6 ways Businesses in Tier-2 and 3 Cities can Use Digital and Non-Digital Channels in 2023


Are non-digital avenues still relevant in the digital era?

As against the flow, as it sounds, the answer is yes. Read on.

Increasing internet penetration, smartphone users, and COVID-induced digital adoption and reverse migration have opened up the e-commerce market in tier-2 and 3 cities. According to Unicommerce analysis of over 500 million orders in the last 2 years, the e-commerce market share of tier-2 and tier-3 cities increased by 7.3% and 2% respectively from 2021 to 2022. 

SMEs and MSMEs from tier-2 and tier-3 cities are in some stage of their digital transformation with at least a standalone website to appeal to this growing market. Many have been reaping the benefits of digitalization and making profits.

A government boost for creating new growth avenues for startups from tier-2 and 3 cities and initiatives such as Startup India has seen a high number of startups from these smaller cities as well. The push to digital is something no business in tier-2 or 3 cities can ignore.


digital and non-digital channels for small businesses


However, traditional marketing is not obsolete. For a lot of businesses, having a strategy that includes both traditional and digital can be more effective than choosing only digital. Owing to the specific demographics of  tier-2 and 3 cities, we’d say it’s more relevant to the businesses that operate in these smaller cities and towns.

Here’s why. 

Trustworthy brand awareness building

Radio, magazines, and newspapers continue to play an important role in people’s daily lives as the constant and large flow of information on the Internet can be chaotic to navigate. Repeated brand exposure keeps a brand’s identity and products top-of-mind for the audience. The key is to set aside a percentage of total ad spend to offline tactics that may still be valuable to your brand.


Not everyone is online!

According to Data Reportal 53% of the Indian population (742 Million) did not use the internet at the beginning of 2022. This indicates that a large population in India is not using the internet, hence, offline marketing can be effective in targeting this segment.


Non-digital channels improve engagement

Providing tangible, physical experiences for customers can lead to improved customer engagement. Enabling events where customers get to interact with your products or services in person will allow you to test what users in your local community are interested in. Cultural connection and a sense of community-run deeper in smaller cities and towns.

Rahul Hasija, Founder of Udaipur-based  Swacardz, a company that sells card games for deeper conversations, says that his products are sold out in no time at exhibitions as people who play the game experience the benefits of the product before purchasing.


Offline channels can help target wider audiences

Keeping traditional media in your strategy enables you to reach users who may not be very active online or are not on the social media platforms you are reaching out to. Remember the older audience still are a valuable audience.

Add to that, the personal touch of non-digital channels, including local events, can help businesses to effectively target a diverse group of customers at once.


Strategies that work in Chennai may not work in Trichy!

Advertising differs in smaller cities and towns due to various factors. Here are a few important aspects to keep in mind.

The Market: Consumer tastes and preferences differ from place to place. What works with a tier-1 city audience is unlikely to work with audiences from smaller cities and towns. It’s important to establish a strategy that works best for your business and to use the channels that best suit your audience. With a relatively lesser population, appropriate advertising channels must be leveraged for smaller towns.

The language barrier: Audiences from tier-2 and 3 cities prefer regional languages to English and are looking for simpler, more intuitive user interfaces. 

The close-knit communities: Consumers in smaller cities and towns rely more on the recommendations of neighbors, relatives, and friends. Word-of-mouth is an important tool. Referral schemes and such can help to onboard new customers. The prevalence of close-knit communities can be useful for facilitating a positive grapevine about the brand.

Mobile friendliness: Flipkart Insights highlight that the number of premium smartphone users witnessed a 40% growth between January and July of 2022. With more smartphone users in smaller towns, it’s imperative to go digital in a mobile-friendly way. 

The right partner: Tech-driven companies such as Tier2 Digital focus on helping businesses in tier-2 and tier-3 cities go digital without driving up costs. They can help with basic and advanced e-commerce-enabled website design optimized for all views – desktop, mobile, and tablet. They also provide digital roadmaps to sustain profits in the long run.

Here’re 6 channels small-town businesses must try! 


1.) Billboards 

Why should Mumbai and Chennai have all the fun? Billboards are great for increasing brand awareness and visibility of a brand.

Here are a few reasons:

  • Works 24*7 
  •  Requires no click from customers as billboards are unavoidable while driving or stuck in traffic! 
  •  Reaches a larger audience at once


By strategically placing billboards at critical junctions, areas of high population, airports, and bus shelters, you can increase your brand awareness. For example, if you’re a multi-specialty hospital catering to a wide audience, billboards can be a good option to target not just women, men, youngsters, and senior citizens from your city but audiences from smaller towns and villages who commute to the city for various purposes.


2.) Radio FM

The pandemic gave us remote work, lower discretionary spending, and a boom in e-commerce to name a few of the prominent ones. Have you heard about the surge in the number of FM listeners?

The latest research by AZ Research PPL highlights that 51 million people sought radio for credible information during lockdowns. Also, the radio reported a credibility score of 6.27 right after the internet at 6.44. According to Prashant Panday, MD and CEO, of Entertainment Network India Ltd. (ENIL), small towns and tier-2 cities witnessed an increase in radio ad volume compared to 8 tier-1 cities – Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad, Kolkata, and Surat, that reported a 15% decline in the last quarter of 2020.

Businesses in small towns have already begun to leverage radio FM as a lever for growth. Industry estimates report that regional markets account for more than 10% share of the ad expenditure in comparison to mini-metros and tier-1 cities that account for 4 – 5%.


Tier-2 cities such as Jaipur and Indore rank highest in terms of radio ad volume

Hence, advertising via radio FMs is a good strategy when you are thinking of building brand awareness and increasing customer engagement.


3.) Social media:

From Instagram to Facebook to LinkedIn to Twitter, we have a platter of social media platforms. However, you don’t have to invest your energy in all social media channels. Understand the nature of platforms and choose a few that suit your business needs the best.

ShareChat, which allows businesses to communicate in regional languages, caters to tier-2 and tier-3 cities. According to its latest 2022 report, 90% of new internet users in India consume content in regional languages and 88% of internet users in India respond to digital ads in their local languages as compared to English.

Create content in regional languages on social media to gain more followership and lead conversion. Use English to cater to a wider audience, but parallelly use regional languages.


Choose the right platforms, use regional language and make it mobile-friendly!

4.) Digital Classifieds

We no longer use physical copies of yellow pages. However, the concept of classified ads has gone digital, leading to the birth of more evolved options such as Justdial, Sulekha, Quikr, Olx, IndiaMART, etc.

With an increasing number of smartphone users and consumer preference towards online channels, businesses can leverage digital classifieds for selling products and services to regional audiences.


Here’re some benefits of classifieds:

  •  Acts as cost-effective means to reach a wider audience
  •  Helps in targeting a specific local market as many classifieds platforms allow businesses to specify the geographic area or audience they want to reach
  • Assists in improving visibility in a short period
  • Classified’s easy-to-use platform simplifies the process of creating and publishing ads for small businesses


5.) Business groups/ communities

As an entrepreneur, it’s important to be aware of industry trends, building know-how, and best practices, and stay on top of technological advancements. Given the busy schedules, it’s not possible to read tons of information or just sign-up for courses and do things in a silo.

Hence, it is important to meet people who are in the business. Joining business groups and communities is an excellent way to stay in tune with important business news, receive mentorship, and make meaningful connections.


6.) Word-of-mouth

Residing in a small city can help you make a fortune. Try this age-old and time-tested technique: word-of-mouth. With excellent products and services and a customer-centric approach, businesses can reap the benefits: of customer loyalty, new customer acquisition, and increased sales. 


Word of mouth is a double-edged sword. Use it wisely to grow your business!

Word of mouth can backfire if your products or services are defective. Delivery delays, refusal to address complaints, impolite language, etc. can ruin the reputation of your brand immediately. However, excellent products or services coupled with digitalization efforts can make businesses sustainably increase their bottom line. 


Here’re some ways to bridge word of mouth and digital channels for your business:

  • Encourage happy customers to leave reviews on your website, social media, or review sites such as Google My Business. When I moved to Goa, I was searching for bicycle-renting shops. The Google-led location that I went to turn out to be a clothing store. After enquiring, I understood that they rent bicycles as well. Do not make the process confusing and cumbersome for customers. It may reflect on the google reviews and this is the basis on which your potential customers are making decisions
  • Create content in regional languages and English to reach a wider audience
  • Record video testimonials in local languages and upload them to socials
  • Provide excellent customer service to encourage customers to spread the word about your business to their friends and family
  • Leverage Customer Relation Management (CRM) tools to automate sending acknowledgment and promotional messages or greetings  to customers
  • Consider offering incentives, such as discounts or free products, to customers who refer others to your business
  • Participate in local events, such as trade shows, festivals, or community events to increase business visibility and acquire new customers
  • Use social media platforms to engage with customers and encourage them to share your business with their networks

Book a 15-min consultation with Tier2 Digital for more such marketing strategies and digital-led approaches to increase your profits.


To conclude

You can become a big fish in a small pond!  Businesses in tier-2 and 3 towns can leverage the powerful combination of content, traditional marketing, and digital tools to make a sustainable net income while residing in the comfort of their cities.


Karthik Author

Karthik is the founder of Tier2 Digital and oversees strategy, client relations, and delivery. Prior to this, he was leading campaigns and content at I-PAC. He led multiple digital initiatives that reached millions of people including an online campaign that had over a million signups in under a week. He has over 10 years of experience in business and tech roles at Morgan Stanley, Beyond the Rack, Morgan Stanley, Infosys, and Emzingo. He has an MBA in strategy from McGill University and ESADE. He loves soccer and traveling.

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