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Consumers Favor Small Businesses Because of Their Customer Focus

Prices have little influence on consumers’ decisions to go with small companies

April 21, 2014 | Retail & Ecommerce | SMB

US consumers are choosing small businesses because of the personalized experiences they provide compared with larger businesses. According to April 2014 data from AYTM Market Research, personal service was the No. 2 reason US internet users preferred small businesses vs. large companies, cited by 52.7%. This trailed supporting the local economy (56.2%), but it led all other options by at least 23 percentage points. Lower prices did not play a huge role in choosing small businesses. In fact, 61.2% of respondents said they would pay higher prices to support small businesses.

Reasons US Internet Users Prefer Small Businesses vs. Large Companies, April 2014 (% of respondents)

An August 2013 study by Web.com and Toluna found similar results. The factor that US consumers considered the most important when choosing small businesses over other types of businesses was customer service (86% of respondents). Personalized and intimate experiences as well as small businesses’ understanding of customers’ needs were also popular, each cited by 84%.

Factors that US Consumers Consider of High Importance When Choosing Small Businesses, Aug 2013 (% of respondents)

Web.com/Toluna found that US consumers and small-business decision-makers were relatively aligned when it came to characteristics they associated with small businesses, but the latter tended to focus more on what went into building the company. Unsurprisingly, a focus on the customer was the top characteristic cited by consumers. Meanwhile, small-business decision-makers stressed the fact that businesses of this size were owner-operated and accountable.

Characteristics that US Consumers and Small-Business Decision-Makers Associate with Small Businesses, Aug 2013 (% of respondents)

As small-business decision-makers focus on building committed businesses that are easy and friendly to work with, they’re creating personalized, customer-focused environments—and drawing consumers in as a result.

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