- Gallup’s recent Consumer Confidence in Institutions Survey reveals Americans’ confidence rating among 17 different institutions
- The public’s confidence in small businesses surpasses that of any other institution
- 75% of Americans have “a great deal” or “quite a lot” of confidence in small business
As major American institutions work to expand, grow and merge to efficiently meet the increasing demands of consumers, Gallup’s Consumer Confidence in Institutions Survey (2020) reveals that bigger isn’t always better.
Over the past three decades, their survey — which assesses the public’s confidence in American institutions such as police, banks, new media and more — has consistently found that small business confidence surpasses that of any other institution.
The majority of Americans feel highly confident in small businesses
The most recent findings from the 2020 Consumer Confidence Survey indicate that 75% of Americans have “a great deal” or “quite a lot” of confidence in small businesses — making it the highest rating of any of the 17 institutions tested this year. This means that Americans are more confident in small businesses than the military, criminal justice system, Congress and even the medical system. We’ve listed a breakdown of how confidence levels differ among these major institutions:
- Small businesses: 75%
- Military: 72%
- Medical system: 51%
- Criminal justice system:24%
- Congress: 13%
Conversely, when it comes to big businesses, the public’s confidence is seriously lacking. The poll revealed that only 19% of people are highly confident in this institution, making the public’s confidence in small businesses over three times higher than big businesses.
Why is the public so confident in small business?
Although they are small, they are mighty, and there’s a lot we can learn from America’s positive attitude towards small businesses. Gallup suggests that Americans’ confidence in small businesses could come from a variety of factors such as their investment in local communities and ability to create local jobs. In fact, in 2019, small businesses were responsible for 1.9 million net new jobs in the United States.
In a similar Gallup poll assessing the reasons behind America’s confidence in small businesses, representing the American Dream and being the backbone of the economy accounted for 29% of the public’s confidence in them. Of those surveyed, 28% of people admitted that their confidence in small businesses comes from the business’ ability to be personally invested and accountable to customers.
Surprisingly, only 1% of respondents revealed that having a positive experience dealing with a small business had something to do with their confidence in them. What the data tells us is that when it comes to public confidence, Americans place high value on an institution’s dedication to its consumers and investment in improving both the economy and local communities.
What does this mean for small business owners?
Despite the public’s attitudes toward small businesses, big businesses like Amazon and Walmart typically rake in higher profits. Often big businesses deliver lower costs and higher efficiencies, making it difficult for consumers to resist, regardless of their small business preference.
As small businesses become more successful, they may meet the demands and pressures to grow and increase their profit margins. The dilemma is that this may also increase the risk of acquiring more negative feelings toward the business or, at the very least, less consumer confidence in it.
That said, it may be worth maintaining the fundamentals of a small business no matter what your size. This could mean a bigger business adopting a model of smaller businesses operating as separate, more personally invested or local units — similar to a franchise or car dealership.
Big or small, businesses should also maintain a stake or investment in their community, making decisions to benefit local community members in order to support consumer confidence.
6 simple ways to increase consumer confidence in your business
If you’re a business owner, creating a service or product that customers are confident in is crucial for brand reputation, profitability and longevity. Below are a few ways to increase consumer confidence in your own businesses:
- Offer transparency to consumers and employees: Being honest and trustworthy can go a long way as a business owner. This could mean sharing how products are made and keeping customers updated on the status of their requests.
- Be available to your customers: People trust people, not businesses. Make sure you’re the face of your own businesses and that customers feel like they can approach you for their needs.
- Stay consistent with your level of service: Consistency is key when it comes to delivering a product or service. Make sure you maintain an exemplary level of service each time you conduct business. However, sometimes protect your own business. If they do, be ready to address any issues right away.
- Actively seek customer feedback: Customers go where they’re appreciated and their opinions are valued. Even better, implement their ideas and spread the word on how you used their feedback to improve.
- Continue to work on customer relationships: Creating a healthy relationship with your customers could make them more willing to turn to you against the competition. This could also create loyal customers that trust in your ability to provide a personalized service and good experience.
- Have a clear purpose: Make sure you, your employees and customers know what your business is all about. Having a clear answer to your “why” could help individuals see your dedication and passion — ultimately creating more confidence in your business.
Small businesses have long been the backbone of the American economy and it’s clear that the public thinks so too. However, a successful business starts with taking the necessary steps to ensure your consumers have confidence in you. If you’re a small business owner, protect your business with Thimble.