Word of Mouth Still best advertising for small businesses?

For some small business owners, word of mouth is still the most effective advertising tool.

Despite the growing number of Australian businesses that turn to social media sites such as Facebook and Twitter for advertising (although mainly Facebook), it may be that word of mouth is still the more popular and trusted avenue for finding out information about a particular business.

This is certainly the case for small businesses in Frankston, Victoria, where most of the small business owners interviewed say that social media hasn’t been very effective for advertising their particular business in comparison to word of mouth advertising.

Although most small businesses interviewed have set up a Facebook Page, only half use it regularly to interact with customers.

According to the 2011 Sensis Social Media report, “small-to-medium sized businesses have been lagging behind, although this seems to be changing.”

Frankston is small costal town, just falling into the metropolitan Melbourne zone, and has a population of roughly 130 000 people. According to 2006 census results, 62.1% of its residents have access to the Internet at home and most likely more now five years later. Therefore, Internet access is quite popular and readily available to most in the city.

However businesses such as Coopers Patisserie, which is quite popular in the city itself, haven’t been able to break through online and worker Amy says that most of the customers that come into the store are usually told by their friends or family to visit.

Even B’artiste Lounge which uses social media regularly and on a larger scale than most other small businesses in the area say that most new customers are introduced to the store by former patrons.

However, owner Kim thinks that social media, in particular Facebook, has added to the success of the business in its own way and is worth using since it allows the business to keep an edge over competitors for free.

“Why wouldn’t you use it?” she said.

 ”It’s huge exposure for [paying] nothing.”

Kim also highlighted the spammy nature of mass advertising emails and the ability to use Facebook more dynamically and create a ‘personality’ for the business online.

Peninsula Camera Centre is another business in Frankston that has also found social media presence helpful in engaging customers; primarily regular customers that are able to use the page to find out what new stock and services are available.

Thomas, from the store, says that their Facebook page has been effective and can be maintained easily if they just check it a few a times a week.

However, the general consensus remains that whilst social networking seems to be slowly picking up amongst small businesses, word of mouth still trumps social media when it comes to advertising in small cities such as Frankston.

Despite the popularity of social networking, the reason that it’s failed to create a buzz in this small town when it comes to small business advertising is perhaps due to the inconvenience of it. In many ways, it would be easier to just call the desired store and ask about products, or in the case of businesses such as Coopers Patisserie, a general idea of what’s offered would already guessed given the nature of the business.

Another factor to look at would be geography. It takes one roughly an hour to drive from Melbourne City to Frankston City therefore it would be more convenient for those closer to the bigger City to be tempted by the bright lights and choice available to them in Melbourne.

It doesn’t mean that it’s all doom and gloom when it comes to small business and social media.

Certainly those offering a product rather than service could do well when it comes to using social networking to advertise. Although Emily Doig’s ‘Tipsy Toes’  Facebook page has less than 1000 likes, she’s still been able to use it to direct to her  main website, which according to The Australian, was visited around 3000 times a week and is rising in hits.

Overall, trends seem to show that for any business to have hope of being successful online, there needs to be a regular presence. Unlike big businesses where someone would usually be employed to take care of the company’s social media contributions, small business owners usually have to rely on their own knowledge of the web to keep an online presence.  And whilst it’s hard to start a small business in today’s economic climate, especially in small cities, all companies – regardless of size, should have a certain about of tech savviness.

As Kim from B’artiste Lounge pointed out, it’s a great marketing tool for free regardless of your regular demographic. Given the amount of new people joining social networking sites each day, you never know who could be a potential customer.