What Percent of SMBs Are Willing to Pay Yext’s $500 Annual Fee?

Yext has a range of business listings management plans — from $200 to $1,000 per year. At the top level you get reputation management as well. The “best value” package is $499 per year.

Some local SEOs have expressed skepticism about whether local businesses would pay that much. David Mihm and I were having a debate about this on Twitter last week. So I did an online survey and asked 500 SMBs the following question:

Would you be willing to pay $500 per year to ensure your business is correctly listed on important sites across the internet?

  • Yes — 34%
  • No — 61%
  • Other — 5%

Most of the “other” category comments were requests for more specific information. Here are several representative responses:

  • depends on if it’s guaranteed and on what sites
  • depends on what the important sites are
  • I can do that myself
  • would depend on the specifics
  • depends on the company listing
  • need more details
  • depends on the guarantee

If a couple of percentage points from the “other” category migrate after specifics, let’s say that 36% would be willing to pay the $500 per year. And if there are 25+ million small businesses in the US and the “addressable market” is half of that (for argument), then the annual opportunity is $2 billion at least.

What’s your perspective on this? Do you find this persuasive or remain unconvinced?

You can follow any responses to this entry through the comments feed.

17 Responses to “What Percent of SMBs Are Willing to Pay Yext’s $500 Annual Fee?”

  1. Scott Barnett says at

    Has Yext reported churn rate? That’s a very important part of this discussion. How many folks who have paid the $500 already return in year 2?

    IMHO, the only part of your sample that would be valuable to me are the 5% that asked more questions. Simply asking a Yes/No question is way too open ended to make a meaningful conclusion. In other words, more data please! 🙂

  2. Greg Sterling says at

    The point of this exercise was to determine price sensitivity and and willlingness to pay.

  3. Scott Barnett says at

    Your question doesn’t do that. I would ask an open ended question, not a yes or no. Too easy to answer, too ambiguous and no rationale. I’m not saying this makes me believe or not believe there is a market, simply that I wouldn’t accept (or reject) your numbers based on that single question.

    “Would you spend $50K on a car?” – if you answer yes, it doesn’t mean you actually will.

  4. Greg Sterling says at

    Disagree

  5. Perry says at

    If you asked would you pay $500 to be listed everywhere or pay ($100?) to be listed on the five most impt sites, I suspect the numbers would be dramatically different.

  6. Greg Sterling says at

    Surveys are inherently problematic in this way. But the lower price point and emphasis on “five most important sites” would certainly bias the outcome.

  7. Drew Hannush says at

    I think it’s all in how you sell it. Consistent information, in and of it self, sounds a little flat and lifeless. But when you connect it to people calling the wrong number, thinking you’re out of business, not finding you, or the holy grail “better Google rankings,” I think the price is cheap.

    To answer “I can do it myself,” I say, yes, but how much is your time worth? And now with attributes becoming more important, there are other values this service can bring, especially to hospitality businesses.

    You have to show value, otherwise, you’re just selling a spend of $500.

  8. Greg Sterling says at

    Agree.

  9. Pat Marshall says at

    Were the respondents were given “perfect knowledge” of the features and benefits of purchasing the Yext package? If so, then the survey results would indicate that there are a sufficient number of SMBs to make this interesting for Yext. If not, then the survey is too flawed to really mean much.

  10. Steve Bell says at

    The analysis is way off because as any true small business expert will tell you, there are not 25M small businesses in the USA, there are 7M. 25M is frequently cited but if you look at the numbers most of them are holding companies or zero employee operations for various reasons.

    In the US, there are 7M businesses with 1-10 employees, 1M with 11-50 employees. Interestingly there are only 17,000 businesses with 500 or more employees. The numbers have not changed a lot over the past 10 years.

  11. Scott Harris says at

    The problem with the $500 price point for small business clients with a limited budget is that this is a big ticket item that doesn’t leave any room for markup by the SEO consultant. For less than half of the Yext spend a price sensitive client could use a manual citation building service for around $200, get listed in more places and not be required to pay again every year. Of course, the downside for the client comes when there are any updates needed.

    I think Yext would be well served to lower their $500 price to around $300, because at that price, i could make the argument that it’s a good value.

  12. Greg Sterling says at

    I didn’t use the 25MM number. Analysis is not “way off.” Some digital services will appeal to what used to be called “SOHOs” and some only to larger more serious businesses (not talking about Yext now). Depends entirely on the product. This survey was only to test price sensitivity and determine whether the $500 was going to be flatly rejected by the majority.

  13. Greg Sterling says at

    Survey is not “too flawed.” Fundamentally no online survey can provide “perfect knowledge” of anything. This was — once again — only to determine how resistant people were likely to be to the $500 pricing.

  14. Greg Sterling says at

    That’s something to discuss with Yext. I have no idea what their costs are. But to penetrate the SMB market, where their future growth as a public company is likely to come from, they may well need to do something like what you describe.

  15. - Tidings says at

    […] SCREENWERK.COM […]

  16. Minutive, Vol. 56: Fake News, Fake Reviews, SMB Market Research, and More. - Tidings says at

    […] SCREENWERK.COM […]

  17. Dave says at

    The questions and results are interesting. Did your survey respondents understand about citations? My own experience is that many don’t. Its a very open question by using the phrase “important sites across the internet”. Any more clarification on the respondents or their understanding of that phrase?

  18. Greg Sterling says at

    No. No discussion of citations. That’s an industry term that SMBs don’t know.

  19. Joshua Mackens says at

    Yext’s price point is very high, I agree. Especially considering you have to pay it annually or lose your listings. There are better alternatives out there to Yext that will do the one time work for a one time fee where you get to keep your listings. This is how savvy Local SEO companies do it and how it should be done by local businesses as well. Just my opinion.

Leave a Reply