MerchantCircle has now become a major player in the world of small business and online marketing. The firm said yesterday that “it has surpassed 500,000 members, with more than 5,000 paying customers.” Paid growth, according to MerchantCircle, has come within six months. (StepUp had roughly 5K paying customers when it was acquired by Intuit for $60 million.) The firm has partnerships with IAC/Citysearch and WebVisible that help sell or fulfill on the paid side.
Members here are defined as SMBs that have registered and taken some sort of action on the site (added or changed information, etc.). According to the company roughly 25% of this group falls into a category of being “highly engaged,” using site tools and functionality to promote their businesses (blogs, newsletters, coupons, linking to other SMBs).
The company also claims that in the aggregate its pages are doing as well or better than destination site competitors. Here are two impressive stats that MerchantCircle cites:
- 2% of all merchants in 26 states are registered members
- 1% of all merchants in all 50 states are registered
The company has done surveys of members and published these two data points in its press release (with the inflammatory headline “MerchantCircle Gains Traction at the Expense of the Yellow Pages”):
- 43% of local merchants call the yellow pages a “less than effective” channel for acquiring customers
- Among merchants who have a positive view of the yellow pages, more than 75% rated internet advertising as “effective” or “very effective” at acquiring customers.
I know nothing about the sample size or survey methodology so I’m unable to affirm or critique these findings, but the SMB embrace of the Internet is very clear.
MerchantCircle has repeatedly drawn fire for past telemarketing and merchant acquisition practices, which I gather have softened and changed as the company has grown. Regardless, these numbers now put the company in the “big leagues” in terms of the small business market.
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Update: I was just told by MerchantCircle that the survey referred to above had 1,394 responses.
June 19, 2008 at 3:28 pm
Runners up will be selected according to the accuracy of their predictions. Internet Marketing
June 19, 2008 at 5:55 pm
[...] http://gesterling.wordpress.com/2008/06/19/merchantcircle-now-claims-500k-members/ [...]
June 19, 2008 at 9:12 pm
[...] members, with more than 5,000 paying customers.??? Paid growth, according to MerchantCircle, has chttp://gesterling.wordpress.com/2008/06/19/merchantcircle-now-claims-500k-members/MerchantCircle Gains Traction at the Expense of Yellow Pages PR Newswire via Yahoo! Finance [...]
June 19, 2008 at 9:42 pm
Ultimately, their fraudulent business practices will catch up with them. They have repeatedly violated the DNC law- calling small business owners at their home number (sometimes a result of the business listing information from Localeze, Acxiom mistakenly including home information for an SMB) and used deceptive messages to lure SMB’s to their site. The Better Business Bureau gives them an unsatisfactory rating and chalks up over 80 complaints. Whatever value the business may represent comes accompanied with significant risk exposure, either from a class-action suit or steps taken by state AG’s.
June 19, 2008 at 9:52 pm
Do you have a link to that BBB rating?
June 19, 2008 at 10:00 pm
I’m hearing additional complaints against MC from Matt McGee:
http://www.smallbusinesssem.com/strange-goings-on-with-merchant-circle/236/
June 19, 2008 at 10:24 pm
I have to agree with Matt, Peter, and a few others - considering how they continue to get their #s (and how ‘lately’ they have always ‘toned down their marketing efforts’), it is about time the published #s be ignored.
June 19, 2008 at 10:49 pm
Greg, the BBB link is:
http://sanjose.bbb.org/WWWRoot/Report.aspx?site=68&bbb=1216&firm=228893
I’ve had 4-5 dozen comments from angry business owners in the last month on that post, which tells me their marketing hasn’t softened or changed. The comments say they’re now using Google’s name to get people to visit MC, among other tactics.
I’m with Ahmed. It’s time to stop reporting their membership claims. There’s a bigger story that should be reported.
June 19, 2008 at 11:57 pm
MerchantCircle cares deeply about all local merchants and we take merchant concerns very seriously. If you read the BBB report, it states that we have resolved the majority of concerns and are working to resolve the remainder.
We are dedicated to helping local businesses succeed by providing a free web presence, with free online marketing tools, so they can attract new customers. I invite you to take a look at what merchants are saying across America about the value MerchantCircle provides here: http://www.visualcv.com/merchantcircle.
Sincerely,
Kevin
MerchantCircle
June 20, 2008 at 12:07 am
Here is the Better Business Bureau information:
http://sanjose.bbb.org/WWWRoot/Report.aspx?site=68&bbb=1216&firm=228893
Based on BBB files, [MerchantCircle] has an unsatisfactory record
unsatisfactory record - A company has an “unsatisfactory business performance record” with the BBB is based on the experiences reflected in BBB files. This file condition results when the company has failed to resolve or respond to complaints, repeatedly failed to respond or resolve issues in a timely manner, failed to resolve the underlying issues for a pattern
In September of 2006, this company has been calling businesses across the country with an automated message. Business owners complain that they receive an automated phone message from this company. They claim that the message tells them that their company has a negative review and must visit the company’s web site to see these negative reviews. Upon visiting the web site, business owners have experienced difficulty viewing these negative reviews.
According to complainants, automated phone calls from the company have continued to occur as of March 2007, but the use of the word “negative” has been removed from the automated message.
….
The BBB processed a total of 89 complaints about this company in the last 36 months, our standard reporting period. Of the total of 89 complaints closed in 36 months, 68 were closed in the last year.
June 20, 2008 at 1:33 pm
News Alert about them from the BBB when the Hunstville BBB office got one of those calls just a couple of months ago:
http://northalabama.bbb.org/WWWRoot/SitePage.aspx?site=56&id=c8490f02-ac55-46a5-876a-d1602da7c60f&art=4920
June 20, 2008 at 1:51 pm
Oh, and by the way, the John Battelle blog post mentioned in Matt’s post has a bunch of comments from disgruntled comments as soon as a couple of days ago:
http://battellemedia.com/archives/002632.php
July 25, 2008 at 11:35 pm
They are at it again…I just got spammed this week with a recorded message to my cell phone.
BEWARE of Merchant Circle!!
August 29, 2008 at 6:21 pm
I have read many blogs and researched MC extensively and I have experienced just about every complaint that everyone has shared. I actually helped promote MC over two years ago within my community and took advantage of the ad dollars they would pay out if I were to invite merchants and write endorsements. I must add that I really thought in 2006 that MC was doing a great service but now I’m sorry I encouraged my business social network to join. There are many more details concerning my specific MC drama but I have an idea that hopefully may catch on and settle the issues that we have all experienced without lawyers getting paid.
Why don’t we all use the business social network mechanism of the MC portal and in a civil manner use it against them to notify visitors that MC….. Get the idea?