Why Word-of-Mouth Marketing Will Never Go Out of Style
Word-of-mouth marketing has been around for a very long time. It happens when people who have had positive experiences with a service or product recommend it to others—making word of mouth a relatively hands-off promotion technique.
This simple marketing approach is a significant part of small business success, especially in local communities. And the Internet has provided a new frontier for word-of-mouth marketing through blogs, reviews and social media, increasing the reach of this highly effective form of small business marketing.
What makes word-of-mouth marketing so effective for small businesses?
People trust their friends and family
A 2013 Nielsen study found that 84% of people trust word-of-mouth marketing over any other form. The reason for this is simple: we trust the recommendations of our friends and family, who presumably have our best interests at heart. Since advertisements always portray a company’s product or service as appealing, many consumers are skeptical. However, friends and family or other consumers with no obligation to promote a product or business are more likely to give their honest opinions. Customers who have unexpectedly positive experiences are more likely to share them with others.
Recommendations are personalized and targeted
Not only do people build a business’ word-of-mouth reputation when they recommend it to a friend, but online reviews and blog posts about a small business can be tailored to the customer who best benefits from them, as they’re relevant to their personalized search queries. Many customers use search engines and trusted review websites to check on a brand or small business, and the information they find can influence their decision to spend money on the product or service. A 2011 study by Google found that online sources are a driving force behind word-of-mouth marketing conversations. Whether through social media, blogs or review websites, customers seek recommendations for products or services they are interested in and, in turn, recommend those products and services to people who may share that interest. This word-of-mouth advertising reaches a more targeted group of customers than generalized advertising and is extremely useful for small businesses with a very specific client base.
Companies and customers can connect
Social media, blogs and online reviews open many doors for small businesses. Word-of-mouth marketing is no longer limited to just the customers in the conversation. Companies can now engage with customers on Twitter, Facebook and forums and respond to reviews and feedback from Yelp or independent blogs. Word-of-mouth marketing is influenced by personal relationships and trust. A small business that interacts directly with customers on online platforms makes them feel more connected. Engaging with customers builds trust, and increased trust makes customers more likely to recommend a business through word of mouth.
When it comes to straightforward tactics for small business marketing, promotion by word of mouth is one of the most effective ways to go. However, it takes more than just a reliable product or service to secure a recommendation. While word-of-mouth marketing is much more cost-effective for small businesses than traditional advertising, it still requires a budget to keep up with online reviews and social media chatter, as well as dedicated employees to manage social media accounts, track keywords, and respond to online reviews. Creating a trusted relationship between a company and its customers takes time and devotion but is rewarded in time.
Read more small business marketing tips from Fundation, provider of online small business loans, by visiting our blog.
Small Business Marketing Tips: 5 Easy Ways to Market Your Small Business
The marketing success of a small business depends on its ability to reach the right customers at the right time with the right message. How can you market your small business in a way that captures the most attention?
Here are 5 small business marketing tips to help your company hit the ground running.
Community outreach
The U.S. Small Business Administration suggests joining community organizations and serving on city boards or committees to better connect with the customers your business is serving or could potentially serve. You can host your own networking events or sponsor community events such as charity drives. If you enjoy public speaking, you can volunteer at schools and other organizations or speak on professional panels. Personalized interaction makes a good impression, and your local community is a great place to grow your roots and gain exposure to a friendly audience.
Engage online
Having a website to provide basic information about your company is important; you can drive traffic to your website by engaging with potential customers online. Social media, Q&A sites and forums encourage interaction and allow you to personalize your brand, connecting with your audience and driving potential future sales. Resources like Hootsuite allow you to manage your business’s social media accounts more efficiently, bringing all accounts under one integrated management platform. In addition, sponsored ads and promoted posts on websites like Facebook and Twitter can help you reach a wider audience.
Networking
Attending conferences, panels and meet-and-greets is a great way to get your business name out. These events will enable you to give your pitch in person, building your referral network and putting your business card in the hands of people who can now put a friendly face on your business’s name.
Offer promotions
People are more likely to spend money on a product or service once they are sure that it is useful or worthwhile. Don’t be afraid to give things away free or for a significant discount. Online coupon codes and giveaways through social media are a significant part of customer engagement, and you can also provide special promotions for partners to distribute to their own customers. Discounts can be an incentive for new customers to try out your product, and once they’ve had their first positive experience, they’re more likely to become repeat customers.
Start a newsletter
To keep your business fresh in the mind of your customers, start an online newsletter to email them periodically. The newsletter can introduce new products or services and updates to your business, and it can discuss trends and news that affect your field. You can even include testimonials and reviews from customers. Email marketing is an effective way of keeping customers in the loop, increasing the likelihood that they will engage with your business in the future.
Deep pockets aren’t necessary for successful small business marketing. A conventional term loan can go a long way in funding your marketing efforts to increase your profits. Fundation offers fixed-rate online small business loans, providing your small business with the flexibility to focus on your marketing initiatives.
Are you considering an alternative business loan to invest in your business expansion? Contact Fundation today to discuss the possibilities.
Business Credit Scores vs. Personal Credit Scores: Why Lenders Need Both
Small business owners have a lot of challenges that need to be addressed in order to find success. Unsurprisingly, many of these are financially based, which is why so many people find themselves taking out business loans to get things off the ground. That being said, some small business owners are often surprised to find that business lenders will often ask for business credit scores and personal credit scores when taking out a small business loan—here’s why.
Your Personal Credit Score Still Matters
Many small businesses are operated by either one or two individual owners. Lenders can therefore learn a lot about the creditworthiness of the business and the financial acumen of the owners by looking at the owners’ personal credit report. A good personal credit score, combined with other factors, may indicate to a lender that the business is likely to be well-managed and successful. Additionally, many lenders require a small business owner to personally guaranty the repayment of the loan, in which case the owner’s credit score would factor heavily in the lender’s determination of whether the personal guaranty would be effective.
The Importance of Knowing Your Personal Credit Score Along With Your Business Credit Score
Since an initial small business loan will most likely be contingent upon your personal credit score, it’s extremely important to know where you stand. Personal credit scores can shift and change over time—occasionally, to a drastic extent, depending on the circumstances. There are many affordable credit score providers online for those who are looking to get small business loans and who aren’t sure of their personal profile.
If you’re willing to spend a bit of money, those companies will not only allow you access to personal and small business credit reports from all three major bureaus, but you’ll be notified of any major changes that occur, as they happen.
What if My Personal Credit Score Is Poor?
This is a common question among those who are looking to obtain small business credit. A poor personal credit score, just like a poor business credit score, can be challenging to overcome, but it’s important to realize that it doesn’t tell the whole story of who you are and what your business is capable of.
It’s possible to improve your personal credit score if you take the right steps to do it. This can be a time-consuming process, and it’s not uncommon for people to feel as if they’re not making any progress. Using a secured credit card, making sure never to miss payments and working with a professional to improve your personal credit score can all be helpful. If you can do this before requesting a small business loan, you’ll be in even better shape.
Have questions about your personal or business credit score and want to discuss your financial situation with a nonbank lender? Contact Fundation to discuss the conventional term loan options suited for your company’s specific needs and situation.
5 Key Elements of Online Marketing for Small Businesses
Growing a small business can be an immense challenge, regardless of industry. This is especially true for small businesses that have a lot of competition, both locally and nationally. The key to finding success as a small business is to work toward improving your marketing strategy in as many ways as possible. Still, many companies focus on the wrong types of small business marketing, which can end up being extremely costly. Online marketing is the future for today’s small businesses, and it’s not nearly as difficult to get started as you might think.
Here are 5 key elements of online marketing for small businesses that you simply can’t afford to ignore.
1. Strong Web Design
While you may not consider your website part of your small business digital marketing plan, it may be one of the most important elements at play. You could have the best products or services out there, but they’re not going to sell if your website is stuck in the past. Also, never overlook the importance of making your site easy to view on mobile platforms, as you have to expect that much of your audience will be on their phones when visiting your website.
2. Blogging / Content Marketing
Blogging is a huge part of small business marketing online. It’s one of the best ways not only to connect with an audience but also to assert yourself as an expert in your field. Starting a blog is completely free, and building followers will happen over time if you’re careful with how you schedule and share each post. Finally, your blog should be connected and linked to and from your website, which will help drive traffic in both directions, boosting your small business’ digital marketing efforts.
3. Search Engine Optimization (SEO)
You could have the most beautiful website in the world, but if people aren’t able to find it, it won’t be anywhere as effective as it could be. This is where SEO, or search engine optimization, comes into play. Improving SEO should be one of the main components of your small business online marketing strategy, as it will make it easier for your audience to find you, regardless of how big or small your business is. What many people don’t realize is that the SEO techniques are constantly changing. For best results, work with a firm that has a deep understanding of SEO and how it works.
4. E-Newsletters
While direct mail may quickly be becoming a thing of the past, it’s beginning to take a more digital form. E-newsletters are the ideal way to concisely help your audience learn about what’s happening with your business and how they might benefit. Starting an e-newsletter is free, and the larger you can grow your list of subscribers, the more effective it will be as part of your small business online marketing strategy.
5. Social Media Marketing
Social media is extremely popular today, and this isn’t going to change anytime soon. Learning how to use social media to your advantage is essential to finding success in digital marketing, and it can be extremely cost-effective. Regularly posting quality, educational content on your Facebook or Twitter profiles and properly tagging your posts will open up a discussion between you and your audience, thus improving the visibility of your company.
Online marketing is truly the way of the future, and ignoring this trend is going to cause your small business to fall behind. It can seem overwhelming at first, but the benefits (and low costs) that come with digital marketing are hard to ignore. Learn the finer points, kick the process off, and watch as your audience and customer base grow.
Be sure to read some of Fundation’s other articles for more small business marketing tips and financing advice.
Need alternative financing to start or improve your small business digital marketing efforts? Contact Fundation to learn about the short-term business loans available to help take your company to the next level!