What is one of the most successful, longest-lasting and most cost-effective promotional tools available to small businesses? Surprisingly, it is also the one thing you interact with constantly, every day, and upon which you focus your attention. Answer? Your regular, loyal customers.

Of course, you depend on them to purchase your goods and services, but your customers often serve a much broader and longer-lasting purpose when they tell their friends and neighbors about your business and their experiences with it.

Word-of-mouth advertising is a gradual process built customer by customer and situation by situation. The more you satisfy your customers' expectations, the more likely they are to return. But even more important, they will often tell their friends about your business; or even better, bring them along on their next visit. I think one of the most satisfying things a business owner can experience is to have a customer bring an out-of-town friend in and say, "This is the place I keep telling you about. I just wanted to make sure you got to see it before you left town." You cannot purchase this quality of promotion.

One of the fundamental differences between locally owned, independently operated businesses and large national retailers is what each depends upon to bring their customers into the store. Typically, the national retailers use a formula of splashy advertising, big in-store signs promoting targeted discounts, coupons and special purchases to create impulse buys and increase sales. In contrast, the local business often can't negotiate or afford the one-time promotional purchases or cheap advertising rates, so it must depend on the goodwill and loyalty of its customers.

This interdependence between customer and business owner is what makes a community strong and healthy. Coupons and sales do not promote loyalty; they are only as good as their perceived value. If someone offers something better, customers will go there without a second thought, but if you have earned customers' loyalty, they will evaluate the perceived difference and often still come to you first. If not for that item, they will return the next chance they get.

There is one important aspect to word-of-mouth advertising that does need to be emphasized. If people are impressed with your service, they will often tell a friend. But if they are treated inappropriately or feel cheated, they will tell 10 people. You will not have an opportunity to present your perspective and will have probably lost several customers.

Another aspect of word-of-mouth advertising concerns the effectiveness of neighboring businesses telling their customers where a good place to shop or buy a particular product is. Make sure you let your friends in business know what types of merchandise you carry, especially if it may not be something they would expect you to stock.

The Corvallis Independent Business Alliance is completing work on this year's annual directory of independent member business for the Corvallis shopping area. This is a persuasive marketing tool that demonstrates the depth and breadth of offerings from local merchants. By listing the various products available from independent stores and contractors, it is a powerful illustration of the commitment individual people have made to their community.

If you would like to be included in this year's edition, please contact us at www.corvallisIBA.org by the end of October. The listing is free for all CIBA members.