The World is Flat – Thomas Friedman.
We are in the golden age of globalization. More and more, technology and labor are being sourced throughout the globe at a rapid pace. As Friedman proposed in his 2005 book, technology has enabled a global economy and it does not seem to be slowing down now, over a decade later.
So, if this is true – why is it so hard to land new business in the town 30 miles away from you?
I have a theory I would like to propose. It has no name, just more of a shape that is endearing to me: a donut.
What I’m about to propose isn’t always the case, but it seems to be common based on what we’ve seen from our clients and found in our own experiences. Maybe you’ve seen similar things in your business. Don’t take it as gospel, just an observation.
Basically, there are three rings to geocentric business development.
The Center – Your City
We tend to network and navigate in-person relationships in our own town or city. From Fort Worth to Chicago, Atlanta to Seattle, we have a metropolitan area that we would call home. And when we start working with a company, I would say that most of their referral, network-based new business comes from this area.
I would also say that it’s fairly easy (meaning it doesn’t entail conflict) to generate new business in this area, because, beyond your actual expertise, you share a proximity-based bond with your client. You’re in the same town.
Why does this matter? We’ve heard it phrased a few different ways: “I like that you’re in town, I like that you’re close to me, I like supporting local businesses.” Any way you slice it, people tend to gravitate toward a local service offering because it offers familiarity and control in the form of convenience. When local offerings provide a sufficient level of expertise, people choose local. I don’t need a mechanic in NY; the one over here seems to be sufficient and they’re close, thus increasing my level of control over my life (and maybe the mechanic).
So, proximity is a bonus to the relationship – it adds a psychological benefit as well as a physical one.
Middle – Neighboring Town
The “neighboring town” is the area of the donut that gets complicated. Here, we encounter the strange phenomenon of being close – but not close enough.
Put another way: you’re local, but you’re far enough away that the client starts to lose a little bit of that feeling of proximity control we mentioned earlier. The distance starts to change their perception of their control over your services. It starts to shift from someone I have the option of trusting (“I can pop into their office, deal with issues, or get all my files if this goes bad”) to someone I have to trust.
What you experience is actually a disadvantage compared to the local guy – the guy right around the corner or in the same city as the client. You start to be compared on a different value proposition that includes everyone in the entire service marketplace, but you’ve lost the local edge. You’re local, but you’re not local enough.
The Outer Ring – The National
Once you get out of the 50 to 60 mile radius, you become a national firm. This means that you’re viewed the same in New York City as you would be in Atlanta and as you would be in Tampa, Idaho or Silicon Valley. In this case, it doesn’t really matter where you are – what matters more is what you do and who you do it for. No longer does your geographic location matter. Your value proposition shifts from being the best on the block (or the most accessible and therefore a lower risk) to being the best in the nation.
You’ve entered into a big list of competition. This challenge presents itself as daunting and almost unbeatable until you start to realize you can’t win this market the same way you won the local game. Being accessible isn’t enough.
To win the national market, you must differentiate. You must have a strong USP with a niche strategy to stand out from all the other firms in that scope. You must do something (service niche) for someone (horizontal or vertical positioning) that can put you in the right position in the clients’ minds. When a client chooses to go on a national search, they’re looking for someone more specific to their particular needs for a particular service. It’s call specialization. Specialists win the national game because they limit risk and ensure more control for the client.
Why Does All This Matter?
I’ve only seen this observation when it comes to new business development and how you sell your firm or service. Many people struggle to get out of the local market because they fail to position themselves the right way in the buying decision. Assurance is a form of control the clients mind, and if you don’t position yourself for assurance, you’ll never conquer the market.
So, take your time. Think deeply about your business model, your offering, and how you pitch yourself in the marketplace. Are you simply the local firm (close, controllable), or are you the national firm (assured, experts)? How you position your firm in the market will matter in how you win non-local business.
If you want to talk about your marketing strategy, or how you are overcoming the localization issue, let’s have a free consult to talk. It will be worth your time.