Over half of small business owners say generating new customers is a challenge, yet nearly two-thirds do not use outside support for marketing assistance, according to a survey of US small businesses from the Yellow Pages Association (YPA).

The recently released "Small Business Marketing Poll," was conducted by research firm Issues and Answers and undertaken to better understand the marketing preferences of small business owners, MarketingCharts reports.

It found that the smallest of businesses — those with one to five employees — are most likely (70%) not to consult with anyone when making advertising/marketing selections. On the other hand, half (51%) of businesses with six to 10 employees and only one-third (34%) of those with over 11 employees do not consult with outside sources.

Additional study highlights are below.

Finding New Customers is Hardest

• Generating new customers is the toughest marketing challenge among small business owners, with more than half (53%) of respondents mentioning this.

• Other areas frequently perceived among the toughest challenges include limited advertising budgets (17%) and the lack of knowledge when it comes to where to advertise (10%).
• Retaining current customers is the toughest challenge for seven percent of small business owners.
• Respondents whose headquarters are located in suburban and urban areas are much more likely to face challenges in generating new customers than their rural counterparts. This could be expected, YPA said, as typically urban and suburban firms operate in a highly competitive environment.
• Urban businesses appear to understand marketing (and problems associated with it) better than suburban and rural companies, as illustrated by a notably lower number of those who cannot name their toughest challenge.

Most Use ROI to Measure Success

• The largest percentage (44%) of small business owners measures the success of their marketing programs by tracking return on investment (ROI).

• ROI is used as a measure of success mostly by larger businesses (with at least six employees) and younger respondents (under age 55).
• The number of qualified leads and telephone inquiries (29% and 21%, respectively are also frequently used for measurement success.
• A large number of small business owners (26%) do not use any type of measurement for their programs.
• Those who completed the survey online are significantly more likely than those interviewed by phone to use ROI as a success measure.

Most Businesses Know Why Customers Purchase

• Some 40% of small business owners say customers purchase their goods and services because they are life's necessities, while 30% indicate it is because they offer luxurious goods and services.
• 20% say their businesses cater to life events such as getting married, moving, or having a baby.
• A surprising 10% of small business owners are not sure why customers buy their products, the survey said.

The Kelsey Group recently reported that a soft housing market drove otherwise-reticent small and mid-sized businesses online to promote their wares. Despite this trend, the vast majority of small businesses are intimidated by search marketing, and a full 90% have never even tried it, according to Microsoft Advertising.

About the study: The results are based on a telephone and online survey of 400 small business owners conducted by Issues and Answers. Some 200 interviews were conducted over the phone and 200 were conducted online. The sample of participating companies was drawn from Dun and Bradstreet's business list of companies. Each company was screened to include only those that have between one and 50 employees (full- and part-time).