“Successful people ask better questions, and as a result, they get better answers.”
In discussions with small business owners, when asked, what method of tracking do you use to measure your new sales, the most common response is “I ask my consumers where they heard about me”. Usually the second part of the conversation goes this way – “word of mouth is my best form of advertising” and “I tried many forms of advertising, none have worked for me”.
For this particular post I want to focus on two areas:
1) How word-of-mouth (WOM) needs support
2) How to leverage in-store questions and online traffic
I am a very strong believer in WOM and the incredible growth it can generate. That being said, WOM often takes more credit away from supporting advertising vehicles, giving the impression to a SME that their advertising is not working.
A typical conversation with a new customer may go like this:
Bus Owner: Thanks for coming in. How did you happen to hear about our store?
Customer: A friend recommended you
Bus Owner: That’s great, if you liked the service today, please tell your friends
The above dialogue is good, however, what if the conversation was slightly changed:
Bus Owner: Thanks for coming in. Can I ask you two questions about how you come to our store today?
Bus Owner: How did you hear about out store?
Customer: From a friend
Bus Owner: Thanks, how did you get our address?
Customer: From your website? From my friend? From the Yellow Pages?
Bus Owner: That’s great, if you liked the service today, please tell your friends about us and have them visit my website, Yellow Pages ad, etc. for my store details.
Of course the exact questions can be changed and tailored, but the main point is that in most cases WOM is supported by another medium that connects the buyer and the seller. People will refer people they like to people they trust, however, those same people will usually not know all the details about your business. WOM can accelerate your sales when you have a support mechanism behind it and you incorporate it into your WOM strategy.
In-Store Questions and Online Traffic
Continuing with the example above and examining customers who indicated they used the Internet to find your address, we need to examine our web analytics. The first question I usually get is, should I ask customers how they found me on the web? I advise against asking any questions about how people found you on the web. The reason is that there is a lot of confusion among web users – so the typical response is Google – even if they used MSN, Yahoo or something else. This gives the illusion that all web traffic is generated from Google – which is not the case. As a business owner, if you have a good analytics package – all you need to know from your customers is whether they saw your website. Once you have a in-store count you can cross-reference this with your web analytics to find out what is and is not working online.
As a side-note I want to share a quick story. I helped a auto dealer in Calgary with their tracking and customer acquisition strategies. Calgary has two major newspaper dailies – the Calgary Herald and the Calgary Sun. We started by creating a baseline, by spending one month asking customers how they came to stop by the dealership. Of the two newspaper dailies what we found was that 25% came from paper 1 and 15% came from paper 2. Here is where it gets interesting – this particular dealership had not advertised in paper 2 for a couple of years, yet 15% of new customers said they found the dealership there. Here is my take on this non-scientific survey – when asked, some customers will simply answer what comes to their mind first as opposed to what is actual. Not because they are dishonest, just that they most likely don’t care and will answer to shut you up. The same thing is happening on the web – I bet I could take 10 people who use Yahoo Search as their primary engine and half of them, when asked quickly, would probably say Google. My point is that only relying on asking people how they found you on the web can be misleading, whereas this potential misleading information does not exist with web analytics.
Here are some stats from my mom’s business, The Bra Lady. What we have learned over the past 4-years of tracking results is that WOM is by far her #1 way of generating new business with the Internet as her primary support mechanism to WOM. What we have also found is that many people are referred to her business, but use search engines and directories to find her web address. Probably 80% of her new clients indicate that Internet played a role. NOTE: this may be high and in her particular situation makes a lot of sense – because she is a home based business. However, when I worked with Auto Dealers – this number was about the same and dentists were up there as well.
On a monthly basis we compare the number of referrals who indicate the Internet was a source of them finding her to her actual analytics – we use Google Analytics to understand better exactly how these people ending up finding her.
Here is the aggregate view:
In the above you will notice that the top three referrers of traffic are Google, YellowPages.ca, and Direct. Examining just the top three referrers, typically I would examine further both the traffic from YellowPages.ca and Google.
What I notice is the majority of keywords from Google are good quality. You will notice that keyword #20 – the one that references ebay is not considered a good keyword, however, this is the nature of search engines. It is important when examining search engine traffic to look at the keywords to get a accurate picture. The conclusion is that Google is generating good traffic.
What I notice is that the top referring URL from yellowpages.ca is the merchant page that was built for her business by YPG – this is good – it supports the decision to have the website URL located on this page. If I continue to examine further I see that users were searching using keywords we anticipated and specifically in Calgary. What I like about directory traffic is that people don’t surf directories. They go there for a purpose – usually to find something in particular – so the traffic generated here is high-quality.
This is pretty self-explanatory.
You will notice that we are also showing other top referrers in Facebook and CalgaryPlus.ca. I did a posting back in July of this year – Facebook – Can Local Business Florish in Social Networking? and its potential impact on local business – watch for this. For those of you interested – here is an article I posted back in 2005 on the strength of media companies and front-page placement – Power of Front Page Placement.
In conclusion – I would challenge any SME to dig a little deeper in 2008 in terms of their tracking and understanding of customers. Also I would encourage you to not presuppose answers as to where online traffic might come from. In Canada – we are continually bombarded with US news and information about the Internet, which sometimes gives us a US perspective on traffic as opposed to a CDN perspective on traffic. Build your measurement criteria, find the tools to track and examine them monthly – this will generate great results for your business in 2008.