Small Businesses Struggle With Finding New Customers More Than Anything Else [Report]

    April 14, 2014
    Chris Crum
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Gallup and Wells Fargo recently released results from their Q1 2014 Small Business Index.

The study found that attracting customers, targeting business opportunities, and finding new business were among the top challenges for small business owners in the U.S. 21% of owners cited these (combined) as the top challenge. Behind these, but significantly lower in percentage, were government regulation, the economy, healthcare/Obamacare, hiring qualified/good staff and retaining them, financial stability/cash flow, and costs/fees of running business/having enough money for capital investment.

In other words, the biggest challenge facing small business, by far, is simply getting new customers.

eMarketer has put out some charts based on data from the study. Here’s a look at the challenges, and how businesses view them:

With that data in hand, eMarketer turns to March data from Huzzah Media about the most successful marketing tactics that help small businesses “grab prospects’ attention”.

Friend referrals is by far the most successful at 52.2%, followed by advertising at 33.2%. Coupons and press articles have surprisingly little success at 3.5% and 1.3% respectively. Check out the report for the full graph and further analysis.

The data for the Small Business Index comes from telephone interviews with 603 small business owners, conducted from January 2nd to January 6th.

Image via eMarketer

  • Thaddaeus

    This is an interesting report – I’m surprised that so many small businesses spend so much time and money attracting new customers and totally ignore the customers they already have.

    • http://www.webwavedesign.com/ WebWaveDesign

      I agree, small business owners underestimate the importance of following up with the current customers.

      At the same time focusing on new customers helps them to expand
      business. If small business won’t expand within 3-5 years they’ll go away.

  • Gary Binette

    This is always going to be the biggest challenge, particularly for small businesses in the service arena – and I’m not talking about small businesses with 1500 employees, those companies are relatively seasoned and typically have a large enough customer base to sustain growth projections. It’s the companies with 50 employees or less that need to expand their customer base. At this stage of the game, if growth is the objective, new customers are needed. For the majority of us that fall into this ’50 employees or less’ category, the reality is – at the end of the day there isn’t much of a budget left for marketing/advertising,, and the small business entity just doesn’t have the recognition that a lot of it’s competitors have in the marketplace. The good news is – with a diligent, persistent sales effort, they will come. And when they do – two things are a MUST: 1. make sure your company excels in the quality of service delivered. It has to be a ‘wow’ experience for your customer, and it has to be maintained at a high level. 2. They will graciously want to be a referral. The report is accurate: Referrals are the name of the game. Use these new referrals to develop more new customers – and don’t let your foot off of the pedal. As revenue increases and profit soars, budgets for marketing/advertising receive more attention. As the word spreads, brand recognition follows. There are lots of significant challenges for small businesses, but it’s the most fun game to be in,,, in fact it’s the “best game in town.”