Category Archives: Sales Channels

Facebook Focuses Hard(er) on Small Business

Facebook is felt by some to have the potential to dominate SMB online advertising because of its incredibly high organic usage. But the challenge to drive even more SMB advertisers remains. The company currently reports that it has 40 million SMBs with Facebook pages around the world. Two million SMBs are paid advertisers, or five percent of its SMB page holders.

Today, Facebook unveiled several new small business support programs that it hopes will boost its SMB conversion rates. These include a series of local SMB events, the launch of self serve tools and chat and email support.

We got a hint of what was to come during the March 25 keynote by Facebook Director of Small Business Jon Czaja at BIA/Kelsey National in Dallas. During his keynote, Czaja emphasized that Facebook can lift sales results for SMBs by a high percentage if it is added to traditional media ad campaigns.

He also asserted that Facebook does well on its own. He noted that Facebook’s accuracy for narrowly targeted online campaigns is 89 percent, or more than twice as high as the industry’s 38 percent average. Advertising on Facebook provides $8 back for every dollar invested, and a 12x boost in conversion, Czaja suggested.

While Facebook heavily emphasizes self serve for SMBs because they demand it, it is also eager to partner with agencies and others, adds Czaja. “Facebook can’t build everything itself. If there are other partners out there to build on our platform and encourage better performance, then advertisers will be able to choose to go to Facebook or an agency. It’s an ‘All-of-the-Above’ strategy.”

ReachLocal Now Captures SMB Leads from Across the Web

Leads are coming from everywhere, and the digital marketing firms have adjusted to this reality. ReachLocal, for one, has now opened up its ReachEdge lead conversion and marketing automation software. It now has the capability to track leads and other activity from a wide variety of unassociated marketing sources.

Chief Product Officer Kris Barton briefed BIA/Kelsey on the ReachEdge’s evolution, noting that the company’s efforts to increase transparency and simplicity will ultimately boost conversion rates. Barton says that “decoupling” the software is the direct result of customer input. Some customers, for instance, had invested in redesigned website and didn’t want to have to abandon it in order to sign up with Reach.

The new version of ReachEdge is $149 a month and includes a free trial. It also features plug-ins for publishing systems such as WordPress and Drupal. The software has also been enhanced for mobile. Customers can use their phones to receive emails and text alerts. It also has integrated reports that are “focused entirely on ROI” and are much clearer than Google Analytics, says Barton.

A Look at Amazon’s Entry Into Home Services

Amazon Home Services has been in beta since November and has now formally launched. The service will take on Angie’s List, Home Advisor and a slew of new players in the increasingly crowded home services space (i.e. Pro,com, Serviz, Home Depot’s Red Beacon, Thumbtack and apparently, Google.)

VP Pete Faricy told The New York Times that it now covers more than 700 types of services and has already entertained 2.4 million “serve offers.” A look at Amazon’s map identifies four highly developed core markets (Seattle, San Francisco, New York and Los Angeles) and 36 moderately developed markets (and many more lightly-developed markets.)

All of Amazon’s “hand picked” pros that hope to work with Amazon must undergo background checks, which will cost $50 (plus $40 per employee); have appropriate licenses, and carry insurance. All listings will also feature Yelp reviews as well. Pros will pay Amazon 20 percent for services that cost $1000 or less, and 15 percent above that amount, as well as monthly subscription fees — although those fees are waived through June 2015. The 20 percent fees are comprised of 15 percent service platform fees, and 5 percent transaction fees. The fees and requirements are fairly standard in the industry.

What Amazon brings to the table is its brand and especially, a high volume of consumers. It is currently targeting its customers with an offer of a $20 gift card for first time users. It also has millions of merchant and consumer credit cards in its profiles, which can be a major advantage. Longer term, it has the potential to leverage its Local Offers business, which has been including service offers for some time. Amazon doesn’t, however, have an instant collection of merchants that are pre-inclined to work with it for marketing purposes.

It also doesn’t have the behavioral intelligence that informs its retail services,or its own reviews – although Yelp’s reviews will help it out here. There are always thoughts that Amazon would want to try to buy a service such as Angie’s List or Home Advisor to complement its efforts in these areas.

On the surface, it seems like a stretch for Amazon to enter home services. It could, of course, be an initial failure, like Amazon’s Fire Phone. (or a long term success, like Kindle and Amazon Web Services). But if you are thinking big…services are a key part of the local economy that Amazon is tackling for sales, leads, payments, hosting and other areas.

We note that many of the competitors in the space leverage the new models of Uber-like, Local On Demand Economy that BIA/Kelsey is focusing on at our June 12 NOW event. There is certainly plenty of potential. As Home Depot Silicon Valley head Anthony Roddio noted at our ILM 2014 event in December, “The market is ripe but no one is there yet.” Some estimates have penetration in this segment at under 10 percent.

At BIA/Kelsey NATIONAL: Top Takeaways

The third version of BIA/Kelsey NATIONAL just wrapped last week in Dallas, following our 2014 NATIONAL event in Atlanta and our 2013 event in Boston. Taking twists and turns as it develops, the topic of “national marketing, local targeting” is one that increasingly relies on digital, which represents a significant share of the $67.1 billion in spending that is forecast for national local by 2019.

Thanks very much to our 64 speakers, hundreds of attendees, sponsors and GoLocal Award finalists for participating with us in Dallas. What are you takeaways from Bia/Kelsey NATIONAL, Ver. 3? Here’s my personal top takeaways:

1. The time is now for National Local, but the industry still needs to catch up. BizHive’s Dave Walker, in a great keynote, cited CMO Council research noting that 57 of CMOs say that local programs are important, but only seven percent of CMOs have a successful program in place.

2. It is critical to leverage social media. The average Facebook user is on 41 minutes day, and national brands have an opportunity to use Facebook, Twitter, Pinterest, Yelp and other social media to develop real scale for local franchises. As U-Haul’s Elnora Cunningham noted, U Haul can give its dealer network direct feedback from over five million reviews. Given all this, SpeakEasy CEO Mike Orren tweets: “So no, Mr. Client, we don’t recommend abandoning the platform.”

3. ‘Closing the Loop’ on attributed marketing should be highly prioritized. As Geary’s Karen Kovaleski noted, marketers need to think across media and organizational boundaries to bring customers to a transaction decision. Google, for one, is actively working on this capability. Google’s Brendon Kraham highlighted a PetSmart case study in which 10-18 percent of search clicks can be tracked back to instore visits.

4. The rise of programmatic sales represents a breakthrough for National Local. Automated selling represents a break-through that local needs to reach users on a targeted, hyperlocal basis. But it needs to be carefully handled. As Sightly’s John McIntyre noted during Rick Ducey’s Programmatic SuperForum: “In the end, programmatic is stupid. It is a (simply) a go-get, go-fetch tool.”

5. All National Local strategies must focus on optimizing Mobile’s micro moments. Just as broadcasters have focused on day parts for different types of marketing, national local marketers must really begin thinking about the different types of activities that people are doing when they look at their mobile phone. Google says that people are looking at Android phones 150 x a day.

6. Platforms can bring local franchisees in line, and also liberate them. As Christian Ward from Yext notes, brands are “schizophrenic” from top to bottom, with the national brand representing one thing, and each local outlet representing something else. Getting “local stars to act like choir boys” is one goal of the platform companies.

7. Going deep on vertical expertise is essential. It isn’t one size fits all in national local. Richards Group’s Rod Ulrich noted that “consultative sales rule,” and that his agency has added a library of vertical materials and a librarian to assist in the effort.

8. The sales structure for National Local must be carefully tailored. The old days of sending someone to Detroit or New York twice a year doesn’t make sense anymore. The Dallas Morning News, for instance, told us that its team of 10 national reps is now down to 2. But national touchpoints remains even more vital, via timely contacts, use of networks and other capabilities.

9. A real role remains for local media and directories. Local newspapers and Yellow Pages still play a real role in targeting locally – and regionally. But it is important to understand and tailor those strengths. The national usage of The Dallas News, for instance, is more than half driven by Dallas Cowboys.

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Booker Software Raises $35 Million; CEO Josh McCarter Talks to BIA/Kelsey

Booker Software announced today that it has raised $35 Million, which it will use to invest in sales and marketing capabilities and in developing vertical-specific products that “drive more value to merchants,” said CEO Josh McCarter, in a discussion with BIA/Kelsey.

McCarter noted that 9,000 locations are under contract and over 60,000 business users. These are users who are “logging in every day. They are not just signing on once a month” to create a promotion or similar feature. They use Booker’s services as an integral part of their business.

Next steps for the company will further leverage all the trends impacting services-based SMB marketing, including CRM; retention marketing; Point of Sales services; scheduling; and mobile apps via a partnership with Como.

“Last year, we refocused on things that help you grow and operate more efficiently,” said McCarter, noting that the company rebranded from Gramercy One to specifically focus on the SMB space, which now accounts for 80 percent of its revenue. “The data that Booker can aggregate really powers the growth engine,” he said. Services such as email and CRM are only as powerful as the data they can use.

While spas and salons continue to account for a significant portion of the company’s business (dating to its origins as SpaFinder), a number of verticals hold great promise, said McCarter. Pet services, daycare and after-school services (music lessons, art lessons) are doing “very well.” Another area of growth is a JV with The Golf Channel that enables customers to book tee times and other services.

The new round of funding is on top of $40 million previously raised. Several mid-sized funders that specialize in SMB services were included in the round, including Signal Peak (InfusionSoft) and Jump Capital (Swift Pages). The round was led by Medina Capital, a cloud infrastructure specialist.

Other investors included Revolution (Steve Case and Ted Leonsis), Bain Capital, TDF Ventures and Grotech Ventures. In addition, a “strategic investment” was made by First Data, the payment processing giant, who will be announcing details of its relationship with Booker in coming months.

McCarter noted that each investor brings a unique appreciation of Booker’s goals in serving the SMB community, which has been “underserved” by larger VCs, which McCarter called “SMB-averse.” But there is a definite need for SMB services, which focus less on return policies or other ecommerce issues. They are more about everything that a business needs, from scheduling services to POS innovation to equipment rentals. It is a $2.4 trillion space, he argued.

Booker Software CEO Josh McCarter

BIA/Kelsey SFO: Home Depot,Thumbtack, Serviz Weigh in on Home Improvement

Home improvement services is a wild new frontier that has just scratched the tip of its potential, according to segment leaders at BIA/Kelsey’s Leading in Local: Interactive Local Media event at San Francisco Airport.

“ServiceMagic/Home Advisor is (only) a couple of hundred million dollars. Angie’s has never made a profit. The market is ripe but no one is there yet,” said Home Depot Silicon Valley leader Anthony Roddio, who also serves as GM of the company’s Red Beacon contractor scheduling service. “The pot of gold at the end of the rainbow is repeat business.”

Roddio noted that a real opportunity for the industry is that many millennials have moved away from DIY. “For some, their idea of a home project is upstreaming iTunes in the living room,” he said. But Home Depot is traditionally geared around DIY. The company hasn’t done enough to develop ‘Do it For Me’, said Roddio.

Serviz leader Zorik Gordon, the former ReachLocal leader, said that the void in the industry is that the segment is not transparent. Serviz will move away from unreasonable 300-500 percent upsells, and provide price charts, and reviews; it will also assign contractors, said Gordon, who says the startup will move beyond southern California, where it launched in July, and will reach 10-20 cities by the end of 2015.

Thumbtack CEO Marco Zappacosta noted that his company recently raised $100 million from Google and others. “What Google and others saw in us is that we have created a unique platform,” he said. “We have 600 unique categories.”

Thumbtack is taking a different approach than Serviz and The Home Depot’s Red Beacon in that it doesn’t assign jobs to service pros or collect money for jobs. Focusing on moving the money is “not the indicator” for the success of a transactional marketplace, he said.

Uber Tests 10 Minute Delivery Service

The big online retailers such as Amazon, eBay, Groupon and WalMart have been focusing on developing same day delivery channels. Same day delivery is an effort that that may not only boost their edge over other retailers, but also add new anchor channels such as groceries, and also boost impulse sales.

We’ve also seen other players experiment with delivery. The San Diego Union Tribune, for instance, has tested delivery of coffee beans with the morning newspaper. Newspapers have been also a channel for free CPG samples with Sunday newspapers for years.

Now along comes Uber, in the midst of an ocean of bad publicity. It is testing a 10 minute delivery program called Uber Essentials, which is an evolution of an earlier Uber delivery test. The program allows under- utilized drivers to drop off key items from Flu medicine to toothpaste to birth control. The items are roughly the same price as local stores. As with Uber car service, items(and tips) are automatically charged to Uber accounts. One possible hangup: Customers must meet their Uber driver on the street. They also cannot deliver alcohol.

The program is being launched with a free order up to $20, has a tie-in with a free sample of Dunkin Donuts packaged coffee – illustrating a potential advertising opportunity.