Where Do Small Business Owners Get Customers (and Sales)?

What marketing methods work best for small business owners to find and keep customers?

A study by Huzzah Media polled small business owners and here’s what they found.

By far the top way small business owners engage with customers is their websites, cited by more than 80 percent of entrepreneurs. Next is the Yellow Pages, cited by more than 65 percent, followed by social media, used by nearly 55 percent. 

Attracting new customers means nothing, of course, if they don’t buy anything, so the study also asked small business owners where most of their sales come from. Repeat customers are by far the biggest source of revenue for more than 43 percent of entrepreneurs, while new customers account for about 19 percent of revenues.

Interestingly, “word-of-mouth” is cited by 36 percent. In other words, new customers driven by existing customers’ recommendations are the second-biggest source of revenue—more than new customers who come to a business from other sources.

Along the same lines, when asked what marketing method is most successful for them, a whopping 52 percent of small business owners cite “friend referrals.” In comparison, just 33 percent say advertising is their most effective marketing method.

Clearly, most small business owners have a baseline online presence (that is, a website), and most also use social media (although there’s definitely room for improvement there). But few take their online presence to the next level by using tools such as customer loyalty programs and mobile apps to their fullest extent. These can be great ways to increase word-of-mouth, retain existing customers and drive new ones.

So why aren’t small businesses using them? Primarily, they don’t have the budget (42 percent) or time (27 percent) to deal with expanding their online presence. In addition, about 18 percent admit to confusion about mobile apps, loyalty programs and social media—they’re either “overwhelmed” by the idea of doing more digitally or “don’t know where to start.”

Small business owners in the study are clearly aware that mobility is the hottest trend right now. If they had the budget and time to make a change, more than 40 percent want to add a mobile ad campaign while 21 percent would optimize their websites for mobile use. In reality, optimizing your website for mobile users doesn’t have to be costly.

Finally, consider adding a loyalty program of some kind. With so much of the average small business’s revenue dependent on existing customers, it only makes sense to reach out to your customer base with rewards. There are more options than ever before for loyalty programs, from simple punch cards to sophisticated (yet affordable) mobile apps that make it easy to track customers’ shopping habits.

Want to take your online presence to the next level? Your SCORE mentor can help. If you don’t have a mentor, get online at SCORE to get matched with one, stat.  

Rieva Lesonsky
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