It's Advertising Week here in New York and I've been listening to presentation after presentation about the new, new thing... local advertising. So, here is an excerpt from my upcoming book, Digital Leadership: How to Succeed in a Connected World, about the complete myth of local advertising.
Harry emailed me the other day. He has become a loyal viewer of my television show, and he figured he'd email me and ask me if I could send him info about web marketing for his carpet and floor covering company. I wasn't sure quite what to send him, so we set up a call.
After pleasantries were exchanged, Harry cut to the chase, "Can you get my website to the front page of Google?" Really, this is an exact quote. "... the front page of Google?" What Harry wanted was obvious, but his choice of words betrayed anything other than superficial knowledge of what he wanted from me.
To be polite, I suggested that before he did the SEO and SEM necessary to accomplish his goals on Google, he might want to think about what his business goals were. He told me that his website was created for him for free by a company that now wants to charge him money, but he thinks they are asking too much.
I told him I thought his website was worth exactly what he paid for it and suggested that he take it down and put up a nice splash page with some pictures of carpeting, the locations of his stores with links to Google Maps and his phone number. Then he asked me, "Will that get me to the front page of Google?"
At this point I was fascinated with the conversation, so I went into my standard explanation about business goals, like selling more carpet and floor covering. I spoke about conversion metrics and how he might measure the success of his web marketing efforts. Driving foot traffic over the doors of his two retail locations, etc.
"How much will this cost?" asked Harry. I answered, "It won't cost you anything; it will make you money." Harry did not understand. We discussed the investment he would need to make in a comprehensive marketing plan for his business and spoke about workflow, execution and the differences between advertising, marketing, sales and public relations. After a ten-minute lesson in 21st century retail marketing, Harry asked me, "Will that get me to the front page of Google?"
Finally, I asked him how much he thought he should spend to create a website that would increase his business. "I don't know," he answered. "The one I have was free."
When I reiterated that his free website was probably hurting his retail business rather than helping it, he asked me for some free suggestions that he could implement for free that would... yep, you guessed it... get him to the front page of Google.
This is a real conversation that actually took place. I've changed the owner's name, but other than that, this is exactly how it went. Let's review:
There is no incremental local retail advertising to be had. The money simply isn't there. If a local company is big enough to advertise, it is already doing it. If it is not big enough to advertise -- there's a reason. The myth of local advertising is that it exists at all. It simply does not.
There is no version of the world where Harry's business is worth going after, or taking. He will require three times the amount of customer handholding that a customer three times his size would require. He will never spend enough to justify speaking to him. He will torture you for every dollar he is asked to spend, because of how hard he has to personally work to make the dollar in the first place. Harry is a real person with a real business... but he is not a growth opportunity for a technology-driven hyper-local advertising business. Harry is not a growth opportunity for anyone -- not even for himself.
You can't go door-to-door to find lots of Harrys. You can't afford the customer service. You can't expect him to use a dashboard without training. It will cost you so much money to acquire Harry as a customer that you could never get an ROI on the customer acquisition cost.
Next time someone brings you a new business model and talks about local advertising as the market, look up a local carpet and floor covering retailer with a couple of doors and $1.5 to $2 million in gross sales. Ask the proprietor about how you can help him, and don't be surprised if he asks you if your technology can "get him on the front page of Google."
Follow Shelly Palmer on Twitter: www.twitter.com/shellypalmer
"There is no version of the world where Harry's business is worth going after, or taking. He will require three times the amount of customer handholding that a customer three times his size would require. He will never spend enough to justify speaking to him."
You're correct, that's why it's up the owner to do it on his own and why you and all the other people write books telling them how to.
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There's an auto shop in my neighborhood that specializes in Japanese cars. It started out six or seven years ago on a "just drop by" basis, but today it's booked solid a week in advance. The owner is friendly, honest, and competent. His Yelp reviews are adoring, though they increasingly complain about the long appointment lead times.
I've suggested to him that he's leaving money on the table since some customers can't or won't wait that long. But all he sees is that he has a week's worth of guaranteed work all the time, and that's enough. He doesn't want to extend his hours into the weekend, nor does he want to open a second shop in the area. He doesn't do the work himself, of course, so managing two shops within a mile of each other wouldn't be that much harder, but he doesn't want to do it.
He also assured me that it's not always that he's booked far in advance. Just sometimes. If true, that's even worse, I told him, because he's subject to feast or famine. A lot of his work is oil changes and scheduled maintenance, so he could smooth out the variability with better customer management. But he just didn't see it.
Someone pointed out that, except for the restaurants, the businesses wouldn't attract business from across town. I agreed but thought that businesses could at least take business from each other. But I couldn't get the numbers to work. I'd need hundreds of clients, and if I managed to sign up that many, I wouldn't have time to handhold them.
Worse, they are some of the most unimaginative people ever. They're not entrepreneurs. I don't mean to put them down, but most are otherwise unemployable and are basically slaves to their corner grocery stores and sandwich shops. Like Harry, they really don't have a head for business. That's why their businesses never grow.
The old saw "a business grows or withers" is a myth when reflecting food on the table business. I have friends who operate second generation businesses. They neither grow nor wither in real terms. They simply pump enough income to provide the owner a decent living. Feast or famine ?? At times, but attention to detail enables owners to avoid feasting away the excess to make it available for the famines.
Unimaginative ???? Hardly !!!! They simply refuse to buy into the pitch growth is a goal in itself.
Your push to "at least take business from each other" simply leads to community rot. In fact on a larger scale it is exactly that mentality that leads to many being dependent on a few.
Yes, they do appear to be slaves to their shops. In fact anyone with a successful small business will admit that the business owns them, they do not own the business. That is the reality of small business and many do not consider it an unequal trade in exchange for the freedom from being a slave to a boss or Corporation.
No, they do not have a head for business as you define it. They simply have a head for making two ends meet, as often as not quite nicely.
And I agree it's a dog-eat-dog world, but I didn't make it that way. I'm just a skinny little dog trying to survive.