Consumer Buying Behavior: Interesting Survey Results
Pretend for a minute that you just moved into a new city and need to find a new auto repair shop. You find several nearby each with similar service/pricing, and therefore have to make a decision based on whatever information you can quickly and easily obtain. In most competitive markets, this scenario plays out frequently as new potential customers evaluate where to take their business. As a business owner myself, I thought it would be interesting to send out a quick survey to my email contact list and evaluate consumer buying behavior when looking to hire/use a business for the first time.
For this survey, I asked each respondent to rate 4 sources of consumer driven information on a scale of 1 (least reliable) to 10 (most reliable) in determining whether or not they would use a company for the first time. They were also asked to briefly explain their ratings. Here are the averaged ratings for each category:
Disclaimer about the survey method.
I did this survey on a small scale and used a rather informal distribution method (my email contacts). The results above are from about 40 email responses and although I would consider this survey sample small, I think the results still provide a relevant estimation of today’s consumer buying behavior. Using the data above in conjunction with the additional explanations provided and my personal knowledge of the survey respondents’ demographics, I made the following observations:
Observation #1: Online Reviews
Anonymous online reviews scored least reliable as many of the respondents noted the increasing trend of fake reviews and the belief that only a small portion of customers with extreme experiences (either good or bad) take the time to write reviews online. However, many respondents pointed out that online reviews are the most plentiful and easy to access of any of the above sources and therefore are used most frequently when evaluating businesses.
Observation #2 BBB
The Better Business Bureau easily attracted the most polar responses garnering trust from older respondents (40 and older) and being more or less ridiculed by the under 40 crowd. The older respondents used phrases such as “feel good”, “trust”, and “well known” when describing the BBB. The younger respondents had more verbose comments such as these:
“The BBB sticker on a business actually means nothing to me and I would even go so far as to say the sticker makes me wonder what the business is hiding from — are products and services of such poor quality that they need the sticker to encourage me to use their business?”
“I’m sure there are lot of good companies that aren’t members, and a lot of crappy companies who are members.”
“The BBB is just trying to make money like everyone else. I don’t know that they always have the consumers best interests at heart.”
Another factor that kept the BBB at the bottom of the pack was that many respondents simply did not know enough about their membership process or how a BBB membership correlates with trustworthiness.
Observation #3 Independent Survey
Most respondents considered a customer satisfaction survey to be a highly reliable source when evaluating a business as long as the survey wasn’t gamed and had a good sample size of respondents. In fact, a few respondents indicated that they would trust a survey even more highly than a referral due to the fact that a referral is based on one person’s experience where a survey is a broader sampling of experiences. The single common factor that held back customer surveys is that they are nearly impossible to find for local businesses. This is one source customers would like to see more of.
Observation #4 Referrals
It comes as no surprise that people generally trust referrals above any of the other sources mentioned. This source was mainly included as a base to measure against. Any business owner knows the biggest downside to utilizing this source is that you are limited by the willingness and availability of your satisfied customers to do this for you.
Takeaways for Business Owners
#1 Online Reviews Still Affect your Business
Just because online reviews have the lowest credibility does not discount the fact that most of your customers will view them and be influenced by what other people are saying about you online. In recent years, online reviews have become the primary source for customers looking to compare similar companies. Pay attention to the various review websites and actively encourage your satisfied customers to post their positive experiences online.
#2 Is BBB worth the Cost?
There are many forms of BBB membership to consider as well as your business type and target market. If you are in a business with high amounts of distrust and are targeting older customers, the BBB might make sense. Overall BBB usage by consumers seems to be on a downward trend and may soon become obsolete as review websites become better at filtering fake reviews and customers have more options for comparing businesses online.
#3 Utilize customer surveys in your marketing
Whether you serve 1 customer a month or 500, customer feedback collection can be incorporated cost effectively (thanks to the internet) with your customer service and marketing plans. We even offer a free trial of our professional survey service, Survey Local, so that you can see how easy and valuable feedback collection can be. Also, Survey Local gives you the option to publish your survey results right on your website (and on ours) so that potential customers can easily find and read them. Making this information available to potential customers will really help you stand out from your competitors.
#4 Promote Word of Mouth Marketing
As mentioned above, the best way to get more referrals from your customers is to first of all find out what you are doing right and where you need to improve. It doesn’t matter how good you think your business is because you’re not the one making the buying decision. Fortunately, the internet makes feedback collection more affordable and easier than ever.
The Domino Effect
All the sources measured in our survey are direct reflections of your customer service. By measuring and improving your customer service you can effectively improve your results in all 4 of these categories. Our survey tool is designed to easily integrate 3 of these sources by collecting customer feedback, screening the good from the bad, and helping you get noticed both online and off for the good things you are doing. Give us a call to get a free 30-day trial of Survey Local today.
Comment on this post if you agree or disagree with the survey results above so we can broaden the sample size!