Category Archives: Sales Channels

ReachLocal Moves Away From Consumer-Facing ‘ClubLocal’

ReachLocal announced today that it is moving away from its new ClubLocal business, which connects consumers with service providers. The publicly-owned company said that it is now considering a deal that would allow ClubLocal to be taken over by a “major” local entity along with a group that includes ex CEO Zorik Gordon and CSO Michael Kline. At the same time, ReachLocal would maintain a large investment in the business.

It is not a done deal. The company said it will “go shop,” or look at all options for the ClubLocal business until December 24.

ReachLocal’s move last Spring to develop “ClubLocal,” a consumer facing business to assign home repair jobs to vetted local services, met with some head-shaking within the industry. Reach has been seen primarily as a B2B service that did not appear to have the core competency or brand to work with consumers.

The service, however, went ahead and launched in Dallas and San Francisco, perhaps spending between $12 million and $15 million on the initial development and rollout. The main idea was that if Reach could provide SMBs with leads and actually process transactions for them, it would make for a much longer lasting relationship than simply relying on advertising solutions.

One of our BIA/Kelsey users of ClubLocal in Dallas reports that it provides excellent service. But there haven’t been extensive reports on its early business results. Soon after the launch, however, there may have been internal dissension about the company’s strategic direction.

CEO Zorik Gordon left the company, along with President Nathan Hanks. CSO Michel Kline had also announced plans to leave, although at the end of 2013. No explanations have been provided for any of the departures. Hanks is not part of the new group that will run ClubLocal if the proposed deal goes through.

In a discussion with BIA/Kelsey today, interim CEO David Carlick and CFO Ross Lansbaum wouldn’t comment on the executive departures, but noted that there is a search going on for a fulltime CEO; that Reach has become more of an enterprise business; and that B2C services such as ClubLocal are “not really our sweetspot.”

Carlick also noted that ReachLocal is going full speed ahead with its new ReachEdge product, a marketing automation and website project for SMBs. In fact, the company is accelerating deployment in Canada.

“Edge is the back part of ReachLocal – getting people to look at the local merchant Website and other offerings, and converting those visits into customer engagments,” said Carlick. “We have found the things that our clients tend to be worst at – like turning merchants into customers. We achieve results that are 200-300 percent better than what most merchants do now.”

More Exec Changes at ReachLocal Amidst Advertiser Growth

We’re watching ReachLocal closely, and note some changes at the company. Reach has been pushing the envelope as it transitions from a company that is largely dependent on reselling search and display to one that has a deeper relationship with SMBs via a wide range of platform services – and a direct relationship with consumers as well via service leads, placement and transactions.

Today, during its 3rd quarter earnings call, Reach announced the departure of President (and SMB Digital Marketing Keynoter) Nathan Hanks. Hanks follows founder Zorik Gordon out the door and will be replaced by CRO Josh Claman, who joined the company in August 2012 from Dell and NCR. Interim CEO (and DoubleClick Cofounder) David Carlick remains in place.

The announcement was made during the company’s Third Quarter earnings, which emphasized that the company has expanded its advertiser base 11 percent from a year ago, to 24,600. It also grew its advertiser campaigns 11 percent , and now has 34,600 active campaigns.

Additionally, international operations in 16 countries have become increasingly important to the company’s revenue mix, with 34 percent of its revenue now coming from international, up from 29 percent in 2012.

SMB Digital Marketing: ReachLocal Moves Beyond ‘ISO’ Towards Commerce

“Software is going to dominate local marketing.” In fact, “in a few years, everybody is going to be in a Software as a Service business,” sys ReachLocal President Nate Hanks, who told SMB Digital Marketing attendees last week in Austin that he totally agreed with an earlier statement by YellowBot CEO Matt Booth.

It isn’t about directories, anymore, Hanks notes. Its more about local commerce, along the lines of Uber, DemandForce, Hubspot, InfusionSoft and OpenTable “As amazing as directories are, they are only useful for their informational utility. You have got to make that leap into local commerce.”

The result will be a better, more integrated environment for merchants that will help them win more customers.,” Hanks says. “AI is the new UI”. The key is that everything must be totally automated. It must be “invisible and life affirming,” he says.

Hanks, in fact, goes so far as to suggest that ReachLocal’s evolution has made it more of a commerce company than a simple sales organization. The term “Independent Sales Organization” doesn’t really fit ReachLocal anymore, he suggests.

Rethinking Coupon Engagement: DataSphere Launches LocalSaver

Can coupons be reimagined to spur more consumer engagement? That’s what DataSphere is working on. The Seattle-based company sells and hosts marketing solutions to more than 20,000 SMBs under local TV and newspaper brands owned by Gannett, Belo, Raycom, Meredith and other players.

Part of its effort has been enabling and distributing free coupons for its SMB clients. As part of this effort, it has developed a network that can send coupons out to national website and mobile players such as Coupons.com, GeoQpons and CouponSuzy. It also drives traffic via organic and paid search, Facebook, Twitter, affiliate programs and mobile campaigns.

DataSphere’s latest coupon-centric effort is LocalSaver.com, a destination site that showcases coupons based on category and popularity. It also uses the coupons to anchor a rich media experience for the SMBs. Every SMB coupon on the site links to a page that includes a video, pictures and information about the business.

“Consumers who look at a coupon are more likely to play a video and consumers who play a video are more likely to look at a coupon,” says SVP Gary Cowan. ”Eventually the aggregate of all these touchpoints hopefully results in a transaction.”

Cowan notes that LocalSaver is fully integrated into the company’s coupon network, which makes it easy for SMBs to frequently add or modify as many coupons as they like (for instance, they can set their coupons on auto-renew, or set a predefined date range during which they will be valid.) The compay also provides best in class coupons for particular business categories. Over time, there will be opportunities for advertisers to gain additional exposure across the network through premium service tiers.

Cowan is a featured speaker during our Sales Force Transformation session at Leading in Local: SMB Digital Marketing, which takes place Sept 11-13 in Austin. You may register here.

SevaCall: Qualified Service Leads in 90 Seconds

Fast, efficient service leads has been a goal of numerous companies since the commercialization of the Internet. Richard Rosen and his team at FastCall411 pioneered the space seven or eight years ago, although their service was initially limited to hiring car service. The first car service to respond to queries would win the job.

Several new entrants have jumped into the space. ReachLocal has launched ClubLocal, a service that automatically sends out service pros to customers that send in a query. The pros, who provide discounted service, are sent out based on price quotes, reviews and other criteria.

Another new entrant is SevaCall (i.e. save a call), a five person startup based in Potomac MD that sends out leads to service providers, who can then automatically respond to customers – hopefully, within a 90 second window. The service allows up to three service providers to call consumers, who can do their own price and service comparison, set a service window, and hire who they want.

President and COO Manpreet Singh says the service, which raised $1.3 Million in first round funding, is filtering its leads to find the ideal service providers. It eventually will use call management software to filer leads based on pricing, job types done, ratings and reviews, and even inflection points.

Some service pros are being sent leads for free as an introduction to the service, but Singh tells us that the average lead cost is now $13. It is offering services in more than 50 categories, including taxicabs, florists and accountants. More than 6,000 zipcodes are currently being served, including zips in Atlanta, Boston and Kansas City.

ReachLocal Focuses on Verticals: A Look at its Eyefinity Deal

ReachLocal is now largely focused on providing integrated marketing solutions, including search, retargeting, promotions and process management. As part of this effort, it has also introduced three new brands: ReachCommerce, a process management service; RealLocal Edge, a lead conversion service; and ClubLocal, which allows consumers to book and buy home services online.

It is also drilling down on key verticals, such as auto and health care. The company, which works with 32,500 advertiser locations, recently announced a big deal via is ReachLocal Health Care division to sell the integrated solutions for clients of Eyefinity, which provides business services for eye doctors. Eyefinity will receive compensation for referrals to its franchisees.

ReachLocal HealthCare director Golda Hartman, who is a physician herself, runs a team of 130 sales specialists. She says the division has seen 70 percent year-over-year growth. It makes total sense for digital marketers such as ReachLocal to seek deals with optometrists and other media specialties, she says.

“They do everything in their practices, from business solutions to keeping electronic media records,” she says. The key is to be able to customize not only by vertical, but by type of business and location.

“We look at every individual practice,” notes Hartman. A private practice, for instance, may want to focus on new business or patients that require specialties, she says. Hospitals might focus on other strengths.

ReachLocal CEO Zorik Gordon is keynoting our upcoming Leading in Local: SMB Digital Marketing event in Austin Sept 11-13, along with leaders of Google, Facebook, Twitter, YP, YPG, Gannett and many others. You may register here.

LevelUp’s Sales Deal with Heartland Payment: A Discussion with Heartland’s Sarah Owen

As traditional local media players begin to lose some of their prominence, the search for alternative local sales channels has become increasingly important. The channel currently being explored: payment processors, which normally focus on selling Point of Sales systems.

Processors start out with a technological advantage; the “big data” from consumer purchases can help produce offers, rewards and other incentives. In addition to their large reach, processors already handle related issues that put them top of mind with SMBs as trusted business partners, such as payment processing, as well as credit/debit card management.

The first significant sales deal with a processor channel started with a pilot program last October between LevelUp, the Boston-based transaction marketing/loyalty company, and Heartland Payment Systems, which works with 250,000 merchants and is the fifth largest payment processing company.

LevelUp had built up a local sales force of about 25 people in eight markets. The local sales efforts had been moderately successful for such a new business concept, resulting in 6,500 business relationships. But the pilot with Heartland caused the company to shift its approach. After the pilot, LevelUp decided to focus more on its product offering and reach, and less on building its own branded services and local sales forces.

Heartland’s own perspective is that there are rich opportunities in working with companies such as LevelUp, and extending beyond payment processing sales. In a conversation with BIA/Kelsey, Sarah Owen, Heartland’s Executive Director of Mobile & Retail Payment Strategy (and former First Data executive) notes that it makes total sense for processors to begin selling consumer-centric solutions.

The relationship with LevelUp is a “perfect marriage,” says Owen. It would almost be unnatural not to pursue broader solutions, she says. “We ask ourselves: What types of solutions and brands do we need to support that consumers need to use? It is not just about payments. It is about launching and driving consumer behavior.”

Owen notes that the company has 800 of its own feet-on-the-street sales reps. “We are already talking to merchants about payments,” she says. “We act as a consultant to merchants in their acceptance of payment strategies. We help merchants understand what they need to do with a POS” to drive customer adoption and lower costs.

This post is an edited excerpt from a newly published BIA/Kelsey client Briefing: “Payment Processors as Local Sales Channels: A Look at the Heartland/LevelUp Relationship.”