MerchantCircle ‘Signs’ Millionth Local Merchant

Love them or hate them, MerchantCircle is a dramatic success. Today the company announced that it had “signed” it’s millionth merchant. This is how the company describes what that means:

Out of the estimated 15 million local merchants in the U.S. today, more than one million have claimed their listings and have accessed MerchantCircle’s suite of free and premium tools to reach local consumers online.

Early on MerchantCircle used widely criticized “robo calling” (many argued it was deceptive as well) to get merchants to sign up. But that practice reportedly stopped some time ago. The company has raised about $15 million in a couple of funding rounds.

While the number of advertisers is tiny by comparison to the number of merchants who’ve claimed their listings, MerchantCircle is now a certain takeover target. The only questions are:

  • Who buys the company and how soon?
  • How much does it sell for?

The yellow pages industry has relationships with about 3.2 million advertisers. MerchantCircle has a database of a million local merchants (again not advertisers). But this is a huge asset in addition to the local reviews, coupons and other content on the site.

Most of these local businesses are very small and have very small ad budgets, with the majority spending less than $2,500 per year on advertising (and most spending less than $1,000). By contrast most ReachLocal merchants spend at least $1,000 per month on advertising.

While MerchantCircle’s investors and employees would probably like a near-term exit. The company could also build tremendous value over time if it operated as a private company. It could later potentially go public (provided revenues were sufficient).

MerchantCircle would also be an interesting Google acquisition and alternative to Yelp, though the former doesn’t have a sales force or a consumer brand. IAC is also a logical acquirer — perhaps the most likely among the large online players.

26 Responses to “MerchantCircle ‘Signs’ Millionth Local Merchant”

  1. AhmedF Says:

    1. Start robocalling every single business asking them to sign up and claim a business
    2. Let anyone sign up and claim a business
    3. Loudly trumpet X # of ‘merchants signed up’
    4. Facing criticism, claim robocalls have stopped. Continue to robocall
    5. Loop with #1 and #2 until large enough to have the snowball affect come in while everyone else talks about how many merchants you have signed up
    6. Eliminate #1, but keep with #2 so you can continue to trumpet X # of ‘merchants signed up’

    At least FB and other large sites correctly talk about “active users.”

  2. Greg Sterling Says:

    I wonder how many “active users” the site has.

  3. Darren W. Says:

    Haven’t we been through this before🙂 ?

    https://gesterling.wordpress.com/2009/06/16/merchantcircle-quietly-enters-consumer-space/#comments

    “Typically social networks see only a percentage of their members fall into the “super-active” category. In our case, in any given month, we observe between 20-25% of our (now 1MM) local business members actively managing their listing. Interestingly, the merchants who are active are active over very long periods of time. So, for example, and active merchant who joined one year ago is highly likely to continue to be active on the network today.”

  4. Greg Sterling Says:

    Thanks Darren

  5. AhmedF Says:

    My points stand. I myself have about 5 different accounts created with MC.

    You could always disclose any member who has logged in on two separate occasions in the past 6 months, but you will lose your impressive sounding made-up number then.

  6. Julie Johnson Says:

    Hello,
    I’ve been an active member with MerchantCircle now, for almost 5 months. I love this company. I’ve made several connections, with various types of businesses, which would not have happened, without the existence of MerchantCircle. More than 98% of those I’ve connected with, I know on a first name basis. We chat regularly with each other, and purchase products and services from each other, daily. This site allows easy access to converse with merchants, thereby allowing us to maximize our business skills, as well as our MC skills. We work closely together, and care about the succes of each of the businesses on MC. Unlike any other site I’ve used, MerchantCircle has produced instant, measurable, quantitative and qualitative results. Hope to see you here.

  7. Marion Says:

    Merchant Circle has been a great advertising and networking tool for my business. About 95% of new customers contact me through my MC website. It’s a great place to learn about business (tons of info in the forum), exchange ideas and network.

  8. David Mihm Says:

    I’d love to know the IP addresses of “Julie Johnson” and “Marion.” Either the reach of Greg’s blog is absolutely amazing, down to the level of an average small business owner, or they are shills for MC.

    Ahmed, you hit the nail on the head IMHO.

  9. Greg Sterling Says:

    David: I think the only conclusion is that the reach of my blog is truly amazing🙂

  10. Greg Sterling Says:

    It can be revealed now: I am “Marion.”🙂

  11. Julie Johnson Says:

    Hello David and Ahmed,

    This is Julie Johnson. I saw your message, and am not sure what a shill is? Anyway, if you to go to http://www.mechantcircle.com, and then search for Young at Heart Personal Fitness Training, in Wayneville, MO, you can see my listing there. You can also leave a message in my Talk to Me (this is a neat way to communicate with customers or other merchants), or you can email me, from my home page, too. I’m thinking that you might think I am not a real person, with a real business, nor is Marion. I know Marion, from MC, and she is also a real person, with a real business. Go check it out! It really is a fun site, and an asset to my business. Hope to see you there, and have a great day! Thank you.

  12. Julie Johnson Says:

    Oops! I meant to type http://www.merchantcircle.com. Too much typing! LOL! And, Greg, this is a great blog, and thanks for putting it out there! And, we appreciate the words of encouragement about MC. Bye, again!

  13. Greg Sterling Says:

    Thanks. Lucky I didn’t say “I’m Julie Johnson”🙂

  14. Julie Johnson Says:

    Hi Greg! Oh, too funny! That’s true! I’ll let Marion know, and have her come and blog again! Thanks again for this blog! I love it! Have a great day!

  15. Marion Says:

    Hey there:),
    Greg, is your middle name “Marion”?
    Well, like Julie, I am a real person with a real business. My main website is http://www.marion.yourpassionconsultant.com. And yes, MC has been my main source for new customers.
    Marion DiPippo

  16. David Mihm Says:

    Thanks for clearing that up, Julie and Marion. I see that Marion is a moderator at MC, so that would explain why she knows about Greg’s blog🙂

    In the past MC has left shill comments on Mike Blumenthal’s blog when he has written negative stories about them but that seems not to be the case here.

  17. Julie Johnson Says:

    Hi David,

    Yes, we are both moderators on MC, and there are 50 of us. We all get along great! We work together, and assist those new merchants with MC related issues. We learned about this blog from MC, themselves. They were very positive about it! It’s been great chatting with you! Bye.

  18. AhmedF Says:

    Yes the 5 glowing comments definitely mean 1,000,000 actual SMB owners have signed up.

    Oh wait no it doesn’t.

  19. Rodrigo Landerdahl Says:

    MC is an interesting company. With little capital and staff (when compared to others like Yelp and Citysearch) they have managed to build a web site with lots of traffic and users, mainly through smart (but sometimes borderline spammy) SEO/SEM techniques. In addition, they do have an interesting business model and provide valuable services to business owners.

    However, something doesn’t feel right. Maybe it’s the spammy content generated by their own users (they seem to encourage it). Or maybe it’s their lack of focus on the consumer side of the business. Overall, If feels to me as if all their traffic and user base were built at the expense of the brand.

    So, I guess my point is that they should be focusing on building consumer trust and quality content. They have the eye balls and they have the business model. Now they need to focus on the consumer part of their business in order to build a brand.

  20. Greg Sterling Says:

    Rodrigo:

    Perhaps they will turn their attention to that; they have begun to address the consumer side of the business in the last half of last year

  21. Joe Says:

    Interesting blog.

    Since you asked about active members I thought I’d add my name to the list of active and happy merchants on MerchantCircle. I have been a member for 2.5 years at first I was not overly active but then I discovered to Google results my business was getting. I then started learning how to use MerchantCircle and getting customers.

  22. Wayne Odom Says:

    Okay Greg, what I want to know is…. which one of you is the REAL Marion?

    Well, I guess it really doesn’t matter much now that we know at least one of you is indeed real. Oh, and Julie too.

    Guess we better start checking up on that Joe fella, huh? And since I’m making a post, guess that means I’ll be next.

    Oh well, here goes anyway.

    In the short time I’ve been a member of MerchantCircle, I too have seen it produce instant, measurable, quantitative and qualitative results for local merchants in my community.

    Results come from taking action. And action is the required ingredient in order to be considered “active”.

    I have no idea how many members MC has, or how many of them are taking action, or even how many different accounts they have. But, I do know that if a merchant should decide to become a member of MC and take and sustain action utilizing even just one account, he or she will attract new customers to their business.

    As for how long members stay around…heck, I don’t know that either. But with what I’ve experienced so far, I’m pretty sure I’ll be one of those “highly likely” folks Darren W. mentioned in his post.

  23. Greg Sterling Says:

    Ken:

    The 5K is advertisers vs. what they’re claiming here which is “members,” people who’ve claimed or enhanced a listing — free stuff.

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