ANTenna Blog -- Business & E-Business

The short answer? Small businesses are looking for new customers! And where do they get info on what to buy? Online referrals and search top the list.

Bredin Business Information is the latest company to try to probe the minds of small businesses, this time with a February survey of businesses with fewer than 500 employees.

The survey was designed for companies looking to market TO small businesses, but I think it has some good insight FOR small businesses as well, in terms of setting a baseline for what other companies like yours consider most important.

First off, the biggest business challenge facing the business owners surveyed is overwhelmingly the need to find new customers. Some three quarters of the respondents ranked it in the top three. Only managing costs (>70%) even came close. Other key concerns were retaining current customers (>50%), and maintaining prices (~35%). Finding money to pay the bills ((`25%) and staying in business (<20%) were also on business owners' minds. New products, competition, retaining employees, keeping them productive, and avoiding layoffs all got single digit responses.

That makes sense -- in a first-things-first sort of way -- because unless you get customers, you're not going to be able to deal with the other issues. If you're not thinking about bringing in new business, you are definitely out of step with your peers.

BBI also asked where small busineses got information on products and services for their businesses. Online, small businesses revealed strong preferences for referrals from friends (>70%), followed by search( <60%). Educational Web sites garnered about 45% of top ratings, and email newsletters got almost 40%. Surprisingly, social networking fared very poorly here, getting less than 30% top ratings, while blogs, Facebook, forums and chat rooms, LinkedIn, MeetUP, and Twitter did even worse.

I'm not sure I get that, as those services are really nothing more than the modern version of referrals from friends. It seems there's still a lack of trust of these kinds services compared to a referral from someone you already know.

Among offline sources of info, there was much more limited variation, with tradeshows, postcards and catalogs, newspaper/magazine stories and print newsletters all drawing between 40% and 50% of top ratings. Newspaper/magazine ads followed, then radio/TV ads and phone calls.

Finally, BBI also asked what small businesses thought was most important when buying something for their businesses. No suprise that high value (>60%) and low price (>50%) topped the list, followed by reliability (~35%). But I was suprised to see that the low scores for personal relationship with vendor (~5%)and leading brand (<5%).

Conventional wisdom holds that small businesses typically buy brands they know from people they trust. Today's mixture of hard times and online transparency seem to be pushing those traditional factors aside.