Amazon Stores: Books, Branding or the Future of Retail?

Photo credit: Yelp
Credit: Yelp

This past week there has been considerable discussion about Amazon potentially opening several hundred book stores in malls around the country. This was sparked by an article in the Wall Street Journal in which the CEO of mall operator General Growth Properties discussed these alleged plans.

GGP subsequently was forced to issue a short press release that said CEO Sandeep Mathrani was incorrect in his assertion about Amazon’s plans:

General Growth Properties, Inc. Chief Executive Officer Sandeep Mathrani has indicated that a statement he made concerning Amazon during GGP’s earnings conference call held on February 2, 2016, was not intended to represent Amazon’s plans.

Amazon opened a physical bookstore in Seattle last year. I’ve not visited but the store sells books and the Amazon device lineup including Echo. Amazon isn’t the first click purveyor to open stores; there are other e-tailers that have gone from clicks to bricks — notably eyewear retailer Warby Parker. And Google has long flirted with opening stores.

Internet Retailer is now reporting (according to a source) that Amazon is indeed planning to open more bookstores but in roughly 10 markets in the US (not 300), which haven’t been finalized. Re/Code reports that “books are just the beginning,” citing unnamed sources.

This makes sense; it makes almost no sense for Amazon to open a bunch of books-only stores unless those stores served other objectives beyond selling books. The Re/Code piece intriguingly suggests that these future stores will offer a true omnichannel experience and thus be models for the future of retailing:

[The Amazon] retail team’s mission is to reimagine what shopping in a physical store would be like if you merged the best of physical retail with the best of Amazon.

As expensive as they are retail stores are critical for branding and long-term success. Very few online only e-commerce sites are truly sustainable. This seems to run counter to the post-holiday narrative that argued clicks were surging while bricks were flailing. That analysis is superficial.

Ebay had a bad Q4, which is some evidence of what I’m saying. Most of the e-commerce action was at the online divisions of brick-and-mortar brands. Stores give consumers confidence to buy online, with the knowledge they can return items locally.

Amazon was the major pure e-commerce story (although Q4 disappointed). The site captured an amazing 34% of e-commerce visits in November and December last year. Yet the opportunity further develop brand strength and grow sales is there for Amazon. And physical stores are a key part of that potential growth.

Actual stores can serve a range of functions for the company: return/pick-up sites, product showcase and brand builder. Amazon can eventually sell a wide range of products (and services) through physical locations.

What’s also interesting is that Amazon is in a position to create model experiences that do represent the future of retailing. Following a disappointing holiday season, retailers are starting to panic, which may be good for innovation. But they have been slow to develop new customer experiences.

Awhile ago I had an interesting conversation with the folks at SmithMicro about how mobile should ideally be used in retail. Most of retail thinking about mobile has been fairly limited to date: store maps, coupons.

The idea should be to deliver better service and a better overall experience to the in-store customer. That’s how bricks will beat pure-clicks: service + experience. SmithMicro was calling it the “VIP experience.” Identifying when your best customers are in the store, for example, or personalizing experiences for in-store customers are powerful things that can be done on mobile, among others.

Most traditional retailers are not set up (organizationally or culturally) to bring these kinds of next-generation experiences to fruition. Amazon is, however. It will be interesting to see what the company rolls out.

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Reviews Rashomon: Plumber Remembers Yelp Threat That Never Actually Occurred

five stars

Yelp has been accused of manipulating local reviews to “blackmail” business owners into advertising on the site. It’s widely believed that Yelp uses the threat of removing positive reviews as leverage accordingly.

Beyond this belief — and related claims in unsuccessful litigation against the company — I have never seen actual evidence that Yelp does this. The company has always fought these allegations and argued they’re unfounded — yet they persist.

Thus we have a mysterious situation: no one has been able to prove that sales reps are making these statements or threats to business owners. But many people are firmly convinced that this is happening. Most recently I heard this again from a business owner a couple of weeks ago in Austin, Texas at the LSA Bootcamp during the Yelp session.

A month or so before that I had a plumber replace my kitchen faucet. As I do with all service professionals I engaged him in discussion about how he marketed himself and where his leads were coming from. Yelp was one of the primary sources.

He then told me that he had been solicited to advertise on the site and that he declined but was told by the telephone sales rep that his reviews could potentially be affected if he didn’t. This was the first time I’d directly heard this from a business owner.

In my mind this was the first real “evidence” that some sort of sales manipulation might be going on. I informed Yelp of my exchange with the plumber and it was immediately disputed: “That didn’t happen,” I was told.

To make a longer story short, Yelp invited me in to listen to the sales calls with this plumber, whom I identified to the company. Yelp records its end of sales calls but not the business owner’s conversation.

I sat in Yelps offices and listened to what must have been 25 – 30 calls to this plumber. Most of them were trying to set up appointments to discuss Yelp advertising. And there were at least two Yelp sales reps who were trying to close the account; a second one took over after the first one was unsuccessful.

There was nothing that sounded like a threat or any suggestion that reviews would be removed or otherwise altered by Yelp if the guy didn’t advertise. There wasn’t anything that could be construed as even implying that.

If you’re a true conspiracy theorist you might now be inclined to believe that Yelp edited the records or omitted key conversations. But I can tell you it did not; I listened to the entire tiresome sequence of calls.

Yelp also tracked down the sales reps on the account and questioned them about the plumber and their interactions with him. The reps denied there were any implied or explicit threats.

I believe the Yelp version of events and I was exposed to evidence that supported it. Yet my plumber still got this impression from somewhere. That’s the mystery here.

It could be that the “Yelp extortion” meme is in the SMB zeitgeist and it colors the perceptions and interactions with Yelp reps. It’s also the case that what used to be called the “review filter” is not well understood by SMBs. So that plays into the review manipulation belief.

There’s a clear disconnect between what the plumber told me and what I was exposed to at Yelp, which just didn’t support his version of events. I concluded that Yelp didn’t threaten the guy directly or indirectly.

I can’t explain how he formed his impression. It’s Rashomon. How would you explain what might have happened in this case?

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Use of Data, Exposure of Vendor NPS Scores Could Shake Up Sales in Local Market

Lawyer marketing score

Online advertising and marketing programs for small businesses (SMBs) have historically suffered from high non-retention or “churn” rates and little transparency around vendors and their relative performance. SMBs often don’t fully understand what they’re buying and don’t know how to evaluate providers.

The local-digital segment is cluttered with companies making similar-sounding claims and selling similar-seeming products. Small business owners have had difficulty choosing marketing vendors and telling them apart.

They’re seduced by pitches only to be disappointed by performance.

Now the market may be on the cusp of major changes because of the increasing availability and use of “big data.” More sophisticated applications of data are starting to enable more efficient advertiser acquisition by local media companies and sellers. But data will also lead to greater service-provider accountability and new insights for SMBs on which marketing firms do a better job.

Through web-crawling and other methods a number of local sales organizations are identifying areas of SMB weakness or digital deficiency (e.g., low search rankings, no social presence, no mobile site, etc.) and benchmarking them in their respective markets. Individual businesses can be compared against their competitors: “podiatrists in Seattle,” “lawyers in Houston,” “pest control companies in New York.”

This kind of information is very effective in getting SMBs’ attention and starting a sales conversation. Moreover it can be done with email, as opposed to costly outside sales reps.

Roughly six years ago an Israeli company, Palore, introduced a service called AmIVisible, which provided “visibility scores” to SMBs. This was essentially a combination of SEO ranking and presence data on relevant sites beyond search. It used these scores to generate leads for local digital media sellers. Well ahead of its time but with limited revenues, investors ultimately decided to shutter the firm.

A new group of companies has developed the “2.0” version of this model, using analysis of SMBs’ digital presence to help sales organizations do a better job of identifying prospects and customizing marketing packages to suit the actual needs of businesses – rather than simply pushing their menu of products.

I’ve written about Vendasta and Buzzboard, among a couple of others. However a new company, Lawyer Marketing Score (LMS), is starting to offer similar SMB visibility data to marketing agencies, for improved outreach and close rates.

What’s also very interesting, and different, is that the company is seeking to compile information on marketing services providers as well. LMS is collecting net-promoter scores (NPS) on the marketing vendors serving the local-SMB segment. Alignable is also gathering NPS data but for different purposes.

It’s hard to overstate the potential significance of generating NPS rankings and making them available to local advertisers. As indicated, the market has been largely opaque to local business owners because there hasn’t been any objective source of data on the sales and marketing organizations soliciting SMBs.

The sheer number of pitches and the historically disappointing performance of many digital marketing programs have generated widespread skepticism and distrust among SMBs. For example, a 2015 SMB survey from the UK conducted by Microsoft and Latitude White, found that “only one in five SMBs (18%) … trust SEO and PPC agencies.” Essentially 82% of business owners don’t trust the vendors they worked with. The US numbers are similar.

Some firms are unethical or knowingly over-promise to close sales (e.g., “We can make you number one on Google”). In other cases marketing outcomes simply don’t live up to sales promises. Customer service is also poor in many cases, which is a separate problem but affects advertiser retention.

Identifying which firms are trusted and well rated by the community of SMB advertisers could have a dramatic impact on the market. In much the same way that consumer business migrates to well reviewed restaurants or plumbers on Yelp, this could happen to marketing vendors if their NPS scores are made available and publicized.

Remarkably this has never been done before in any systematic way. I’m speculating but it could quickly separate the most effective firms from the rest of the pack. Customer service will be a major component of the scores as well.

The use of data to customize the sales presentation and speak directly to the specific needs of the individual business will dramatically alter the approach to segmentation and selling in the local-digital market. If used correctly tools like LMS could make less seasoned telephone sales reps more effective than even traditional feet on the street. Local sales prospecting could be largely automated, turning acquisition into something that more closely resembles inbound marketing.

In the most extreme version of this scenario, content marketing becomes less necessary because the precision of the data-driven approach eliminates the need to develop lots of content to generate leads. A highly customized “digital audit” or presentation addressing an SMB’s deficient mobile presence is likely to get more attention than an ebook on the importance of mobile-friendly websites, which must still be marketed itself.

More sophisticated SMB data is starting to make its way into the sales process. If used thoughtfully and correctly, data will bring about real “consultative selling” and lead to lower costs and greater overall success for SMB acquisition and retention.

Finally exposure of vendor and agency NPS scores by LMS, which is currently only operating in the legal vertical, could shake up the market, identifying the best performing firms and putting pressure on others to improve or die.

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Yelp SMB Survey: 75% on Social Media, Focused Most on New Customers

Yelp logo

Last month Yelp released the results of a survey of 901 of its own small business members. I missed the release at the time so I’m circling back to it.

Among other things, the survey asks questions about 2016 revenue expectations. It also wants to know which candidates respondents are likely to support and so on. I’ll skip those questions and responses.

Below are the questions and answers that caught my attention. It should be emphasized that these respondents are not randomly selected SMBs; they’re Yelp members and so perhaps more digitally savvy than average.

Q: Which of the following, if any, do you currently use when marketing your business?

  • Social media platforms — 75%
  • Consumer review platforms — 48%
  • Search engine advertising — 48%
  • Customer relationship management tools — 32%
  • None of these — 9%

Comment: the number of businesses with a social media presence (probably Facebook) far exceed the number doing SEM. However this question did not ask specifically about social media advertising.

Q: How strongly do you agree or disagree with the following statement – digital marketing has helped my business acquire new customers.

  • Agree strongly — 43%
  • Agree somewhat — 42%
  • Disagree somewhat — 9%
  • Disagree strongly — 6%

Comment: 85% of respondents believe that digital marketing is beneficial vs. 15% who do not. No surprise here.

Q: In which of the following ways, if any, is digital technology helping your business succeed?

  • It helps me attract new customers — 71%
  • It helps me build relationships with existing customers — 43%
  • It provides access to real-time customer feedback — 35%
  • It helps me grow my business efficiently — 32%
  • It provides a cost-effective way to manage non-core elements of my business, such as accounting — 21%
  • Other — 1%
  • None of these — 11%

Comment: The majority appear to believe that digital media are most useful for new customer acquisition. However most SMBs probably get the bulk of their revenues from existing customers. A meaningful minority (43%) do see digital marketing as a tool to build and strengthen existing customer relationships. But a large group of these respondents don’t apparently recognize the ways that digital tools can help with loyalty and existing customer frequency.

Q: Which of the following is the biggest advantage of running a small business?

  • Doing something I love — 31%
  • Having the flexibility to work how I want — 21%
  • Making a difference in my community and local economy — 19%
  • Being my own boss — 16%
  • Controlling my own financial destiny — 10%
  • Other — 2%

Comment: Many people go into business for themselves for reasons that have to do more with lifestyle issues than making money. That proposition would seem to be validated by the hierarchy of responses above.

This raises the question about how much these businesses want to grow and how willing they are to spend on marketing or how critical they view marketing to be overall.

The majority of these respondents do seem to recognize the importance of digital media and marketing in general. Yet their degree of commitment to digital marketing is unclear. Someone may have a Facebook Page or claimed a Yelp profile but still not advertise.

Your thoughts? Anything jump out at you or that you find interesting here?

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True Local Search Launches on Facebook

I have long maintained that Facebook would have difficulty converting SMB Page owners into advertisers until it was able to deliver a real local search experience. Until yesterday Facebook didn’t have one.

Users could search for individual businesses by name. And Facebook had a version of a city guide (Places Directory) that it didn’t heavily promote, which was kind of like guided browsing. But now it has a real local search site.

Facebook local search

I was made aware of this today but people apparently spotted it yesterday. The launch of this site is significant but in no way a “Yelp killer.” That’s because the user experience is OK but not great. And there’s no app-manifestation of this as far as I’m able to determine. However users can access this content on the mobile web.

Most of the action and lookups here will be via mobile devices; so I would expect Facebook to develop either a stand-alone app or to integrate this capability into Facebook’s main app ultimately. What’s interesting is that you can’t get these same results from the main Facebook search box. There’s a separate “what, where” box that shows up under the url: Facbook.com/services.

This is a big, inevitable step for Facebook and a critical one if the site is to covert more of its 45+ million SMB Page owners into advertisers.

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Nextdoor Moves In on Facebook, Yelp, Craiglist with New Local Services Directory

Nextdoor homepage

Over the past few years, in several conversations with Nextdoor CEO Nirav Tolia, I’ve discussed with him the site’s various opportunities to make money. Like all good startup CEOs Tolia said that he was focused on building audience engagement and that there were several ways the site could make money over time.

In November 2013 I wrote about one of the obvious, potential ways:

If Nextdoor were to continue to with its current momentum it could eventually become a primary source for local business recommendations as well as a classifieds resource. All this remains to be seen, but the company has made it farther than many would have predicted at the outset — including me.

The company has just started to make its move into local services with the new “Neighborhood Favorites” — essentially a directory of local services providers. This feature has just launched and, for now, has limited geographic availability:

Nextdoor recently launched Neighborhood Favorites–an easier way to find the top local businesses in your neighborhood. Through Neighborhood Favorites, Nextdoor members will be able to search for a business and see all neighbor replies and comments in one, easily searchable list.

Currently, this feature is only available in Alameda and Contra Costa counties in California. On November 17th, it will also be available for members in Collin County, Texas and King County, Washington.

Nextdoor

One immediately striking thing about this is that there are already quite a few recommendations in these categories:

  • 61 recommended dentists
  • 42 recommended auto mechanics
  • 34 recommended electricians

The businesses, which are all very local, are ranked by number of recommendations. I can click on any of these links and see the individuals who recommended the business and what they said about that specific business. Only those in immediate and adjacent neighborhoods can make local recommendations or see them.

This is what one of the category pages looks like:

nextdoor

What you get is a kind of Facebook-Yelp-Craigslist hybrid. It’s like Facebook in that I can see which of my neighbors have recommended the business; these are real-identity recommendations. It’s like Yelp in that users can search for businesses and the presentation of rankings is user-friendly and straightforward. It’s un-like Craigslist in that it represents a trusted alternative for classifieds listings, which will undoubtedly come later in the form of some sort of formal marketplace.

Facebook has lots of great reviews and user-generated local business content but the site has taken its sweet time about making that content readily accessible to consumers (still waiting for a “Places” app). Discovery of this development may light a fire under Facebook’s posterior however.

Neighborhood Favorites should also concern Yelp. However Yelp’s user base and heaviest usage categories may be distinct enough that Nextdoor isn’t an existential threat. Other sites such as Angie’s List and HomeAdvisor should also be quite concerned about Nextdoor’s “disruptive” potential in their markets. It goes without saying that internet yellow pages should equally be concerned, from a consumer product standpoint.

Another interesting thing here: Nextdoor doesn’t rely on SEO for discovery and/or usage. Google and maybe Amazon home services ads/listings could in the longer term be negatively impacted should Favorites take off.

People ultimately want fewer — not more — sources of local information. They don’t want to use 10 sites to find a plumber or handyman. If Nextdoor presents enough choices with enough context and credibility it could become the primary local business discovery site for many people.

Nextdoor explains on a FAQs page that it has used a “third party tool” to identify and organize this content. Essentially it has mined its posts and seeded the directory accordingly:

To make it easier for you and your neighbors to find older content, we’ve used a 3rd party tool to help us identify and classify all previous discussions around business recommendations. The 3rd party tool was not privy to any member account information and could only access replies to recommendation posts stripped of member identification.

Now the site is soliciting recommendations directly. Last week I received this email:

Nextdoor

I have sold things through Nextdoor and I’m now going to look for a plumber and electrician on the site. Given that Nextdoor users are likely to trust their neighbors (even if they don’t know them well), I would expect that Neighborhood Favorites will quickly become a go-to source for local business referrals. (In my Nextdoor Feed I now notice daily requests for all kinds of service recommendations, especially home service professionals.)

Nextdoor could sell placement, visibility and/or native inclusion. It could also sell presence or functionality to business owners (e.g., enhanced presence, appointments, payments). There are a variety of monetization scenarios.

Nextdoor’s penetration is already nationwide and quite significant at this point, though still under the radar for some. This Favorites launch marks a new phase in the site’s development and a formal move toward a business model. It also means the formal arrival of a new player in the “local search” ecosystem.

Update: I just used Nextdoor Favorites to find a plumber to do a sink faucet install. I found two names on Nextdoor that were recommended and “validated” by looking them up on Yelp. Called both and picked the one with immediate availability. Didn’t use Google at all.

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Will Google’s New ‘App Streaming’ Kill App Downloads?

Apple Watch Apps

Complaining that the world of apps was not enough like the web, Google, Facebook and others sought to enable deep linking within apps. Apple has recently joined the party as well.

In one way this makes great sense. Deep linking and app indexing allow users to access and discover content within apps or go directly to relevant “pages” within apps. Previously users were sent to the app homepage or, worse, to a download page.

Before deep linking and app indexing, the shift from the PC to mobile apps threatened Google’s position at the center of the internet user experience. Rather than navigating to desired content via Google, as users generally do on the desktop, they could go directly to their favorite apps. Google was often left out of the equation. For many publishers this was also an opportunity to establish or, for some, reestablish an “unmediated” relationship with users.

To be sure, search is vigorously used in mobile (now more than on the desktop). Still, the mobile user relationship to Google, especially for iPhone users, was different than on the PC. Deep linking and app indexing have started to change that and put mobile search back in the center of the user experience.

In classic Google fashion the just announced “app streaming” is both a great user-experience innovation and a highly self-interested move:

[Y]ou’re also going to start seeing an option to “stream” some apps you don’t have installed, right from Google Search, provided you’re on good Wifi. For example, with one tap on a “Stream” button next to the HotelTonight app result, you’ll get a streamed version of the app, so that you can quickly and easily find what you need, and even complete a booking, just as if you were in the app itself. And if you like what you see, installing it is just a click away. This uses a new cloud-based technology that we’re currently experimenting with.

As Danny Sullivan writes, this is a beta test with a small number of app-developer partners right now. There are 9 partners, including The Weather Channel and Hotel Tonight. Danny has other details, such as the capability will only work over WiFi and on Android devices for now.

I have not yet had a “hands on” experience with app streaming but it promises to deliver the content and functionality of apps via search results without the need to actually have the app on the phone. The benefits for mobile search and Google here are obvious: it will make mobile search more useful and more encompassing as a content discovery tool for mobile users.

From a publisher-developer perspective one argument in favor of app streaming is that it’s like SEO in a way and a new way for users to discover apps and app content. The hope would be that after deeper exposure they’ll download the app directly. And that may well be.

It’s also possible that users may be less inclined to download new apps because they’ll be able to access in-app content via mobile search. Storage space is limited and most installed apps are used only occasionally. Thus users may be disinclined to install new apps because they can access them as needed through Google. (This is an “empirical question” that will be answered over time if the program expands.)

Google, for some of the reasons above, has always been highly ambivalent about mobile apps. In the beginning Google saw apps as a kind of bridge between the desktop internet and the new mobile internet. Google’s Vic Gundotra (no longer there) and others such as Tim O’Reilly argued that the mobile web would, of necessity, inevitably supersede apps.

That didn’t turn out to be the case. In fact things went in the opposite direction; apps became much more popular and much hand wringing ensued. Google and others have now intervened to change things (Steve Jobs may not have been as eager to do app indexing). Some go further to argue that Google has been working “to make apps obsolete.”

Between deep linking, app indexing and now app streaming Google is making more apps more accessible to more users and improving the mobile search experience. But it is also partly undermining the app user proposition and reinserting itself between users and publishers.

Whether you see a benevolent objective (improving the mobile user experience) or a primarily self-interested one depends on how you view Google. I believe that both motivations coexist in app streaming.

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Many Digital Marketers Seem Just As Confused, Overwhelmed As SMBs

Confusion

From behind a two-way mirror this evening I observed a 90 minute focus group. It consisted of representatives of digital agencies — mostly larger agencies. It was interesting to hear them discuss their digital marketing challenges and pain points.

They spoke about the challenges of dealing with clients that were not sufficiently educated or were conflicted about their priorities and objectives. They discussed organizational challenges with different internal groups not coordinating their efforts or working together smoothly. Despite their size they also spoke about not having sufficient resources to do what they needed to do.

Yet I was most struck by their complaints about their inability to clearly distinguish the different vendors and solutions in the market. Their statements reflected pervasive confusion and noise that we all now confront.

They also said they didn’t feel they had sufficient visibility into what was working or most effective. They had challenges demonstrating ROI to clients and connecting the dots between ads and sales.

Amid all the similar-sounding yet competing companies and claims, they convey the impression that they don’t know whom to believe or trust. It was difficult for them to get objective information, notwithstanding the market being awash in data. They also didn’t appear to know as much as they claimed they knew and were relying on vendors for education, which was a source of some frustration.

For the most part this is exactly the position that most small businesses are in:

  • They want and need education
  • They don’t know exactly what’s working and it’s difficult for them to gauge ROI
  • They are bombarded by pitches that all sound similar
  • They don’t know whom to trust and so don’t trust most digital marketing providers they encounter (or even work with)

Clearly there are digital agencies that are doing great work and that are highly sophisticated. But to what extent do you think these things I’ve said above are representative of digital agencies generally?

I was quite surprised to hear some of the things I heard and I’m wondering how much I can extrapolate to the larger agency universe.

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For Most SMBs Customer Service Matters More than Ad Performance

Causes of SMB churn

The two main causes of small business (SMB) advertiser churn have to do with poor (perceived) campaign results/performance and customer service frustration. These are captured in the LSA-research chart above. But these same reasons are repeatedly cited in other research.

I’ve had a number of conversations with various sales organizations recently that suggest customer service is the single biggest variable that will affect advertiser retention. Certainly marketing performance is critical and notwithstanding the order of reasons in the chart, there’s ample evidence that customer service is the most important factor.

RearchLocal recently indicated that it has focused more resources on customer service and seen positive results. Loyalty platform Belly has also touted customer service as a key differentiator vs. other SMB marketing platforms and tools.

Net promoter data collected by Alignable not long ago showed that GoDaddy’s customer service was a key factor in its win in the webhosting category. While some providers (Wix, Squarespace) were regarded as more “usable,” from a DIY perspective, GoDaddy triumphed because of customer service:

According to Alignable’s NPS data of over 4,500 ratings submitted across 25 leading small business brands, GoDaddy is the most highly recommended website provider.

Despite the rise of so many new, sleek “DIY” platforms available to small business owners, GoDaddy not only has the highest NPS score, they ran away with it. Elite customer service was the core component of almost every user review that was submitted regarding GoDaddy.

Google has data that show up to a third of SMB customers who churn out of marketing programs would be willing to return if contacted — by apparently they’re not contacted. This is a customer service issue.

Google has also said (as have others) that in situations where there’s an in-person sales relationship advertiser retention is stronger than a telesales relationship. And there’s quite a bit more evidence like this. When outsourcing their marketing, what SMBs want is a reliable and trusted relationship. They don’t want to be “upsold,” they want a place to turn for real help.

Unfortunately a lot of what passes for SMB marketing “education” is thinly veiled sales and many reps (in person or on the phone) are given incentives not to help advertiser but to hit quotas and sell certain packages.

Marketing performance and related metrics are important. I’m not saying they’re not. But today companies are throwing every conceivable piece of data at the SMB: impressions, clicks, calls, form fills, etc. This is usually in the hope that the advertiser will see value or be convinced that the program is “working.”

What might be more effective is taking the time to listen and understand the business owner and going the extra mile to deliver great service. Does anyone disagree?

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After $1 Billion Sale to Webhost EIGI, Will Constant Contact Keep Its Soul?

Constant contact pricing

This morning Constant Contact announced that it had agreed to be acquired in a deal valued at roughly $1.1 billion The buyer is webhosting company Endurance International Holdings Group.

Endurance is focused on the SMB market and has a number of brands including Bluehost, Homestead, Domain.com, Typepad (among others) and now Constant Contact, which immediately becomes the jewel in the company’s portfolio — especially with the new Facebook integration. Beyond that Constant Contact offers a number of other marketing products.

The acquisition makes sense for both companies and positions Endurance to compete directly with GoDaddy and Web.com, which offer a full range of of marketing services beyond webhosting.

The question is whether Endurance will leave the Constant Contact culture intact. If it simply treats the acquisition as  “tool” or a “product” in its broader offering it will see an eventual exodus of customers to other email providers.

Even as some enterprises and brands have shifted focus to other channels like social media, email remains one of the top three or four methods most SMBs use as part of their marketing mix.

The impetus behind the sale for Constant Contact may have been the company’s basically flat share price (it’s up today) and a desire to get away from the mania of quarterly reporting. By the same token, it was pointed out to me, that EIGI was trading below its IPO price.

The company needs to be able to tell and demonstrate a larger growth story to the market (i.e., webhosting + marketing services for SMBs). The visibility and strength of the Constant Contact brand now becomes the biggest single part of that story.

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