today it’s estimated to be in the single digits. This reduction in the number of rounds that monies make has had an extremely negative effect on our local economies. All areas of community life are affected by this deficit.²

PRESENT DAY

                Knowing this, why don’t people shop local more often?  Why do people send their money outside of their area via national chain stores, import companies and businesses which do not invest in the local economy by returning the dollars to the local market?   Here are a few reasons.

1.       Cost – Customers want a lower cost and national stores, including those internet stores, can sometimes provide a lower cost for the same product.  Even if the national stores cannot provide the lower price, if a buyer “thinks” they can, that’s enough for the buyer to shop national rather than local.

2.       Service – Customers “feel” that the services they want are not provided locally; either not provided at all, not provided at the standard they prefer; or the services cost too much.

3.       Product – Is the product available locally?  Sometimes, national stores have more variety for a buyer and sometimes a buyer doesn’t bother to search locally because they “believe” the national stores have what they want. Sometimes, the buyer only wants something that is not created locally, but is created out of the area.

All of these reasons are about perception, not about the reality of what is available locally.   The more that people believe in their local market, the more they will shop locally.   That’s where marketing and promotion comes in.  Marketing matters even in a concept on how to live healthier, more economical, greener.  Shop Local is the same sort of concept.  How do I change a perception to create a better solution for a healthier local economy and better lives.

This can be done and should be done in a several ways: verbal and written promotion, advertising, and setting a good example.

The first are probably self explanatory.  Create a campaign and get it out in the public’s eye.

The good example is much harder and more elusive, but it is effective is showing others that it can be done.  That’s where living examples, people who spend their money locally, are a huge impact on other people who view them. 

I do my best to Shop Local first.  If I cannot find what I am looking for in my hometown, either in products or services, then and only then, do I look elsewhere and I don’t look very far.  Second, I look to the products and services created and provided in my county; if I can’t keep my money home, then at least I can add to our county recirculated income. Third, I look for products and services created in my state. 

Note that the term “created  locally” means that I am not spending money on items bought nationally or imported.  By buying local products, I am also encouraging a stronger LME.

All of these “local” territories are important for a variety of reasons, including services provided by governments at city, county and state levels. I keep money in my “territory” to help create a higher LME and stronger economy.  Shop Local works if we all work it.

Parts of this article are taken from “Why the ‘Local Multiplier Effect’ Always Counts” by Tricia Truit, Earth and Sky Collective, ©2004 GEO, P O Box 115, Riverdale MD 20738, http://www.geo.coop ^1,2

It's Possible in Smithville

"It's Possible in Smithville!" This is the new slogan of the Smithville Area Chamber of Commerce, and as a board member, I am privileged that I was able to be there at its inception.
But did you know that you, too, can be there at that table once a month to hear all the happenings of the chamber?  The meetings are not private, nor is the business discussed sacred.  As a matter of fact, the interested public is invited, especially chamber members.

The meeting is simply the chamber’s ongoing plan of action on the best ways to promote Smithville and through that, the community’s businesses.  It’s a plan of action that anyone can benefit from knowing and, in addition, acting on.

For example, do you know what movie production is coming to town?  Do you know how hard the chamber and its board and volunteers work to bring one to town?  Do you know how having a movie production team here helps Smithville and your business?  This is just one example of many.  Just think of the many events hosted by the chamber, the city and other organizations. How does your business "fit" into this picture?

There’s a saying that knowledge is power.  With that knowledge of current happenings, you could “leverage” your marketing.  Your business just might complement the town’s activities – otherwise, why would you be in business?  Use what others have put into action to move your business forward.  How does your business fit in with the economic development and tourism plans of the chamber?   In other words, how powerful are you?

Check out some of the activities of your chamber.  Find out what’s going on in this community.  And then put your plan into action.  Remember, it’s possible in Smithville.  For you as well as the chamber.

A Smithville Success Story in Blogging

Last week I spoke about social media marketing, and I need to give some credit.  I recently attended a seminar by Sarah Page of LCRA, and she was invaluable in the ways that I now see social media.  I’ve even started a Twitter page (through FranLan Multimedia) to find out if it’s for me, though it’s much neglected.
I seem unable to find those moments to inform my small public about my lunch eating habits or the fact that I am waiting in line at the grocery store, as exciting as that seems.  Twitter hasn’t found its way into my heart yet.
I did start a Facebook page for franLan.  I did it wrong the first time, as a personal site, before managing to set up a business page. I am in the process of informing people of my move to the business page.  I’ll see how long it will take my “friends” to become “fans” or if my blunder will lose me friends along the way.  Important to know if these kinds of mistakes are “fixable.”  This is a business, after all.
My secondary reason for doing this is that I am curious to see what, if any, response to franLan will occur.  Will franLan become successful beyond my wildest dreams or will it all be personal.  Will I be known as a great writer of local lore or do I see the death knell of my aspiring blog.
I also wanted you to know that I have been greatly inspired by a local blogger I know who is faithful about sitting down at her computer to let her fans know about the happenings in Smithville Texas.  If you want to read a blog that has the small town charm of someone gently swaying in the breeze on their front porch swing, then do read the blog of Sallie Blalock at the Katy House Bed and Breakfast. The link to her site is http://www.katyhouse.com/blog/
This to me is a successful blog.  Sallie doesn’t harp on her rates or features of her rooms.  Instead, she entices you to read more and creates the desire to visit the old railroad town of Smithville, lying along the Colorado River.  It works.  I’ve met people who came to Smithville because of her blog.  And her website does reflect her business well.  That and her personal charm, in person and in print, are all contributing factors to her online success as an author and her raise in room rentals.  Couldn’t ask for more.

Marketing Today

It would be so easy if starting a new business was a simple as renting a building. Unfortunately, that’s not reality. There’s so much more that goes into it.  To be a successful business, you must have a plan. Part of that plan is your inventory or services including the talents you bring to the game. Part of that plan is startup costs and long term finances.

And part of that plan needs to be marketing, drawing people to your door. Without customers, you don’t have a business; you have a hobby.

Today’s marketing includes brochures, newspapers, highway billboards, radio, television and now the Internet. Each one of these has the progressive ability to reach a higher and higher number of people; if you’ve got the right message. On this scale, the Internet is definitely the most far reaching. But people still need to know how to find you and your information. This is a virtual “drawing people to your door.”

Do you know how to create an effective message for your customers? There is social media, blogging and website marketing.

Social media is more of a conversation, not a sales pitch. These are sites like Facebook and Twitter. It can be worthwhile, but it does take time to nurture your customers, just like you do your neighbors, asking about their children and activities. Do you want someone to walk up to you and immediately begin talking about their next great sale? No, a conversation is a give and take, showing interest in another. The drawback to social media, besides the time involved, is that you have to continue to find new people to join your circle. Otherwise, you are “talking” to the same people over and over again.

Blogging is another free activity, and you have control of the content. Blogging can be a time consuming activity. The ability to write an interesting article is also a must if you want people to come back. This is your forum.  Again, this is not just a sales pitch; people won’t keep coming back for that. This is your chance to inform people in an area of interest. And the good thing about blogging is that people of like activities tend to draw together naturally.

The one way to have your marketing message out there, all of it, is in a website. This is where you social marketing and blogging can lead people who do want more information about your business.  These are the customers who are interested in what you are selling.  That’s why they are going to your website - it’s expected that you would have business information located here.

This is your virtual business.  The best sites are a direct reflection of your store.  No one wants to be drawn into something, only to find that the business is not what it seems.  Make your website a true reflection of your business, not what you dream it could be.  If you are trying to present your business as “better” or “upscale” when it is not, then your work first must be in changing your business to match your dream.  Truth is advertising is a must.  Trust is essential for keeping customers.

Remember, not one thing makes a good business.  All pieces are needed to make the puzzle picture complete.  If you are lacking in one area of business, it’s worth the time to learn or to learn who to hire to do it.