Get more clients · Every business
Where Small Service Businesses Actually Get Their Customers
No national dataset counts where a salon, a dental practice or a plumbing company finds its customers, but the research on how people choose a local business points to two main doors, a search on Google and a word from someone they trust, and a four-week tally shows which one is carrying your business.
At a glance
- In a 2025 survey of 1,000 U.S. adults, 53% said Google was their default tool for finding a local business (counting Safari users, whose browser runs Google Search), and 67% said they often or always check reviews after that search.
- The other door is a recommendation, and it brings in better customers: a study of about 10,000 bank customers in the Journal of Marketing found referred customers were worth at least 16% more than others acquired at the same time.
- The number that matters most is your own, and an illustrative four-week tally shows paid ads costing $150 per new customer while Google and referrals brought in four times as many customers for almost nothing.
The number and where it comes from
Owners often answer the question of where customers come from with a guess shaped by their most recent spending, so the inner voice says Our ads bring in most of our work, even when the phone mostly rings because a neighbor said something kind. Federal surveys track small firms' revenue, credit and hiring but not the path each customer took to the door, so the best public evidence comes from surveys of how consumers search.
The clearest is a 2025 survey of 1,000 U.S. adults by BrightLocal, a local search software company that publishes its panel method, in which 45% named Google as their default tool for local searches, rising to 53% once Safari users were counted, while 15% said Google Maps was their first port of call and 14% said social media.
A search is often the second step, though, because many customers search for a business someone already named to them. An older survey of 2,137 U.S. adults published in JAMA in 2014 found that 38% rated word of mouth from family and friends as very important when choosing a doctor, twice the 19% who said the same of online ratings. The two doors work together, since a friend's recommendation brings the customer to Google and the profile and reviews found there decide whether they call; the Journal of Marketing bank study adds that referred customers had higher margins at first and stayed longer, with the retention gap lasting through almost three years of tracking.
The calculation
The way to find your own split is to ask every new customer "How did you hear about us?" for four weeks, write the answer down in the customer's record and then set each source beside what it cost. Cost per new customer = monthly spend on the source ÷ new customers from that source.
| Source named by the customer | New customers (4 weeks) | Monthly spend | Cost per new customer | Source |
|---|---|---|---|---|
| Google search or Maps | 14 | $0 | $0 | Assumption (counts and spend) |
| Referral from a customer | 10 | $50 (thank-you cards) | $5 | Assumption; Calculated ($50 ÷ 10) |
| Paid ads | 6 | $900 | $150 | Assumption; Calculated ($900 ÷ 6) |
| Lead website | 2 | $240 | $120 | Assumption; Calculated ($240 ÷ 2) |
| Social media | 3 | $0 (about 4 hours of time) | $0 in cash | Assumption |
| Total | 35 | $1,190 | $34 | Calculated ($1,190 ÷ 35) |
In this example, Google and referrals bring in 24 of 35 new customers, or 69%, for $50 a month, while paid ads bring in 6 for $900. Value matters as well as cost; if an average customer is worth $600 over their time with the business (Assumption), the bank study's gap of at least 16% would put a referred customer at about $696 or more (Calculated, $600 × 1.16), though the gap in a salon or a trade will differ.
How you compare
- Your Google door: if most new customers say they found you on Google or Maps, the profile, photos and reviews are doing the selling, and they deserve a weekly check.
- Your referral door: if referrals are a small share of new customers, the people you already serve may not have a reason or an easy way to recommend you.
- Your paid door: an ad channel that costs more per new customer than a first visit brings in has to earn its place through repeat visits.
- Your baseline: four weeks of answers becomes the line to beat next month, and repeating the tally each quarter shows whether a change in spending moved it.
The next step is to add "How did you hear about us?" to every booking, intake form or first call starting this week, then run the cost-per-customer math at the end of the month.
Sources
- BrightLocal. Consumer Search Behavior. 2025. Panel of 1,000 U.S. adults.
- Schmitt, P., Skiera, B. and Van den Bulte, C. Referral Programs and Customer Value. Journal of Marketing 75(1), 2011. About 10,000 bank customers tracked for almost three years.
- Hanauer, D. A., Zheng, K., Singer, D. C., Gebremariam, A. and Davis, M. M. Public Awareness, Perception, and Use of Online Physician Rating Sites. JAMA 311(7), 2014. 2,137 U.S. adults, surveyed in 2012.
Related reading: A One-Hour Weekly Marketing Routine for Small Service Businesses · What a Referred Customer Is Worth Compared With One From an Ad · What Small Businesses Spend on Marketing, and Which Channels Bring Customers Back · 6 Places Your Customers Look Before They Hire Anyone (free live session)
Work with osNOVA on knowing where your customers come from
We help owner-run service businesses set up a simple way to track where every new customer came from, then put time and money behind the doors that are already working, whether the goal is more first visits, more referrals or a smaller ad bill for the same number of new customers.
Email hello@osnovaops.com about your business
Or leave your email and we will reach out
Tell us what kind of business you run and what you want more of.
Not ready to talk? osNOVA runs free live events for owners.