New Findings on SMBs and User Reviews

As many of you know I’m now working with Dan Miller and Opus Research on a mobile specific program (LocalMobileSearch). This program is about the evolution of the mobile market and the delivery of content and ads on mobile devices. Local is a key piece of that equation — hence the name. However it’s not just exclusively local.

As a general matter were interested in and curious about the reactions of SMBs to a range of emerging issues on the Internet, at the center of which is user-generated content and “online reputation management.” I’ve written a good deal about all the user reviews out there being a kind of “emerging crisis” for SMBs. So we decided to find out if they felt the same way.

We did an survey with AllBusiness.com, because the site’s visitors and members are SMBs. The survey was conducted online in early August. We were surprised to get lots of non-US responses in the just over 1200 we received. Among the 1200, we received 653 responses from North America (the vast majority were US). One must take the findings with the customary caveats about online surveys but there are lots of interesting things here that I’ll write more about later.

For now, here are some very high-level takeaways:

• Website penetration: 55% of SMBs responding to the survey said they had a website
• Most commonly used marketing methods: When asked about all media used to market their businesses, respondents identified websites, print newspapers, email marketing, print yellow pages and coupons/direct mail as the methods with the highest adoption and penetration
• Most successful methods: Identifying their “most successful” marketing methods, respondents named their websites, email marketing, print newspapers, coupons/direct mail, search engine marketing and print yellow pages, respectively
• Role of referrals: Nearly 60% of respondents said that more than half their business comes from customer referrals and “word-of-mouth,” while 30% said that “more than 75%” of their business is from referrals
• Awareness and tracking of review sites: Almost two-thirds (64%) of respondents were aware of online review sites and nearly 30% of this group said they actively track reviews, with roughly one-quarter indicating favorable online reviews have led to new business
• Attitudes toward online reviews: Among those aware of review sites, a striking 59% said consumer reviews “are a good thing and are helping us improve our business.” Yet even negative reviews are being embraced, with more than 50% of this category saying they had contacted unhappy customers to address complaints. Reviews are also being formally embraced in marketing materials, with 40% saying they had quoted customer reviews
• Interest in video: While only a minority of respondents had developed any video advertising (professionally produced or not), interest in video advertising is rising: 33% of respondents said they were evaluating developing video ads “in the next 12 months.”
• Why not doing online marketing: Among those who were not doing any online marketing (60%), the main reasons were:

1. Lack of budget (25%)
2. Confusion: don’t know how/where to begin (20%)
3. Lack of time or personnel to do it (15%)

Note: there’s a discrepancy between the 55% who said they had websites and the 60% who said they didn’t do online marketing. We didn’t specifically define “online marketing” and some respondents probably did not consider their site to qualify.

In terms of the core data we set out to obtain, the fact that a majority of respondents were not only aware of online reviews but some significant minority were tracking them was surprising to me. It was also somewhat surprising to see these respondents with a mostly upbeat attitude toward the phenomenon (click to enlarge):

n=303

Numbers exceed 100% because of the multiple responses permitted. And there’s some apparent contradiction in the answers: how can reviews be both “good” and “annoying”? But some people obviously hold both views simultaneously.

More later . . .

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