There is a lot of confusion in the marketplace about what is the best way for retailers to advertise locally. And, the recent demise of WebVisible uncovers an unbelievable churn rate (percentage of customers quitting each year) that means millions of local advertising dollars were wasted on the uninformed.
On December 27, 2011 WebVisble abruptly shut its doors. They were a company that preceeded Yodle and ReachLocal in that they too sold SEM and SEO services to local retailers. To most local retailers the Internet is still a black box and they don’t know what works and what doesn’t. So when they get a phone call from an aggressive sales person, who promises the moon, they often times take a chance on spending some money expecting to get their phone to ring more often and for their site to appear higher up on Google’s search engine results page.
According to a blog post on Screenwork.com this is what was happening at WebVisible:
- There was no organic/SEO strategy to complement the paid approach
- There was no real technology for a very long time; just bodies which negatively impacted the capacity to optimize campaigns and get traffic cost-effectively
- My sources reported customer churn that was “over 300%” per year
- SMB customer service was apparently “terrible”
- Like others the company took a large chunk of the SMB ad spend off the top, leaving much less for the media buy
- The direct sales strategy “probably accelerated” WebVisible’s decline (and burn rate) but wasn’t chiefly responsible for the failure
A 300% churn rate per year means that the only reason they stayed in business as long as they did is that there were enough potential customers out there that they didn’t have to keep their current customers happy. Of course, even though they had over $37 million in investor’s money, a bad business model sooner or later goes away.
This is a very real problem for great brands that need local retailers to promote themselves and the brand. Wasting money on bad Internet marketing companies and programs often times means wasted co-op dollars and always means less effective advertising.
A story like this doesn’t even touch some of the other issues like the abuse of call-tracking numbers that does irreparable damage to a local retailer, and other nefarious programs that take advantage of all the confusion in the marketplace.
A smart brand combats this waste of money by providing an online portal that helps their dealers navigate the ever changing landscape by informing, aiding, producing and tracking local advertising efforts.
Thank goodness the technology is available today that can solve this problem.