Small Businesses Convert Leads to Customers
ADOTAS EXCLUSIVE — With news of skyrocketing gas prices and the dismal state of the economy leading the news, it’s more important than ever for small business owners to promote and grow their business. Local businesses can grow their businesses faster by bridging new online channels with traditional offline ways of acquiring new customers.
One of the biggest issues barring businesses from shifting their ad dollars online is the difficulty of measuring the results of interactive advertising campaigns. SearchEngine Watch found that 70% of small businesses don’t have Web sites or advertise online. But these days, a local business can’t afford to rely solely on the phone book or word-of-mouth.
Why walking fingers aren’t working
While most small businesses have traditionally relied on the Yellow Pages, many are now saying “Why?” Now most people look for service providers online and the Yellow Page dominance just hasn’t translated online yet. This is causing Internet Yellow Page (IYP) players to face some tough issues as they try to compete with Google and Yahoo.
One of these issues has to do with pricing models. The monthly or annual listing fee model that Yellow Page players employ offline, has limited scale in the world of online advertising. This has led IYP players to add cost-per-click (CPC) pricing for online listings. The problem is that CPC pricing is not nearly as universally accepted among local businesses as it is for the online businesses that dominate the Google and Yahoo search marketplaces.
The allergic reaction that local businesses have toward CPC pricing stems from the fact that most local businesses are not online. What do you do with a click when you don’t have a Web site to bring people to? Perhaps more problematic is the fact that the 40% of local businesses that do have a Web page often lack the skills, time or resources needed to effectively convert clicks into offline business. This makes advertising in CPC marketplaces costly and very risky for local businesses.
That leads directly to another big issue that IYP players face and that has to do with competing against Google for advertising distribution on other Web sites. This issue stems from the fact that Yellow Page companies have not yet been able to convert the majority of their advertisers to online performance-based pricing due to reasons I went into above.
These two issues create a real catch-22 for the Yellow Pages industry. And small businesses are left adrift looking for new methods of finding prospects.
New options with old technology
A Web presence is important for businesses, but a small business can actually participate in online marketing without a Web site or the expertise to navigate online search marketing. Instead, the low-tech telephone is used to notify a business of an online lead coming in and then also allow the business to deliver a tailored message to a prospective customer. The phone is a comfortable tool every small business uses every day, all day.
Several companies have emerged to help bridge local business to online searchers. Large enterprises have the resources to deal with clicks and impressions and can supplement existing Google or Yahoo programs with other online lead generation. Small businesses on the other hand should look at how to balance cost with a pay-per-lead model that can provide measurable results at a lower opportunity cost.
Here are the Top Ten questions I think a small business should ask when evaluating online lead generation solutions:
1. Does it require me to have and maintain a Web site, special landing page or know about Search Engine Marketing (SEM) or Search Engine Optimization (SEO)?
2. Is the consumer actively looking for my products and services?
3. Are they specific to my category and geography?
4. Have they confirmed their interest?
5. Can I use the phone or e-mail to convert these leads into customers?
6. How many other businesses am I competing against for this customer?
7. Is the consumer information kept private? (This one may seem odd, but it actually results in higher submission rates and the consumer providing more detailed information.)
8. If I’m not contacting the person directly, do I get several opportunities to reach out to them?
9. Am I only paying for actual contacts? How can I control the pricing and budget?
10. Where are the customers coming from?
Getting calls with leads? Consumer-initiated lead generation? This is utilizing familiar technology (the phone) that provides a small business the opportunity to compete online like the big guys.
Several of the players in the local search arena — ReachLocal, Weblistics (now Spot Runner), Done Right and Matchpoint will be participating on a panel at the inaugural LeadsCon conference early April in Las Vegas. Might be the best place to compare and contrast the various solutions emerging to help local businesses reach out to new customers.
Reader Comments.
Great article Peter, you hit it right on the mark. I would like to reprint in a local chamber newsletter next week. Would you like me know it that would be ok.
Art
Peter – You have a typo in your bio at the top of the page “chief technology and poduct officer for LookSmart, Ltd” but interesting article.
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