Tag Archives: Yodle

Web.com Buys Yodle; Moves Deeper into Value Added SMB Services

A chapter in local commerce ended today with Web.com’s agreement to purchase Yodle for $320 million. The deal is expected to close by the end of 1Q.

The companies will complement each other well, with Web.com’s huge 3.45 million SMB base being driven up the value chain from domain registration (via its Network Solutions division) and websites and presence management to Yodle’s higher priced and more complex services, including SEO, leads, office based automation and CRM.

Yodle currently has 58,000 subscribers and an average revenue per user of $300 per month — a figure driven higher by the 9,000 franchise locations it serves for 200 customers. Its integration will have a large impact on Web.com averages, moving Web’s average customer earnings from $167 to $226 per month. It also will provide Web.com with a large, 700 person local sales team.

The sale price, of course, has got to be a major disappointment for Yodle backers. It was less than two years ago that Yodle had been talked about as a $1 Billion + company on the brink of a planned IPO. Its positioning at that time suggested it had finally broken down the wall in local between acquisition and relationship marketing as Yodle invested in CRM, cloud-based software and leads.

But Yodle never pulled the trigger on the IPO amidst a tough market for tech IPOs, There was speculation that the company simply could not withstand the exposure of publishing its churn and customer acquisition rates, which like the rest of the industry, would presumably be very high. And then there was the damning Wall Street Journal article on April 16, 2014 on poor customer service and poor values that focused on Yodle and Reach Local; and an apparent slowdown on efforts to sell enterprise level CRM and cloud based services to top franchise companies, or “brand networks.”

Right now, the battle to sell marketing services to SMBs includes a shrinking number of players. High acquisition costs and churn rates continue to plague the industry. But the potential rewards are rich for a group that not only includes Web.com but also ReachLocal, Endurance/Constant Contact, Vistaprint, Main Street Hub, SignPost, Deluxe Corp., Hibu, YP and in some verticals, DemandForce, which was just sold to Internet Brands.

A Look at Yodle’s $75 Million IPO Filing

Yodle — part of the class of 2005-2007 SEM-focused Independent Sales Organizations that took on traditional local sales organizations — filed this week for an IPO that could raise $75 Million.

The filing provides insights into Yodle’s evolution, and the evolution of the local online sales space overall, which has moved towards cloud-based automation. As Yodle notes, it not only provides its customers with an online presence, but mobile and social presences as well.

“Businesses need a comprehensive digital presence that includes a professional quality website that is easily discoverable and optimized for mobile devices, exposure on leading online directories and ratings and reviews sites, and tools to communicate with customers via email, text messages and social media” notes Yodle in the filing.

The company’s customer base currently consists of 44,800 local businesses, making it one of the largest sales groups. These customers helped it achieve revenues of $161.9 million in 2013, with the average customer of its flagship product paying under $300 a month – or less than half what they’d have to spend if they purchased similar functionality a la carte, says the company.

Many of Yodle’s customers belong to one of several vertical categories. For instance, the company reports that it has account relationships with 6,400 dentists (out of 166,500); 4,500 plumbing, heating and air conditioning contractors(out of 226,500); 3,400 lawyers (out of 165,000 ) and 1,200 landscapers (out of 459,600).

Yodle has also focused increasingly on servings “brand networks” — national franchisors, manufacturers and multi-location businesses that are targeting locally. As the space evolves, the competitive picture has evolved as well. Yodle’s filing notes that rivals for local business marketing budgets now include a wide range of players, including traditional Yellow Pages, direct mail campaign providers and advertising and listings services on local newspapers, magazines, television and radio.

Other competitors include online search engines, online business directories, providers of digital presence offerings (i.e. GoDaddy, Main Street Hub, Web.com); providers of digital marketing solutions, such as SEM companies; and productivity and office management tools, such as Constant Contact, Demandforce, MailChimp and Solutionreach.

Yodle Buys Lighthouse, Boosting Relationship Marketing Efforts

When they first launched in 2005, the independent sales channels were almost entirely about reselling search and YP ads. SMBs showed confusion over the value of these campaigns however, and it didn’t help that Google (and its lower margins) dominated the mix.

Since then, the independents haves gone in somewhat different directions, as more players such as Local Edge have come in (and at least one major player, WebVisible, has dropped out.)

The independents continue to keep the core reselling models, adding display to the mix. But they have also worked to reduce churn and earn monthly fees by engaging their users via such channels as social media, landing pages and deals.

ReachLocal announced a major new effort last week, adding a marketplaces and services leads component (ReachCommerce and ClubLocal). Moving into the world of Home Advisor (ServiceMagic), consumers can now use Reach to hire and pay for recommended service companies.

Today, Yodle announced an equally large move with the acquisition of Lighthouse, a highly developed Customer Relationship Management solution that puts Yodle in a DemandForce type setting. Lighthouse has several thousand customers, which will be added to Yodle’s base of 30,000 customers. Lighthouse CEO Brian Smith now becomes Yodle’s VP of Product and Marketing for Lighthouse 360.

Like Intuit’s DemandForce, Lighthouse has been especially active with Dentists, and is building its vertical outreach from there throughout 2013. This acquisition expands Yodle’s Software-as-a-Service (SaaS) platform offering, which now accounts for nearly half of the company’s revenue.

In a press release, Yodle CEO Court Cunningham noted that marketers have traditionally “siloed acquisition and relationship marketing; Yodle is now breaking down that wall as a result of acquiring Lighthouse and will be the first in the industry to optimize SMB lead generation based on actual transactions.”

Yodle CEO Court Cunningham and Home Advisor CEO Chris Terrill are among the featured speakers at Leading in Local March 18-20 in Boston.

SMB Digital 2012: Yodle’s Cunningham Takes on ‘The Experts’

Yodle CEO Court Cunningham, in a well received presentation at SMB Digital Marketing this week in Chicago, told attendees to constantly adapt to actual conditions in the marketplace, not what the “experts” tell us.

The gist of Cunnigham’s comments were that experts are too often conflicted by their limited access to data and doing what is convenient. Long term, adaptation happens along the lines of Charles Darwin: and of course, only the strongest survive. What really needs to be analyzed are what impacts the “three pillars of local success: sales, service, and marketing ROI,” he said.

Experts for instance, would have you believe that you can’t link content back to your website without taking a hit from the search engines; that map optimization is a simple one time affair; mobile optimization only has an impact for restaurants; and single search terms are about as good as plural search terms.

But Yodle’s 50 data analysts – studying three million weekly search queries and other data linked to its 30,000 customer base – have found that content can be linked back without any real hit.

They also found that map optimization is a highly tuned issue caused by constant changes in the map alogorithms; mobile optimization has a major impact on a wide swath of sites; and plural search terms are much better than single search terms.

Mobile paid search, in particular, is critical for all businesses, drives great economics and should be treated as a unique outlet, said Cunningham.

The Move to Loyalty Platforms: Yodle Founder Launches Punchey

In a reflection of the industry’s ongoing interest in developing SMB promotional and loyalty services, Yodle founder Nate Stevens’ venture fund announced last week that it is putting $1.7 Million into Punchey, a new mobile-oriented payments and promotions platform.

The 12 person, Boston-based firm was founded in late 2011 and is focused on SMB “upstream marketing initiatives,” notes Stevens. Features include promotions, customer communications, digital receipts and analytics. About a dozen SMBs have been testing the service in different markets, with new clients signing up daily.

The company’s ambition is to replace cash registers and stand alone dial terminals. Vertically integrated POS solutions will be dealt with through integration/partnership. Today, businesses working with Punchey can accept cards via a mobile phone, iPod, any PC using an independent mobile card reader or a countertop card reader that is compatible with in-store computers. While the whole loyalty and rewards space is converging in many ways, the emphasis on alternative POS suggests that it will seek to directly compete against players such as Square.

Stevens sees a natural progression between Punchey and his work at Yodle, which has focused on getting businesses online and developing their Web presence. While there is “a perennial need to upgrade and improve SMB websites….what we learned is that there is also an opportunity on the processing and loyalty/retention side of the house,” he says. “Everything can be tied together, pre-sale, point of sale, post-sale through an intelligent and integrated payment processing engine,” adds Stevens.

Retention is another big focus for the company. “A critical learning at Yodle was that client retention is important, both as a marketing services provider and as an SMB,” says Stevens. “It allows you to reduce advertising costs and increase overall lifetime value and profitability.”

Defining the customer base is also key. “If (SMBs) can’t define their customer base, how can they even begin to communicate and market to them after they walk out the door?” says Stevens. Data from the processing side combined with loyalty programs gives Punchey that capability, he adds

Yodle CEO Co-Authors ‘Local Online Advertising for Dummies’

I like the “For Dummies” series a lot — more than 1,700 different Dummies books have been published since 1991. But it never occurred to me that there could be a volume geared towards Local Online Advertising. It occurred to Yodle CEO Court Cunningham, who has now co-authored “Local Online Advertising for Dummies” with business consultant Stephanie Brown.

The book is a good reference for our industry. It is easy to understand, full of practical tips, and leaves no stone unturned. Every time I’d say “I bet they forgot that,” the next page would prove me wrong. I like also that the book is a straightforward guide, and plays no favorites.

I imagine Yodle will pass out a zillion of these to its small business clients. It isn’t a bad idea for any of us to give to people who would like a practical guide to our industry. It isn’t, however, designed to be a book for industry insiders. Here’s the Amazon link.

The Berry Co. Picks Yodle for Websites, SEO/SEM

The Berry Company, the SMB sales giant with 260,000 SMB clients, has partnered with Yodle for Web site creation and search engine marketing and optimization. The deal gives Yodle access to Berry’s 42 state reach and 885 print publications. Yodle, which is in something of a horse race with SMB resellers such as ReachLocal, WebVisible, Marchex and others, currently has a presence in 25 markets.

Berry, which calls itself “your local leads expert,” was sold to Local Insight Media last year. It is also an authorized reseller for AT&Ti’s Yellowpages.com, so it is essentially going to be splitting its sales products. SMBs will be offered online listings and video advertising from YellowPages.com, and websites and SEO/SEM with Yodle. Berry is also an authorized reseller for Google AdWords.

Yodle CEO Court Cunningham says the deal with Berry, Ma Bell’s legacy sales company, has been “a long time in the making.” Tests began in May last year, and the arrangement is now live in some markets, with “methodical, region-by-region” rollouts likely to be completed by the end of summer. He also notes that Berry now becomes its largest partner, but that Yodle is private labeling solutions with “four or five” other companies as well.