Customer Acquisition among Small and Informal Businesses in Urban India: Comparing Face-to-face and Mediated Channels

Abstract

This study further explores the use of information and communication technologies (ICTs) in small and informal businesses in the developing world by focusing on the role of ICTs in customer acquisition and retention. Data is drawn from a survey of 317 sole proprietors and operators of small businesses with five or fewer employees in and around urban Hyderabad in Southern India. Respondents describe how various customers were acquired—via walk-in, referral, family connections, landline telephone, mobile phone, internet/email, etc. Results suggest that face-to-face interactions dominate customer interactions, even among those with access to ICTs. Four tests explore whether telephony enables more specialized, hands-off, numerous or distant relationships with customers; a significant relationship between landline ownership and total number of customers is found.