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Why being a good neighbour is good for business


Small businesses with strong neighbourhood networks get more referrals and increased customer reach, proving once again that, like the TV show says, ‘everybody needs good neighbours’.

In general, consumers spend around 24% of their monthly budget with smaller businesses. But when it comes to travel, this figure drops to 16%, with consumers spending more of their travel budget (84%) on larger more established travel brands. 

 

This is according to research commissioned by American Express in light of its newly launched Shop Small campaign.

 

Despite the spending gap between big and small, there has been an increase on small business travel spend since last year which saw only 11% of travel budgets go to the little guys, the report read.

 

So how can you get more customers through your door?

 

The research has revealed that two thirds of consumers would choose a small business or recommend it to others if it supported other local businesses. Firms with strong neighbourhood networks reported increased sales through referrals (53 per cent), a sense of satisfaction from supporting neighbourhood economies (43 per cent), and increased customer reach (41 per cent); demonstrating that it pays to work with your local peers.

 

Peter Strong, CEO of the Council of Small Business of Australia (COSBOA), observed: “Australia is a nation of neighbourhoods where we put down roots we keep planted for years, so we invest in the places we call home. 

 

“Loyalty may be an old-fashioned concept, but when you consider that the majority of Australians have lived in their local area for three years or more, the longevity of local businesses is important.”

 


Written by: Gaya Avery
Published: 6 November 2017


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