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For retail stores with physical presence in one or more cities or neighborhoods the concept of Local is of high importance. 

And directly related to that is the work involved in retaining and keeping local customers.  In this post we'll discuss what local customer acquisition means and how to achieve it as a local retailer.


A local customer typically refers to an individual or business that resides or operates within the immediate vicinity of a retailer or service provider. The exact definition of "local" can vary depending on the context, but it generally implies a relatively close proximity to the business's physical location.

Local customers are often considered a key demographic for businesses, especially small and independent retailers, as they are more likely to frequent the business, make repeat purchases, and contribute to the local economy. Local customers may also feel a stronger sense of loyalty and connection to local businesses, which can be beneficial for building long-term relationships and fostering a positive reputation within the community.


Customer acquisition is the culmination of multiple activitie performed by businesses to capture new customers.  New customer acquisition involves a myriad of activities including:

1. Marketing and branding using localized Street (aka Guerrilla) Marketing tactices as well as well strategized online marketing designed to capture local marketers.

2. Advertising in local media and online channels.

3. Conversion is a key part of all acquisition (marketing and advertising) activities and must be measures at each step of the acquisition funnel.

While these activities apply to any type of business, customer acquisition for local retailers is specifically focused on capturing "local customers", those customers which by priximity live or work in walking or commute distance to the store and thereby are able to visit the store at some point, depending on the convenience.


The local customer acquisition funnel is a framework used by businesses to attract and convert local customers. It consists of several stages that a potential customer goes through before making a purchase. Here is a high-level version of the local customer acquisition funnel:

1. Awareness: At this stage, businesses aim to make local customers aware of their existence and offerings. This can be achieved through local advertising, signage, online marketing, and other awareness-building activities.

2. Interest: Once customers are aware of the business, the goal is to generate interest in its products or services. This can be done through engaging content, special promotions, or events targeted at the local community.

3. Consideration: At this stage, customers are considering whether to make a purchase. Businesses can provide more detailed information about their offerings, showcase customer reviews and testimonials, and offer incentives to encourage customers to choose their business.

4. Conversion: This is the stage where customers make a purchase. Businesses can make the conversion process as smooth as possible by offering convenient payment options, clear pricing, and excellent customer service.

By understanding and optimizing each stage of the local customer acquisition funnel, businesses can attract and retain local customers more effectively, ultimately leading to business growth and success.



Local customers are considered the "lowest hanging fruit" for local retailers. This is because they are already in the vicinity and may have a higher likelihood of visiting the store compared to customers who are farther away. Local customers also tend to be more familiar with the store's offerings and may have established a level of trust with the business.

Acquiring local customers can be easier and require lower Customer Acquisition Cost (CAC) compared to acquiring customers from farther away. Local customers are typically more accessible and easier to target through localized marketing efforts such as flyers, local events, and partnerships with other local businesses. Additionally, word-of-mouth referrals can be more effective within a local community, helping to attract new customers.


Local customers can often be more loyal than customers from farther away. This loyalty can stem from a sense of community pride and a desire to support local businesses. Additionally, local customers may have more personal connections with the business owners or staff, leading to a stronger sense of loyalty.

However, loyalty is not guaranteed solely based on proximity. Retailers still need to provide value, quality products or services, and excellent customer experiences to maintain and nurture this loyalty. Building relationships with customers, engaging with the local community, and offering personalized services can all help strengthen loyalty among local customers.


Local customers can be more profitable for retailers in some cases. Since local customers are more accessible and may visit the store more frequently, they can contribute to higher sales and repeat business. Additionally, local customers may be more willing to pay a premium to support local businesses, which can lead to higher margins.

In addition local customers can have a higher LTV (Lifetime Value)

Local customers can have a higher Lifetime Value (LTV) for retailers compared to customers from farther away since local customers are more likely to make repeat purchases and engage with the business over a longer period. They may also be more inclined to try out new products or services offered by the business.

Additionally, local customers can contribute to the growth of the business through word-of-mouth referrals and positive reviews within the local community, which can further increase their LTV.


Increasing local customer acquisition involves a combination of marketing and partnership strategies and actions tailored to the local community. Here are some effective strategies:

Targeted Advertising: Use online advertising platforms like Google Ads and social media ads to target customers in your local area. You can also consider local print advertising or sponsoring local events.

Local Partnerships: Build partnerships with other local businesses or organizations to cross-promote each other's products or services. This can help you reach new audiences and increase your visibility in the community.

Community Engagement: Get involved in local events, sponsor local sports teams or community initiatives, and participate in local charity events. This can help you build relationships with potential customers and show your commitment to the community.

Offer Local Discounts and Promotions: Offer special discounts or promotions for local customers to encourage them to try your products or services. This can help attract new customers and increase loyalty among existing customers.

Customer Referral Program: Encourage your existing customers to refer their friends and family to your business by offering incentives such as discounts or freebies for successful referrals.

Optimize Customer Experience: Provide excellent customer service and ensure a positive customer experience to encourage repeat business and positive word-of-mouth recommendations.

Local Content Marketing: Create content that is relevant to your local community, such as blog posts, videos, or social media posts highlighting local events or news. This can help you connect with local customers and establish your business as a local authority.

Local partnerships: working with local Chamer of Commerce can extend our reach beyond what typical advertising and marketing does.  It's important to invest time into building the relationships and not expect things to happen just becasue we joined the Chamber and have our name in the member list.

Capture local online sales: the large majorist of customers start and conduct their shopping search online, and this number is only growing.  That said, the majority of shopping is still local but the purchases are not from local stores.  This is because traditional online marketing still does not make it easy for consumers to find local products.

The #LocalFirst movement is working to change this and there newer services and technologies available which go beyond the typical online organic SEO and paid acquisition models.  

To be clear Online should be a part of local retailers' strategy and tool set, however, the methods and tools need to stay current AND only be used when proven effective by data, not because of marketing messages from traditional online services.

For example being listed on local directories such as Google My Business is an important step which can be a start to an online presence although in and of itself it will not deliver the results most people expect.  Google My Business tool is a good resource and combined with an effective Website can serve our customers when and where they need us.


In business and marketing, a channel refers to the different avenues or methods through which a company sells and delivers its products or services to customers. Channels can be both direct and indirect:

Direct Channels: These are channels where the company sells directly to customers without the involvement of intermediaries. Examples include selling through company-owned stores, websites, or direct sales representatives.

Indirect Channels: These are channels where the company sells through intermediaries or third parties. Examples include selling through retailers, wholesalers, distributors, or online marketplaces.

Channels can also be categorized based on the type of interaction:

Physical Channels: These are channels that involve physical interactions, such as selling through brick-and-mortar stores, kiosks, or pop-up shops.

Digital Channels: These are channels that involve digital interactions, such as selling through e-commerce websites, mobile apps, or social media platforms.

Companies often use a mix of channels to reach different customer segments and maximize their reach and sales potential. The choice of channels depends on various factors such as target market, product type, competitive landscape, and business objectives.


After successful acquisition, where a new customer makes the first purchase from a business, the next important phases of the relationship of the business start with that customer.  THese phases include:

Engagement, where we work on different engagement activities to stay connected with the customer to keep them informed and interested in making repeat purchases.

Retention, where we work on detecting signs of churn (a customer leaving our business), and taking actions to eliminate or minimize churn.

Advocacy, where we serve customers so well they become advocates who will recommend our business to others. 


Contact us if you are interested to partner or contribute to this topic.