About a dozen years ago, I interviewed an Ace Hardware owner who was forced to make big changes in how he did business to survive a new competitor that was moving in next door. His small store of about 12,000 square feet, packed with merchandise, had been thriving for years. All of that was about to potentially change when a Home Depot chose to build out a 150,000-square-foot store—more than 10 times his size—directly next door. In addition, once the store was built, Home Depot spent more than 30 times what Ace spent on advertising.
This savvy Ace Hardware owner realized that to survive, he had to make some changes. He couldn’t compete on size. He couldn’t compete on selection—a store more than 10 times larger obviously had more merchandise for customers to choose from. And even though his store had competitive prices, “big box” stores had a reputation for lower prices. So, what did he choose to do? He set out to become the most loved business in his community.
He started by eliminating most of the store’s traditional advertising. With his competition spending 30 times more, he recognized that his ads might go unnoticed. He shifted those dollars to the community. He started sponsoring local programs such as school dances, church functions and kids’ sports teams. While he was already established and known in the community, he took it to the next level with participation in his customers’ important events.
The strategy for becoming the most loved business in the community isn’t just a feel-good or ego-driven approach to name recognition. It’s smart business. When the Ace Hardware owner shifted his resources from traditional advertising to community involvement, he created something powerful and special: genuine local relationships and goodwill.
This strategy can work for any business (B2C and B2B), not just Ace Hardware.
Ten years ago, I had the honor of being a keynote speaker for the United Franchise Group. Back then, they had four franchise concepts. Today, they have 10, plus a consulting company that helps entrepreneurs become franchisors. Their concepts vary from marketing companies to business consulting practices to restaurants. I recently spoke with Ray Titus, UFG’s CEO, and he shared one of his favorite marketing strategies: to be the most loved person in your community.
It turns out that this strategy was akin to the one used by the Ace Hardware owner. There are many similarities between Ace Hardware and UFG’s franchise concepts. While UFG may be an international brand, they are still local businesses. Depending on the message, traditional advertising and marketing can create awareness and even some emotional connection. However, according to Titus, nothing beats the connection you can make by becoming beloved by the community where you work.
Even large companies like Home Depot (a direct competitor to Ace Hardware) have recognized the value of community engagement. Many national and international companies have community programs, foundations and local store partnerships that allow them to connect meaningfully with the communities they serve. The key is to be authentic. Simply throwing money at a cause as a donation is nice, but active community involvement is another level.
The idea of “giving back” to the community is important to customers. My annual CX research found that 62% of customers in the U.S. said they prefer to do business with a company or brand that has a social cause that is important to them, and a local/community cause may not only be important, it’s also “close to home.” Furthermore, 51% of customers are willing to pay more if the company or brand supports a cause that is important to them.
For businesses large and small, the lesson Ace Hardware and United Franchise Group have embraced is clear: community engagement isn’t just a corporate social responsibility, it’s a strategic advantage. Companies that authentically connect with the communities in which they reside create a competitive edge that transcends size, price and selection. The most successful organizations recognize that becoming loved and appreciated in their communities is good for business.