According to recent reports, local SEM resellers targeting small and medium-sized businesses (SMBs) face steep challenges stemming from high advertiser churn rates. While SMBs have lagged behind
consumer Internet adoption rates, they stand to gain from the Internet's ready-to-buy consumers and their billions in ad spending, providing a vast opportunity that has lured SEM providers of all
sizes to try to get a piece of the action. However, many of the SMBs pursuing local SEM cancel their agreements very quickly - sometimes within 90 days or less -- because they do not see value. SEM
done right is a proven tool, so what's the real issue: Are these companies evaluating the right metrics? Have they been educated on what to look for?
Online advertising is far more
complex than purchasing traditional media. Yet business owners with limited time and marketing experience are getting three to five calls a week - sometimes more - from enthusiastic and talented
sales folks selling local SEM. Once a merchant signs a contract, which typically allows cancellation after a short period, the SMB is left alone to evaluate the success of the program. All of this has
set a precedent for failure and frustration all around.
Local SEM resellers are driven by volume as SMB budgets are low according to advertising standards, with the majority spending hundreds,
not thousands, a month. So, the general focus is on selling not servicing. Combine that with short term or "cancel anytime" contracts, ambiguous results and calls from competitive providers
with "a better solution at a lower price" and it is the perfect storm for churn.
In addition to an increased focus on retention and longer contract periods, local SEM resellers must
focus on performance. Many SMBs have no concept of what a click means, so business owners struggle to see the value in click-driven local SEM programs.
What SMBs truly want lies beyond clicks:
calls, coupons, email inquiries or in-store visits: tangible consumer actions that can be tracked. These performance metrics are the bread and butter for SMBs. Talk to any shop owner and most will
tell you that if they can have direct contact with a lead they can convert them to a sale. It's not closing the sale that SMBs need help with, it is getting the warm leads. Most SMBs can't do
a whole lot with clicks except wonder how they got roped into a program they don't understand in the first place.
To use performance-driven metrics more effectively, local SEMs must talk
more to clients and better understand the merchant's business drivers so they can offer the best solution for their needs. If it is calls the SMBs want, the local SEM has to understand what makes
a good call, what type of information the SMB would like to have about a caller: name, address, maybe a recording of the call. Same goes for an email or coupon program. This dialogue helps invest the
SMB in the agreement and enables conversations about expectations. Talking about expectations is what helps maintain the relationship.
Shifting the focus of local SEM from clicks and
impressions to a range of more concrete consumer actions means SMBs will better understand the investment, as there is a clear definition of value in terms they understand. Once the SMB is invested,
the local SEM reseller has a better opportunity to use that value to build a relationship and, ultimately, a stronger and sustainable business.