Did you know that the United States has a total area of 3,809,525 square miles, making it the fifth largest country in the world? There are a lot of diverse regions in this vast country — from bustling urban centers to remote hamlets and rural crossroads — each with unique factors that influence the businesses operating there.
Within the small to mid-sized business (SMB) community,
professional services providers (like bankers, accountants/CPAs, financial advisors, insurance agents, etc.) who are viewed as trusted advisors often are the people who are most knowledgeable about their community’s economic landscape, and business owners want to tap into this expertise. To do this, a business owner may initiate a conversation with their business advisor or consultant by saying something like, “What are you hearing/seeing out there?” but what they’re really asking is, “What is the status of our local economy?”
How to position yourself as a local economist
It’s important for trusted advisors to understand the nuances that make the economy of your particular coverage area unique. If you can effectively respond when a client or prospect makes an inquiry about your local economy, your value to that business owner increases exponentially.
To earn a stellar reputation as a local economist, a trusted advisor needs:
Contextual knowledge of economic statistics: Is your local economy growing faster than the nation’s economy as a whole? How fast should a business in your area grow — is there adequate need for more employees or more machinery, for example?
Not only do you need to know about your region’s microeconomy, you also must have a contextual understanding of how those figures compare to the economy of the nation as a whole. This includes data points like average incomes for your area, employment and wage growth, residential and commercial real estate prices and occupancy rates, and types and numbers of businesses in your area. If the local economist/trusted advisor is knowledgeable about these stats, they can help business owners make better decisions, especially around growth.
Credibility of your knowledge: The proof is in the pudding. When you can demonstrate that you have valuable, and importantly, accurate insights about your local economy, it can be a valuable differentiator between you and your competition.
A professional services provider who is an effective local economist not only has a great conversation starter to get their foot in the door with prospects, they also gain instant credibility with business owners. Among existing clients, they will earn a reputation for being smart and attuned to their community, but perhaps more important, they will be considered a trusted advisor — someone who is experienced and knowledgeable enough to give the business owner advice.
An ability to share what you know: Information on your local economy is only valuable if you are an effective communicator. It is essential that you share the data you have with business owners so they can then use it to inform their decisions. You can provide key data points and statistics via email, along with your thoughts on how they apply to the client or prospect. Or print and drop off an article about your local economy with salient points highlighted.
Applying your local economic knowledge
Let’s get into the nitty-gritty of how to harness the power of microeconomic data and effectively position yourself as a local economist. How can you apply that knowledge to conversations and consultations with business owners?
As someone with knowledge of your area’s unique economy, you can help a business owner:
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- Better understand their competition. Knowing the number of establishments within an industry relative to the area’s population can have implications for increased or decreased competition. Also, is there likely to be competition moving in from out of town because your local economy is growing faster than the national average?
- Understand employee wages in their industry. For instance, if you have access to wage data for businesses in their industry, you can assess if their own wages are higher than the average. This knowledge may give a business owner more room to negotiate with future employees.
- Determine a growth strategy. Expansion can mean hiring more employees, buying more machinery, or opening more physical locations. Should a business expand faster or slower based on the state of your local economy?
- Analyze home prices and construction. Many SMBs are directly or tangentially connected to the construction industry. If home prices are increasing faster than the national average, will residential construction continue at the pace it once was?
A key differentiator for trusted advisors
Although we are one country, the economic landscape in a metropolitan area on the West Coast is quite different from that of a small town in the South. SMB owners are therefore clamoring for microeconomic insights about their specific region that can inform their business decisions. But finding accurate, up-to-date data at the local level can be a big challenge.
This situation presents a great opportunity for professional services providers to be the heroes of their town. Those who can successfully position themselves as knowledgeable local economists will instantly boost their value with business owners. And by using Industry Intelligence, tapping into details about your local economy is simple.
See how Vertical IQ’s Local Economies section helps you become an economic expert on 300+ metro areas and 3,100+ counties in minutes. And in the coming weeks, we are excited to share that we will be adding even more local economic data to help you tap into the nuances of your region’s microeconomy. Stay tuned!!