Wanna Push Back re Local SEM Churn?

I’ve received a couple of calls and emails this morning regarding the Borrell report on Local SEM churn and piece I wrote over at Search Engine Land. If you want to respond or argue with any of the points I made or in the report, please feel free.

I’ll publish anything submitted to me verbatim (provided it’s not a profanity laced tirade). Alternatively you can just comment on any of the posts.

18 Responses to “Wanna Push Back re Local SEM Churn?”

  1. davidmihm Says:

    Hey Greg,

    Not arguing at all by any means, but I did add my two cents here

  2. davidsabel Says:

    Hi Greg –

    It all comes down to ROI. Obviously if SMBs think local SEM works, they’ll keep spending. The trick is in proving an ROI when:

    – their own sites are poorly designed to generate and capture leads, drive calls
    – calls are often not tracked back to SEM spending, so can’t be optimized
    – physical visits are not easily tracked back to SEM or to re-seller site visits – people can’t recall accurately, don’t remember or aren’t asked

    From the conversations I’ve had with SMBs, the money is definitely there, and they are looking for trusted partners who can help them navigate the entire local search / online landscape:

    – getting listed at all the local search sites
    – qualifying the traffic
    – presenting current offers / incentives
    – enabling the introductions
    – monitoring their reputation
    – tracking and optimizing

    Generally, they understand that consumers click on organic listings from other local search sites, so they know that no single SEM reseller can help them capture/manage 100% of the potential traffic their business could get. They need to be everywhere.

    Perhaps you can’t fix the retention problem in the current reseller model. Maybe what’s needed is a new “meta” player to emerge that goes beyond the limitations of any one reseller’s network, SEO prowess and SEM arbitrage skill; one that offers a transparently priced menu of services and a highly granular means of tracking ROI.

    If I’m an SMB and want to maximize my time and money, I’m going to want to make sure the solution being provided is as comprehensive as possible.

  3. Greg Sterling Says:

    David #2: I agree that many SMBs probably blame these programs when bad sites are partly to blame for failure to convert. We may need to literally wait for a new generation of biz owners to emerge for them to get this more fully.

  4. James Blum Says:

    I used to be in this space and took a modest size exit by selling my company and from my experience I think there is another side to it – the attitude of many small business owners. They don’t like to listen/learn and in general they don’t have trusted relationship with anyone..Many of these small businesses are small after years only because of their business practices..you can do everything right for them and still they will be pissed at you..check with many small web developers etc.. I believe in the newspaper and Yellow Page industry they paid money because there was no other option..So someone needs to consider this angle before sizing this market..many businesses literally say No to a business that comes to their door

  5. Greg Sterling Says:

    James:

    Yes, this is a factor I agree. I’ve heard this anecdotally from a number of people.

  6. predictabuy Says:

    Selling a business an SEM package when they have a terrible website seems like a recipe for an unhappy customer. They’d probably benefit more from spending that money on a well designed web-site and a simple local SEO program. So, yeah, it seems like a more holistic approach is needed.

  7. Greg Sterling Says:

    A long time ago somebody at a major SEM firm said the “key to local search is controlling the landing pages.”

    • davidsabel Says:

      That’s as true now as ever, and especially critical if the user is poised to make a decision. But, often, more than a landing page is needed to pull someone through the funnel.

      Generally these “adversites” have a Call to Action focus on driving form submits and calls. That’s great if the searcher is ready to commit to that business, but not so great if they are still in the “evaluation of options” phase of the buying funnel. Add to that the fact that most of these “adversites” don’t have unique user generated content, or much in the way of educational / reference content, and you could see why users who are still further up in the funnel would be unlikely to convert on that first SEM-driven visit.

  8. Greg Sterling Says:

    Agree. When it comes down to it, the best marketing is running a good business and providing good service. WOM on sites like Citysearch, Yelp and elsewhere (offline) will drive more business than all the SEM campaigns and optimized landing pages ever could.

    • Max Kalehoff Says:

      Hi Greg,

      Thanks for your interest in the Borrell report. You offered some good builds, and have some good discussion going here. However, I want to push back on your last comment. Sure, a great business and service will drive word of mouth, often to very significant levels, and drive new business and customer loyalty. However, organic reputation and paid/performance acquisition is not an either/or proposition — they are beneficial both standalone and integrated. The fundamental principle is that advertising investment (or any marketing goal, really) needs to be planned according to predetermined goals, with accurate tracking and analysis of Return On Ad Spend, or profitability. That’s how sophisticated advertisers determine where and how much to spend, and we believe it’s possible to instill those fundamentals through simple delivery and communication of ROI for local businesses….in tandem with running a great business with high word of mouth.

    • Max Kalehoff Says:

      Hi Greg,

      Thanks for your interest in the Borrell report. You offered some good builds, and have some good discussion going here. However, I want to push back on your last comment. Sure, a great business and service will drive word of mouth, often to very significant levels, and drive new business and customer loyalty. However, organic reputation and paid/performance acquisition is not an either/or proposition — they are beneficial both standalone and integrated. The fundamental principle is that advertising investment (or any marketing goal, really) needs to be planned according to predetermined goals, with accurate tracking and analysis of Return On Ad Spend, or profitability. That’s how sophisticated advertisers determine where and how much to spend, and we believe it’s possible to instill those fundamentals through simple delivery and communication of ROI for local businesses….in tandem with running a great business with high word of mouth.

      Max Kalehoff
      VP Marketing, Clickable

  9. Greg Sterling Says:

    Max: My comment was an oversimplification. Yes, organic and paid complement. But often I hear people at conferences focusing on tricks: We use facebook to drive twitter followers to drive mobile . . . That’s cool but gimmicky. At the bottom is good service, etc. These tools all build off that.

    A local Pizza place in Berkeley, Zacharys, wouldn’t ever need to advertise and still be packed. It’s been around for 20+ years. Company lifestage is another relevant factor in marketing as well: customer acquisition vs. retention.

  10. Joe Mescher Says:

    Expectations, expectations.

    A lot of the local search game comes down to overzealous reps selling small business owners on the idea that they can capture huge amounts of leads and new business with excruciatingly small budgets.

    SEM salespeople – the feet on the street – need to set reasonable expectations of what can reasonably be delivered, and also tell the business owners what they need to contribute as well.

    Make a business owner know he has skin in the game by running a decent looking website with relevant landing page (upsell?) and that he or she is duty bound to review the reporting regularly.

    In other words, don’t just sell a local business an SEM package, become their partner. Demand they make adjustments and dedicate a small amount of time to reviewing results.

    Easier said than done, but it is possible.

  11. davidmihm Says:

    Joe, this is a great comment:

    “In other words, don’t just sell a local business an SEM package, become their partner.”

    and is in line with some of the things Miriam Ellis & Clark Mackey said on my blog. I think the mindset of “upsell” is too aggressive for a lot of SMBs, though.

    What I see in working with a lot of clients, or talking to prospective clients, is that they are willing to spend money if it brings them something in return. So companies of ALL sizes should make an effort to streamline a VERY simple, VERY low-cost campaign starting out, demonstrate value to the customer. When it comes to paid search, if that means a landing page on your OWN website that you’re in control of (with a higher conversion rate), so be it. If it works, the SMB will say ‘this is working great–how do I spend more,’ at which point they can be “upsold.”

    The problem is that this partner mentality is a) too much work and b) too much of a “long sell” for most commissioned salespeople. There IS still a market here for companies like Yodle and ReachLocal to get into, because a lot of agency/consultant-types like myself aren’t willing to take on those riskier clients. A more scalable enterprise *should* be able to figure out the economics of that kind of arrangement, though.

  12. Greg Sterling Says:

    To Joe and David: True partnership may be reserved for small agencies like yours David. Scaling and partnership don’t necessarily mix.

  13. davidmihm Says:

    Greg, interesting that you say Zachary’s doesn’t need to advertise (which is true), but they HAVE claimed their LBC listing (something that 80% of the 10-pack for “pizza berkeley” has failed to do)…so they are engaging in a baseline level of web promotion…

  14. davidmihm Says:

    “Scaling and partnership don’t necessarily mix.”

    Greg, I don’t think this has to be the case. A couple of my clients have had VERY good relationships with their Print YP reps over the years…it’s a different medium and the relationships existed in a much less-competitive marketplace, but I think it’s a matter of getting customer service reps educated to a point where they can help the SMB with the right strategy…

  15. Greg Sterling Says:

    David:

    There’s probably a middle ground. And it depends on how one defines partnership or the extent of service offered.

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