It’s all about finding quality people—that’s what Court Cunningham says is the biggest challenge for Yodle, the local lead gen of which he’s CEO. You need skilled people to both bring in new clients and set up campaigns—for them, they have 140 people in a call center dialing through the phone books and directories. Selling clients is easy—just tell them that the average client gets a 7 to 1 return. Thus, for every dollar they spend, on average they get back $7 in sales.
But the bigger problem is that of retention. How do you actually deliver upon the promise of calls that lead to sales? The small business doesn’t have much money, VC-funded companies have expensive office space, overhead to cover, and profits to generate. Plus, if your agency’s focus is aggressive growth, good sales people cost a lot of money, which further eats into whatever remaining budget you have to spend on the client’s PPC campaigns.
Cunningham mentions that Yodle spends the majority of campaign budgets on IYP (Internet Yellow Pages)—listings fees and PPC spend, as that generates the highest ROI. BlitzMetrics takes a different approach—working more on the client’s website to get it ranking in organic (free) search results. That longer-term strategy arguably takes more effort, takes longer, and is not as automatable as just running a click budget via Google.
By not having to touch a client’s website (whether building a new one or tweaking the existing one), it’s easier for Yodle to scale up their customer base. And should the customer wish to leave, all their traffic disappears instantly.
By the way, Nathaniel Stevens is the founder of Yodle— the brainchild and super genius that started the company, NatPal, while still a student at UPenn. His original vision may or may not be reflected in the current company operations, which is no longer a start-up. We had dinner a couple months back to discuss– more on that another day.
We believe that the strategy that will win for the small business in the long run is to be transparent in our techniques, focus on a blend of natural and paid search traffic, and to help them integrate online marketing into their traditional marketing. The downside of this is that BlitzMetrics isn’t going to grow as fast. But we believe that in the long-run, the marketplace will become more competitive and that we should be delivering at that level now.
It will be interesting to see who will win in the local agency space– the giant companies who are spending lots of money to grow as fast as possible or the myriad of local agencies (with just a couple folks each) that have clients in their own backyards. My money is on the little guy, since there are a lot of unemployed bright people out there who are just starting to grasp the size of the local online advertising market. Those folks will be more motivated than the corporate giants. And we want to help them!
Happy New Year! Thanks for your post about Yodle, inspired by the Borrell’s video. You brought up some interesting points about our business model and I wanted to add some more information as well as correct a few points.
At Yodle, our mission is to connect local businesses with consumers in a process so simple and cost-effective that business owners can’t imagine any other way to advertise.
We have 300 staffers across our five U.S. offices – in New York, Boston, Philadelphia, Scottsdale, Phoenix, and Charlotte. . And in 2010, we will be hiring across the board for sales executives, product developers, internet marketing specialists, and more: http://www.yodle.com/careers. It is critical to our strategy to carefully balance our growth, ensuring each client has the necessary experts to support them in our mission above.
Selling to small business owners no matter what your value proposition is a very large and challenging undertaking.. At Yodle, we invest in education not only for the small business owner, but for our own team, throughout every step of the process. As for our advertising distribution strategy, we take a comprehensive approach – promoting clients across a network of over 70 sites on the web. Our clients are also showing up on the organic results by simply designing and coding their web sites with SEO best practices in mind.
Lastly, Yodle is 100% transparent and accountable to our clients for every dollar of theirs we spend. We not only track how much a client is spending and how much traffic their website is getting, but we also track and record the phone calls that our clients’ ads are generating, so they can easily measure their true ROI. We work with thousands of small businesses every day and fully understand that this measurability and direct accountability of a vendor is crucial.
I hope this has been helpful and that I’ve been able to clarify some of the points you mentioned. Looking forward to a great 2010!
Thanks, Joel Laffer , Senior Director Marketing and Business Development
When I spoke last to Court, he didn’t want to disclose the actual spend figures, so the claim of 100% transparency you make here– it that new? We’d like you to join us in being transparent about actual spend. Doing so would be an amazing step towards closing the education gap, since the majority of local media sellers play the “black box” approach. Please do let us know!