From the October 2013 issue of Entrepreneur

After 15 years of building companies such as Hotbar.com and SmartShopper.com, Oren Dobronsky checked out of technology and into ... hummus. Namely, Oren's Hummus Shop, his Israeli restaurant in downtown Palo Alto, Calif. As a small-business owner, he found himself driven nuts by negative comments on Yelp and other review sites, especially those posted on days when everything at the restaurant seemed to be going well.

Dobronsky figured there had to be a way for customers to reach out for help before they Yelped. So he teamed up with his MBA friend Adi Bittan to create OwnerListens, an iOS and Android app that establishes a direct line of communication between business owners and their customers. The app, launched in beta in summer 2012 following 10 months of testing at Oren's Hummus Shop, gives customers the chance to send feedback to business owners anonymously via text message or online.

The Stat
A survey of 550 small businesses by the Boston Consulting Group found that owners spent a measly 3 cents of each marketing dollar on digital advertising. According to the researchers, the results "stand in contrast to numerous surveys showing that a sizable percentage of small businesses promote themselves widely online"--except, it seems, when they have to pay for it.

"If you listen to someone and respond in a timely manner, and you eventually also make a change to address their issue, you really can make these customers your biggest advocates," Dobronsky says.

Most of the 2,000 small businesses using the free service are restaurants, but some hair salons and small hotels have also adopted it. Even companies that aren't signed on for the service can receive critiques through the app; in those cases, an OwnerListens staffer scours the web for the company owner's e-mail (tracking it down 80 percent of the time) and passes along the feedback--and more often than not, OwnerListens will land that business as a new client.

By adopting this organic growth strategy--and funded by a $1.1 million seed round secured last May--Dobronsky and Bittan are free to continue developing the app, investigating a freemium business model. They're also adding requested features such as the ability for business owners to send coupon codes and gift cards to loyal customers. After all, when your whole business is based on customer feedback, it pays to listen.