The DexYP Merger: Focusing on Strengths, Building Scale and Overcoming the Stigma

Dex’s acquisition of YP will give the combined entity a national scale that starts with 5,000 sales reps and roughly 700,000 SMB customers. It also gets an important opportunity to lower costs by combining operations; rebrand in a meaningful way; build and acquire tools to help SMBs land new customers and engage existing ones; and build a network for other SMB marketing vendors and tools providers.

For the new DexYP, the big question is whether there is enough of a kernel left of “gee, Yellow Pages used to be great and easy to use” to overcome the stigma of being anchored by the obsolete print product. It needs to get SMB customers to come back to a new, improved model that not only promises leads, but all kinds of marketing and administrative assistance that will create efficiencies, work more closely with customers and produce higher yield.

Simplicity can’t be overrated here. Witness Staples’ brilliant “Easy” campaign. But under the hood, the reality is that SMB marketing has become highly complex, with seven-to-10 products and channels used for marketing to- and working with customers.

Dex, under former Yellow Book head Joe Walsh, will take the lead here and won’t rest on its laurels. Since Walsh’s arrival at Dex late last year, the company has focused on its Thryv business automation platform, which includes websites, reputation management, scheduling, SEO and CRM. Thryv was recently introduced as a new brand, replacing DexHub.

But Thryv competes on a playing field with many similar SMB platforms. Similar options are offered by players such as Yelp, Go Daddy, Web.com, ReachLocal and others — not to mention Google and Facebook. Can it offer cheaper services? And should it? The acceptance of premium pricing for a Yellow Pages solution is a real question mark for making the DexYP economics work.

YP, for its part, has been less overt about its transition to marketing services – choosing to focus on its continued relevancy for five or six core verticals that focus on high end, considered purchases (auto, home services etc.) But it has also sought to providing a wheelhouse of tools for SMBs, with a special focus on integrating direct mail and IYP ads, and promoting e-commerce sales. DM and e-commerce, if carried over, would constitute new additions to Dex’s platform.

At recent industry events, CEO Jared Rowe, has given a preview of what the next generation of Dex and YP might look like. To him, it is all about offering “a depth of content and connections.” He emphasized that its combined solutions have dramatically lowered cost per lead – 12% in the last year alone.

YP CEO Jared Rowe and Dex EVP Gordon Henry are lined up to speak about the merger and current SMB trends and challenges at The B2SMB Summit in Chicago October 4.

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