Wells Fargo Survey: Optimism Softens, but Business Owners look to Marketing to Attract New Customers in 2020
06 Februar 2020 - 02:00PM
Business Wire
The majority of business owners have a positive outlook on their
financial situation and plan to use digital marketing to attract
new customers
Small business owner optimism softened a bit for their
businesses and future expectations in the latest Wells Fargo/Gallup
Small Business Index. Respondents also indicated attracting new
customers continues to be a key challenge, as many owners share
plans of how they will garner more business this year.
Small Business optimism softens in Q1 2020
Conducted Jan. 3-10, the survey showed a 10-point decrease in
overall optimism. One indicator underscoring this dip in optimism
is the finding that fewer small business owners (24 percent) are
planning on adding jobs or positions at their companies this year –
lower than last quarter. However, more than 80 percent of owners
said their current financial situation is somewhat good or very
good, and 84 percent said the same would be the case 12 months from
now. Additionally, 64 percent of business owners said they expect
their revenues over the next 12 months to increase a lot or a
little and 81 percent say their company’s cash flow will be very
good or somewhat good over the next 12 months.
When asked about the current state of the U.S. economy, 67
percent rated it as either good or excellent (representing a
4-point increase from last quarter), yet only about a quarter of
business owners say the U.S. economy affects their business a great
deal.
“It’s promising to see that, in general, business owners remain
optimistic,” said Elli Dai, head of Small Business and Personal
Lending Group at Wells Fargo. “As we look ahead to the rest of the
year, it’s helpful to know what’s impacting their businesses and
the decisions they are looking to make. Only when we understand our
customers can we better support their financial goals and continued
growth.”
Attracting new business remains a key challenge
The survey also focused on owner sentiment pertaining to
attracting customers and new business – a top challenge that has
been highlighted consistently each quarter. When asked if business
owners have more trouble attracting new customers or retaining
existing customers, 82 percent said attracting new customers is the
bigger problem. The biggest challenges business owners face when
trying to attract new business included the basics of finding and
then retaining new customers, creating the right mix of advertising
and marketing, dealing with competition for customers, keeping
prices low, customer service and staffing, and having enough money
to run the business effectively.
When asked to think ahead to the next 12 months and what actions
they would take in order to attract and retain customers, business
owners highlighted increasing networking opportunities (65
percent), obtaining customer feedback (52 percent), increasing
social media presence (51 percent), updating their website (49
percent), and increasing spending on advertising and marketing (38
percent).
The survey focused on the growing importance of online user
reviews of their business. Over half of small business owners (53
percent) have access to online user reviews and 69 percent of those
business owners say these user reviews are extremely or very
important to their business. Two-thirds of owners with access to
online reviews say they encourage their customers to post positive
reviews, and about the same percentage say they post responses to
online reviews where necessary.
“Digital marketing now can play a major role for small business
success – allowing them to engage with customers directly through
social media, get real-time customer feedback, and build their
online reputation with customer reviews,” said Linda Soldatos, head
of Wells Fargo’s Small Business Marketing. “Investment in managing
their online presence can have a great payoff for small businesses
in attracting and retaining customers.”
Other top challenges
Technology was cited as the second highest-ranked challenge, at
10 percent this quarter, including cybersecurity issues and keeping
up with the latest technology and computer updates. Taxes were also
rated as a top challenge at 10 percent.
Wells Fargo/Gallup Small Business Index Scores: Q1 2019 – Q1
2020
Overall Index Score
Present Situation
Future Expectations
Q1 2020 (surveyed January
2020)*
132
63
69
Q4 2019 (surveyed September
2019)*
142
67
75
Q3 2019 (surveyed July 2019)*
136
64
72
Q2 2019 (surveyed April 2019)*
129
62
67
Q1 2019 (surveyed January 2019)
106
46
60
*Using updated web-based surveying
methodology. Results from the web mode are not directly comparable
to the prior phone survey.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
investment and mortgage products and services, as well as consumer
and commercial finance, through 7,400 locations, more than 13,000
ATMs, the internet (wellsfargo.com) and mobile banking, and has
offices in 32 countries and territories to support customers who
conduct business in the global economy. With approximately 260,000
team members, Wells Fargo serves one in three households in the
United States. Wells Fargo & Company was ranked No. 29 on
Fortune’s 2019 rankings of America’s largest corporations. News,
insights and perspectives from Wells Fargo are also available at
Wells Fargo Stories. Additional information may be found at
www.wellsfargo.com | Twitter: @WellsFargo.
Methodology
Results for Wells Fargo/Gallup Small Business survey are based
on web interviews with 600 small business owners, conducted during
the period January 3-10, 2020., Beginning in Q2, 2019, interviewing
formally transitioned from outbound phone data collection to a
national small business web opt-in panel provider.
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version on businesswire.com: https://www.businesswire.com/news/home/20200206005061/en/
Media Allison Vail, 704.715.1817
Allison.Vail@wellsfargo.com
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