Small business marketing: managing word of mouth in small service businesses. Longitudinal case studies of independent hotels and health and fitness clubs

Word of mouth is generally agreed to be the foremost source of new business acquisition for small businesses and owners/managers often cite 'word of mouth' referrals as the main source of business generation (Carson, 1985; Curran and Blackburn, 1994; Stokes 2000). However, little is known about how small business owners know their firms gain word of mouth or, indeed, of the dynamics that influence the incidence of word of mouth. The objective of this study is to investigate the role of word of mouth in the operation of small firms in the service sector. The thesis draws upon extant theory and original empirical evidence. Specifically, the thesis seeks to examine how recommendation can be proactively managed, which is now a central element of contemporary marketing literature (Stokes 2002). The research has incorporated three sources of data for the purpose of triangulation of different perspectives, including interviews with owners/managers at key stages of the research, customer surveys and documentary evidence from the businesses. A Longitudinal case study approach is employed to achieve the research aims. This allows an exploration of the role and management of word of mouth within small firms and provides a theoretically informed insight into the triggers of referrals and recommendations. This approach is believed to have the potential of "systematically gathering enough information about a particular person, social setting, event or group to permit the researcher to effectively understand how it operates or functions" (Berg, 1998:212). The primary units of analysis are the owners/managers in the Leisure and Tourism sector, who have proactively managed word of mouth. However, the study also includes the customers' perspectives regarding their recommending and complaining tendencies. The study has produced an original investigation about the significance of word of mouth in service sector enterprises, which includes a conceptual model of the stimulants of recommendation in small businesses.