More than half of small businesses prefer recommendations passed on by consumers to each other to be more effective than paid advertising. That's the key finding of the latest Wells Fargo/Gallup Small Business survey. With fewer resources, the survey confirmed small business owners see more opportunity in talking to local merchants -- hairdressers, plumbers, or neighbors -- rather than spend money on expensive advertising. Online tools like wikis, blogs, and reviews are also becoming increasingly popular tools for small businesses looking to create buzz.
Source: Wells Fargo & Gallup, "Wells Fargo/Gallup Small Business survey".
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Customer reviews have a significant impact on what books consumers buy at online bookstores, with negative reviews carrying more weight. That's the key finding of a study conducted by the Center for Customer Insights at the Yale School of Management. Examining reviews at Amazon.com and Barnesandnoble.com, the impact of a negative review was found to be more powerful in decreasing book sales than a positive review is in increasing sales.
The study attributed this behavior to the credibility consumers place on the reviews. For example, multiple glowing reviews for a book may be perceived as hype generated by an author or publisher.
Disclosure: The study was co-authored by Dr. Dina Mayzlin, a member of the WOMMA Advisory Board.
Source: Dr. Dina Mayzlin, Yale Center for Customer Insights, "The Effect of Word of Mouth on Sales: Online Book Reviews".
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Podcasting and RSS feeds have become popular tools for marketers looking to spread word of mouth, but they still have a way to go before reaching the mainstream. A study from Pew Internet & American Life Project showed that only 13% of respondents knew what the term "podcasting" meant while only 9% were reported to know about "RSS feeds." Personal Internet security topics such as "spam", "firewall", and "spyware" had the highest familiarity at 88%, 78%, and 78%, respectively.
WOMMA's spin: this level of widespread familiarity is still amazing for a medium that's just barely a year old.
Source: Pew Internet & American Life Project, "The Spyware Survey".
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