Local Business Survival in Age of Marketplaces

June 26th, 2014 By Ted Paff

There is a new threat on the horizon for local businesses: online marketplaces for local services.

Hamster wheel

Online Marketplace for Local Services

These new marketplaces are similar to the online marketplaces that have closed thousands of Main Street retailers over the last decade but selling local services.  Think Amazon selling moving services or Houzz selling general contractor services or Angie’s List selling plumbing services.  These are marketplaces where consumers can now shop for local services.

Today, these sites are mostly set up as “deals” businesses.  This was the industry that Groupon made popular with consumers.  However, coming soon, these companies (and several others) will be offering price comparison and the ability to book services directly creating an online marketplace for local services.

Future Threat

So why are these companies a threat for local businesses?  The situation is clearly different than retailers where online price shopping has revolutionized the distribution channel for most products.  While hiring a plumber is different than buying a toaster, new customer acquisition is a substantial part of the value equation of any business.

Here is an example.  Lets say you are a offering a local service (e.g. plumber, auto repair, lawyer, doctor, etc.).  You know that on average it will cost you $100 to provide the service (cost of labor, materials, etc.) and, on average, you will bill $200 for that service resulting in $100 of profit.  Now the interesting part:

  1. If a company offers to sell you access to that new customer (e.g. a “listing fee”, a transaction fee or a membership fee, etc.), how much are you willing to pay?  Said another way, how much are you willing to cut into your profit percentage to get more profit dollars?
  2. Imagine that all of your competitors are also on this network and imagine that the online marketplace starts to increase fees.  Do you have some aggressive competitors in your local market that are willing to pay more than you are to get that new customer?
  3. Now imagine that the majority of all of your new customers are coming through this channel that will likely have a very low, or even negative, profit margin.

In this scenario, a local business owner’s choices are stark: either give up much of the profit of each new customer or give up getting most of your new customers.  But is this really a threat or just one more item on a long list of problems that might “one day” happen?

Today, it is a non-issue.  However, when Amazon, Yelp, and several others all push services in a direction that could have a substantial negative impact on your profit margin, its time to pay attention.

How to Win in This Game

This may or may not be the way that local services are sold/bought in the future.  However, if this trend starts to take off, here are somethings you can do about it:

  1. Stay in the game.  As marketplaces begin to gain traction, make sure you are listed and generate transactions in each of the major marketplaces.  Pay careful attention to your cost to capture a new customer in each of the marketplaces.  For most local businesses, it will be worth being aggressive in paying for new business if you are…
  2. Get VERY good at getting repeat customers.  To me, this is the main take-away of these marketplaces: they are a great way for local businesses to generate new customer flow but you could easily go bankrupt if you are not good at capturing the contact information of your customers and marketing to them to generate repeat business from those customers.  Because much of the profit will be taken out of the first transaction with a new customer in the form of lead capture costs paid to the marketplace, the profitability of your business will mainly come from repeat customers with a much lower marketing cost per revenue dollar.

As early Groupon customers learned the hard way, if you do not create a strong system to market to past customers, you are destined to be stuck on the hamster wheel of low-margin new customer generation.

Comment »

Google My Business?

June 19th, 2014 By Kevin Baca



Last week, Google rolled out its new small business product called Google My Business, which provides a single platform for updating information on Google Search, Maps and Google+.

Informational Webinar

If you were already using Google Places for Business or the Google+ Pages Dashboard, you will have to now acquaint yourself with Google My Business right away because they have all been consolidated into the My Business platform. In fact, you can attend a Hangout webinar hosted by Google to learn more about the launch: Thursday June 19, 11:00 PST

What it does

While I described Google My Business as a “platform” above, in fact, it is much more than that. Mike Blumenthal refers to it as a brand, a platform, and a portal with enhanced analytics and an interface that connects to other Google products, including AdWords.

Features include:

  • Manage all Google web properties from a single mobile app
  • Monitor 3-part reviews Google crawls
  • Comment on Google+ Reviews
  • Track Customer Insights and Analytics
  • Manage multiple locations from one dashboard
  • Integrated with customer engagement features with Google+ and Google Hangouts

What it means

Greg Sterling goes so far as to call the product suite a rudimentary CRM. And, when you look at the messaging put out by Google, it’s easy to see why. The product is being billed as a platform to “Connect with Customers” as much as being found.

At the moment, “engagement” is limited to social media, hangouts, and customer reviews. So, it is really more of a public-facing marketing tool, than customer relations management platform. To be sure, all of this is being given away for free, but the hope is that small businesses will use the platform to purchase ads.

Whatever the case, Google My Business in this current iteration is, at the very least, a vast upgrade that should make it much easier for local businesses and marketers to manage Google web properties from a single platform.


Comment »

The Online Grapevine: Building Your Reputation in the Age of Millennials, Mobile, and Social Media

June 12th, 2014 By Kelsey Brown

So they say we are officially in the age of the “shareconomy“. Some analysts pin this phenomenon exclusively to Millennials like myself, stating a generational attitude adjustment of ours created a new sharing-is-caring approach to goods and services.

It’s not hard to see why analysts would blame/thank (a feeling as subjective as “Millenial”‘s connotation) the 20 and 30-somethings for popularizing the shareconomy. With a number of recent college graduates finding themselves back at square one, private possessions and pads becoming harder and harder to acquire, and substantial employment proving more difficult to land than in decades past, the idea of using only what you need and only when you need it, without much commitment, is an especially attractive one to this age group.

This model isn’t entirely new, though. Yes, paragons of the recent sharing surge like Lyft, Airbnb, Kickstarter, and even a driveway-sharing app called SpotOn Parking are very new installations, but the core concept of people with something and people without something establishing relationships is not so novel.

A much more significant element of “new” to note here actually lies beyond specific companies and movements of the last few years.


Instead of saying that people never exchanged services for pay, never invested their money in things they wanted to see make it, etc., we can say that the power to seek out service exchanges never fell so squarely in the people’s hands.

Word of service experiences never traveled so quickly or mattered so much, either.

My point is this: “You scratch my back and I’ll scratch yours” has long been a part of the economy. It’s the same elementary supply and demand curve that runs the whole thing. However, out of increased necessity and taken-for-granted Web connectivity (be sure to read past that tricky title), an individual’s or company’s ability to fill in gaps with their advantageous offerings – especially as seamlessly as those born into the Internet’s critical mass age expect – is in the spotlight more than ever before.

So, as a larger company or a one-person operation nowadays, it is more critical that you keep your reputation online rather than off, and that you keep your customers buzzing about their experiences with you. Don’t neglect using booming social media to your business’s advantage. Don’t let months pass without updating your website with fresh customer reviews showing you’re active and making customers happy every day.

After all, customers are always going to choose the best service – no matter if they’re from Generation X, Y, Z, or Q – and they’re always going to need to make purchases. What you need to assess is how you’re riding the wave, and we’re here to help.

Comment »

It’s Not Rocket Science, It’s Just Work

June 5th, 2014 By Ted Paff

The CEO of another software company reached out to me this past week and, in describing what he does (and to some extent, what we do), he noted, “it’s not rocket science.”

rocket science

He is right, of course – it’s not rocket science.  It’s *just* work.  But I think what he was trying to imply (things that aren’t rocket science aren’t hard or special) is dead wrong.

Quick Test

Here is a quick test:  Can you name 3 things that are totally unique to your business?  3 things that no other company offers?  Not 3 things in combination but 3 items, each of which is totally unique to your company?  I doubt it.

That is REALLY hard to do for just about any bushiness.  But that does not diminish the uniqueness or value of your business.  Instead it points to the fact that what makes your business unique and competitive is not the sum of its (non)differentiated parts.

What makes enables a business or an individual to win day after day in highly a competitive market is a commitment to do your absolute best for those you serve every day.

Reputation Marketing Starts Here

Reputation marketing starts with the idea that you have a reputation worth marketing.    It starts with a commitment to provide a great service/product.

Do you have a reputation worth marketing?  Let us help!

It’s not rocket science.  But it is a lot of work.

Comment »

Moving? Don’t Forget to Tell Google.

May 29th, 2014 By Kevin Baca


Google needs your help. You see, they have been preoccupied with building robot cars and fixing the typography in their logo. So, you’ll have to excuse them for not keeping up with your business’s data cluster.

Oh, you didn’t know you had a data cluster? Well, you do, and Google uses this data to determine how prominently your business listing ranks online. Without getting too granular, here’s what you need to know: Your company name, address, and phone number need to be listed accurately and consistently everywhere online.

If you have moved locations recently or changed your company name, that could be a problem. Your NAP data doesn’t magically change by itself so your data cluster, that thing Google uses to rank you ahead of your competitors, could be compromised.

The solution is simple: Change your NAP data on directories, data providers, and any other websites that cite your business online. Okay, so simple, but also really, really challenging.

When it comes to changing NAP data, there’s no silver-bullet. Not yet, anyway. Much of the work has to be done manually, because you’re not just creating listings, you’re claiming and editing them.

Here are some pointers for the do-it-yourselfers out there:

1. The Locus

Your Google Local listing is the locus of your data cluster, so make sure your address information is exactly the way you want it because you’ll be matching every other listing to the NAP on your Google Local listing. Warning: Do not opt to keyword-stuff your company name.

Upon editing the company name on your Google Local listing, Google will ask you to verify the changes by phone or postcard. Note: Your changes will not go live until you have verified them. For the best information on how to edit and optimize your Google Local listing, see Mike Blumenthal’s excellent blog.

2. Data Providers

The NAP data on your Google Local listing has to match citations across the web, and there are loads of them, so it may seem hard to know where to start.

But, the thing is, many of the directories that list your business information get that NAP data from large data providers. The biggest of which are Infogroup, Localeze, Acxiom, and FACTUAL.

So, it is important to go directly to the data providers, before you start editing any of the dozens of directories.

3. Audit

The daunting task at this point is figuring out which websites to edit. Well, one way to do this is to simply Google your old address information. Pretty much all of the search results that appear will need to be edited.

Aside from Google research, you may want to rely on a third-party service or tool. Moz Local, for example, touts an NAP audit tool which will help you find variations on your business name.

4. Reviews

When it comes to editing citations across the web, sites that host your customer reviews are of special importance. That is because your reviews data confer trust signals to Google. In fact, reviews could be seen as their own ranking category.

To this end, you may want to edit the NAP data on your CityGrid listing. CityGrid is the largest content network on the web, and reviews on the CityGrid network can appear in dozens of participating directories online.

The good news is that CityGrid pulls NAP data from InfoGroup, which you took care of in step 2. However, the Data providers can take some time before the feed into your other listings.

5. Facebook

You’ve edited your Google Local listing, the big data providers, directories you’ve audited, and reviews sites, so what’s next? In my opinion Facebook should be high on the priority list.

Aside from the potential ranking benefit of social signals, Facebook is an incredibly valuable branded web destination, and with a little optimization, your business’s Facebook page will likely outrank most of the small directories anyway.

Once you have taken these steps, it may still take Google a while to complete the whole picture of your data cluster, so get started as quickly as possible.




Comment »

“57 Channels (And Nothin’ On)”: Bruce Springsteen Sings Critical Consumer Psychology

May 22nd, 2014 By Kelsey Brown

Even if you’re not familiar with Springsteen’s 1992 hit, I’ll wager you can relate to the fascinating phenomenon of the “paradox of choice”, so-named in psychologist Barry Schwartz’s 2004 book and TED Talk (a riveting watch when you have the time and “57 Channels” has faded out).

Heck, I’ll even bet you my car/plumbing/flooring/water heater/private jet (if I had one…we can’t all live like rock stars) that you have personally experienced becoming more and more stressed as you’re flooded with options.


To be fair, the song is from 1992, and the book and TED Talk are from 2004. It may be many years later right now, but all these insights into the paradox of choice have aged like a fine wine. How so? Well, we still have difficulty choosing which wine of about 200 at the store will make us the happiest.

As Schwartz summarizes best, the human mind often experiences a kind of paralysis when we are given tons of options. I’d argue that while options are dandy, actual and final decisions are terrifying – or at least can be, especially without comforting validation of the final choice. As our options increase exponentially, so does our fear of making the wrong choice.

This is where we really see the mind-blowing power of reviews.

Say you’re shopping at a clothing store recommended by some friends (choice validation #1). You finally choose a cool new shirt after trying on more than you thought humanly possible. The dressing room attendant says he/she also has that shirt (validation #2).  You throw on your snazzy new shirt, walk out into the world, and get a compliment (#3)! That compliment is a peer review, and it’s just made your day. “Hey, that’s an awesome shirt” validates the decision that you, the buyer, made.

The same is true of a consumer waffling over what car dealership to visit/what plumber to call/what flooring business to use/whether tankless is the future/what size private jet to buy (again, if only we could all be so lucky), and that’s precisely why shoring up customers’ confidence with plenty of thorough, verified, peer-produced reviews is so imperative when it comes to sparking, then strengthening, business relationships.

At every stage of your customer’s buying process, you want to be a visible presence. Collect and broadcast reviews from customers all across the Web, prove your great service, and don’t be afraid to request more feedback to make customers of any stage feel good about their decisions (learn how to do all of that here). Respond to reviews (both positive and negative) to keep building rapport and assuring customers that, yes, they chose right.

Stand out from the static!

Comment »

First Negative Review From a Customer

May 15th, 2014 By Ted Paff

We just got our first negative review from a (paying) customer.  Bummer!

screamBut having written about how to deal with negative reviews, I get the chance to eat my own dog food.

Here is the review.

Anatomy of Response

Step 1:  Own the issue.  Regardless of what actually happened, the first step in my response was to “own the issue”.  Yes sir, Mr. Customer, we missed your phone call and it is our fault.   The worst thing I could have done at this point in the response is to give in to the temptation to set the record straight or tell my side of the story.

Step 2: Describe how future customers will not have the same issue.  This is the most critical part of the response to a negative review.  In this case, it is reasonably straight forward.  I simply said that this almost never happens but when it does, we will respond ASAP.

Step 3:  Offer to fix the issue (optional).  Again, in this case, it was easy.  The issue was not hard to deal with.  I helped with the issue on the phone and mentioned that I did so in the review response.  This step is, however, not nearly as important as the prior 2 steps.

So how did we do?  What would you do better?

The Result

I have been waiting for YEARS to get a negative review.  Why?  Have a look at this page.  What is wrong with this picture? Too many good reviews make it look like its totally fake. Negative reviews add credibility to positive reviews.  This negative review helps the credibility of our reviews page enormously.


A FREE Offer to Everyone

If  you have a negative review, regardless of being a customer of Customer Lobby, we want to help you.  Contact us and we can help you craft a response to your negative review.  For free.

ROI report image for blog

Comment »

Local University Seminar: My Takeaways

May 8th, 2014 By Kevin Baca



Last week,  Local University, a comprehensive seminar on local marketing, came to Silicon Valley, and the Customer Lobby member services team took the opportunity to learn from the best of the best.

The bulk of the event is a 4-hour “crash course” hosted by some of the biggest names in local, including Mike Blumenthal, David Mihm, and Greg Sterling. It’s tailor-made for local business owners, and while the scope is fairly broad, the emphasis is on local search optimization. That’s why both Google and Bing representatives were on hand to speak at the event.

The seminar session moved briskly and covered an incredible amount of terrain, but I was struck by how digestible it all was. The presenters have been at this for a few years now, so they careful not to overload with information. Instead, they hone in on the most important pieces of information — things every local business owner should know.

Here are just few takeaways:

1. Don’t bother with tricks

If you own a local business, chances are pretty high you’ve received a call from a “Google expert” claiming to have some technique that will ensure your business appears on the first page of Google search results. Rest assured: He’s not and he can’t.

The days of SEO tricks are over, and the key to building trust with Google is focusing on your customers. Make sure your website is designed to answer their questions and that your listings are up to date with accurate information. That’s enough work in itself, so you may still want to hire someone, but if they start pitching spamy back-link campaigns, looks elsewhere.

2. Make Reviews Part of Your Process

Review solicitations has to be made part of your day-to-day marketing process. Far from being a marketing after-thought, the need for steady review content on Google+, Google Organic search results, Yelp, and other third-party sites is now a cornerstone of digital marketing.

Now, of course I’m biased on this topic. But, the Local U experts make a compelling case for review solicitation because reviews impact everything from search ranking to web presence and ultimately sales.


3. Go After the Low-Hanging Fruit

When it comes to Internet marketing, there are many do-it-yourself action steps that will yield a tremendous return. One of the most straight-forward steps is claiming your listings and ensuring the name, address, and phone number data is consistent. This is fairly straightforward, but it can be time-consuming and it’s tricky to know where to begin. The Local U experts do an incredible job laying out an action plan. Even the Google reps were impressed.

Comment »

Review Strategy: Start With What You Have

May 1st, 2014 By Ted Paff

First, the basics: Online reviews impact your business.  Your prospects look for reviews in each of the several phases of the purchase funnel.  Your current customers are reading reviews prior to making a repeat-purchase decision (we will publish more data on this topic in the future).  Search engines use reviews about your business as a key ranking factor.

Who else looks for reviews about your business?  Potential partners, resellers, banks, creditors, ….. everyone that is serious about doing business with you.  Enough said; reviews matter.

get started

Ask or Wait

The first question in thinking about a review strategy is:  should we proactively ask for reviews or just wait for them to come?

Which group do you fall into:

  • My business get +5 new reviews per month AND our average star rating is greater than 4.5
  • My business gets less than 5 new reviews per month OR our average star rating is less than 4.5

If your business falls into the first group, congratulations…your done with the rest of this blog post!  If not, asking for reviews will help you get more reviews more often and help you get a 42% higher rating on the reviews you get.

Start with What You Have

We suggest starting with a goal of getting 2-5 new reviews every month.  How do you do it?  Start with what you have.

How many customers do you have each month?  What contact information do you have for each of them?  For guidance, assume that 5-15% of the emails you send requesting a review right after service will result in a review IF you are asking them for a review on a website that doesn’t require an account to be created to write the review.  For sites like Google and Yelp that require an account to write a review, assume a conversion rate of less than 1/3 of the guidance above.

Using some basic logic, you can create a plan for your business.  For example, if you only have 2-5 new customers per month, your review invitation strategy is relatively straight forward: contact each customer over the phone (your best way to get their attention), ask if the service was OK and ask for a review (offer to send URLs via email if they need help).   [Pro Tip: use our Customer Call feature which has the highest conversion rate of "ask" to "completed review" of any method we have tested].

On the other hand, if you have hundreds of customers each month but not that many email addresses, consider handing out a paper form requesting a review when your work is completed  [Pro Tip: use our Handwritten Review feature to convert paper-based testimonials into online reviews].

If you get hundreds of new customer emails every month, send an email to each of them asking for a review.  In the email (or on to which the landing page on which you send them), offer lots of different review sites so you can capture reviews from those that have an account on Google or Yelp AND those that do not.  [Pro Tip: use our Smart Invite feature to request reviews on all of the websites your business targets.  For reviews written on Customer Lobby, we syndicate your reviews to multiple sites around the web.].

What ever you decide, focus on creating a repeatable process that will work for you and your team for years to come.  Its a long race.

Comment »

Weather Affects Reviews

April 24th, 2014 By Kevin Baca


According to a recent study of 1.1 million restaurant reviews spanning a decade, bad weather is a predictor of negative reviews. The study, which was reported in the NY Times, found that negative reviews were especially likely when the temperature fell below 40 degrees and rose above 100 degrees.

Hot weather, especially, seems to precipitate negative reviews, as the dog days of July and August generate the most.

It makes sense, I guess. Consumers are understandably more irritable in the sweltering heat and bitter cold. Yet, somehow this data belies the rational expectation that review sentiment should correlate to variables specific to the business being reviewed, and not external factors.

The study covered only restaurants reviewed on sites like Citysearch, Foursquare, and TripAdviser, but it’s fair to assume this phenomenon extends to unsolicited reviews for a range of industries, including local service businesses.

On average, unsolicited reviews tend to be more negative because the people most inspired to actually write a review are often the angry customers. And, as the survey illustrates, the tipping point for these angry reviews can be as arbitrary as a hot day.

So, should businesses wait until the weather is nice to actively solicit reviews? Nah. We have found that good businesses who ask ALL of their clients for reviews will generate mostly 4 and 5 star ratings. After all, they’re good businesses.

Conversely, many otherwise 5-star businesses fail to ask for reviews and ultimately see their aggregate ratings driven down by a few angry customers. Customers who, as it turns out, may just be a little extra grumpy because it’s unpleasant out.





ROI report image for blog

1 comment »