SMBs Look to Word-of-Mouth More Than Social Media

December 15, 2011

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | Data-driven | Digital | Local & Directories / Small Biz | PR | Social Media | Staffing

zoomerang-customer-attraction-methods-by-smb-dec11.gifThe top 3 ways SMBs plan to attract customers in 2012 are word-of-mouth (25%), repeat business (25%), and advertising and marketing (22%), while social media will be the primary source of customer attraction to only 11%, according to [pdf] a survey released in December 2011 by Zoomerang in partnership with GrowBizMedia. Data from “SMB Business Perspectives: 2011 Results and 2012 Projections” indicates that SMBs are evenly split on whether or not they will use social media tools in 2012. These figures are substantially different from results of a November Constant Contact survey, which found 81% of small businesses to be using social media marketing, up from 73% 6 months earlier, with 47% saying their use of social media has increased substantially over that time period.

The primary reasons cited for social media use by the Zoomerang respondents were affordability (66%), use by customers (56%), and potential as word-of-mouth referral source (55%), while the primary reasons for not using social media were reported to be lack of perceived value (41%), a business reliance on word-of-mouth as a referral source (37%), lack of use by customers (26%), and personal discomfort with using the channel (25%).

Marketing and Sales Top Investment Plans

The top 3 common business sectors that SMBs plan to invest in are marketing (35%), sales (28%), and technology/IT (22%), with product/service expansion (20%) closely following. Education (13%), communications (11%), and staffing (11%) are important areas of 2012 investment to relatively fewer SMBs. In fact, about two-thirds of respondents do not plan to hire more employees next year than they did this year. Of those hiring, 44% plan to add 1-5 employees, while 19% plan to add 6 to 10.

Goals Unmet, But Optimism Remains

Half of the SMBs surveyed say they are falling short of meeting most or all of their 2011 business goals, compared to 43% that are on track (37%) or have already met (7%) their goals. Even so, respondents appear relatively upbeat about the coming year: 40% say they are either optimistic (32%) or very optimistic (8%) about their business performance heading into 2012, compared to 28% who are either pessimistic (21%) or very pessimistic (7%).

Client Growth Top Challenge, Area for Improvement

zoomerang-years-biggest-business-challenge-smbs-dec11.gifCustomer or client growth was by far the biggest challenge to SMBs this year, cited by 44% of respondents, ahead of budget constraints (32%) and customer or client retention (32%). Not surprisingly, client growth is also overwhelmingly the most important area of focus for improvement in 2012, cited by 60% of respondents. Customer or client retention (38%) will also be an area of focus for a significant proportion of SMBs, while roughly 1 in 5 will look to improve their product or service expansion, budget constraints, and communications/marketing/PR.

Other Findings:

  • 14% of SMBs experienced business development and communications/marketing/sales growth in 2011, making those the top-performing business sectors. However, more respondents reduced their business development staff than increased it (13% vs. 6%).
  • 61% of respondents say they were negatively affected by the economy this year.
  • The majority of SMBs plan to neither diversify nor narrow their business scope in 2012.

About the Data: Zoomerang distributed a survey to SMB decision makers over a 4-day period from November 3-7, 2011. In total, 1,003 SMB decision makers completed the survey.

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