Niche-specific directory, capped at 100 businesses total & max. 1 per town - PAID Traffic -Feedback?

by krzysiek

Posted: 11 years ago 9 replies

OFFLINE MARKETING

Sorry about the rather confusing title.

I've got an idea and I want to share it with WF to see if you can help me better the idea, or perhaps uncover some potential problems / objections that I have not thought of.

I am thinking of starting a niche-specific directory in a specific state. Instead of jamming as many businesses in as I can, I intend to focus on working with a capped membership base of 100 businesses (in that niche).

I would also like to have a maximum of 1 business per suburb/town/locality. This would ensure that the 100 businesses were somewhat spread among the state, and not having too many in one spot.

The idea is to work with 100 businesses (of which there are thousands in the state) and be more of an exclusive directory for their business type.

I would bill them somewhere around $200-$400 per month and much of that (especially at the start) would be reinvested into online advertising (predominantly) like Google PPC, FB PPC, SEO and also some offline advertising like Radio, paper, mailings.

What do you guys think about an idea like this?

The absolute biggest objection I believe would be that since it is a new directory, there are no stats to back it up. I am hoping that by being a niche specific, exclusive 100 member directory that is heavily reinvesting into paid ads - this objection could be handled.

But are there other things I should be aware of here?

#100 #businesses #capped #directory #feedback #max #nichespecific #paid #total #town #traffic

RockNRolla 11 years ago

Hi krzysiek,

I've never actually used this business model before but I have long thought about it and always wanted to give it a try. I'm in no position to say it will work or not since I've not seen your site or how you plan to package and market it etc. However, my first reaction was that is getting businesses to pay $200-$400 a month for a directory realistic? Have you had experience doing this before?
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- krzysiek 11 years ago
  
  Thanks for your reply.
  
  I have not had any experience selling directory listings. But I know yellow pages here in Australia charges around $1100 per month for a premium online advert, which generates about 10 to 15 calls a month.
  
  Yellow pages has thousands and thousands of businesses, not just 100 and they charge a lot more.
  
  I think as long as the value is communicated properly it should be possible to close.
  
  Unlike yellow pages or other similar directories, you're dealing with only one niche, only 100 businesses and only 1 per town/suburb/area.
  
  That, and coupled with a monthly advertising spend of say $25,000 to $30,000 (at least initially) should generate the 100 businesses a decent return. That is how I see it and I think if communicated properly, it could work.
  
  Selling will be a hard part but the design and method behind the directory is there to really try and benefit the 100 members, rather than trying to help hundreds or thousands of businesses. It's more like an exclusive directory.
  
  Anyway, just a thought at this stage. I need some money so for now I'm cold calling and selling websites. But this is something I'd like to do.
  
  My concern is whether I have a price that is too low. For some niches $200 to $300 may not be much and if they paid more I could pay for more advertising (not like I just pocket the rest) but finding the sweet spot will need some thinking.
  
  Thanks
  
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shockwave 11 years ago

I think this sounds good in theory, but probably won't fly too well - and here's why: Put yourself in the head of the prospective business owner you are going to call upon to spend their money in your directory.....

1. What you are offering is advertising. To a business owner that translates to "expense".

2. Your advertising is not pay-for-performance. So, as a business owner I have to try to guess where my ROI is going to come from. I want a guaranteed amount of calls per month or to only to pay per call. I don't want my name just showing up in yet another online directory. I want to know that if I spend more of my "hard earned" money, that it's going to show some RESULTS! (calls, emails, sales - take your pick).

3. Show me how YOUR online directory is significantly different in a way that's going to give me MORE Calls or MORE Profitability - that's all I care about. Otherwise, I'm lazy and/or not willing to change. Why should I go through the hassle of trying something new if there's no real benefit?

......You see how a business owner thinks? Limited Time and Limited Money. You need to show them a SIGNIFICANT benefit to THEM, it they spend their money with you. Otherwise, your only other play is to convince them they will be taking on less risk if they spend their money with you. (I.E. spending money in a newspaper or Valpak promotion - something that's not trackable, something that doesn't show any real ROI....etc...etc.).
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SashaLee 11 years ago

Hi there,

You might take this approach - use tracking phone numbers. Tell the advertiser if they don't get at least 5 calls per month, their listing is free. Anything over 5 calls/month they pay $200.

That takes the risk out of listing with you since they'll have a free listing if the listing doesn't perform.

All the best,

Sasha.
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DaniMc

11 years ago

I think you have a winner here - with a few tweaks maybe.

What if you created an effective, well converting landing page for each person in the directory. They get their own custom designed page.

For the $300/monthly fee, you drive X amount of traffic to the page via PPC advertising. Each page gets its own tracking number and web form so you know exactly how many contacts are being made.

The goal is to upsell them into higher levels of spending so you can drive even more traffic via PPC.

If you do something like that, your business model isn't static - you can charge ever higher amounts as you prove you can bring in business.

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krzysiek

11 years ago

Originally Posted by shockwave

I think this sounds good in theory, but probably won't fly too well - and here's why: Put yourself in the head of the prospective business owner you are going to call upon to spend their money in your directory.....

1. What you are offering is advertising. To a business owner that translates to "expense".

2. Your advertising is not pay-for-performance. So, as a business owner I have to try to guess where my ROI is going to come from. I want a guaranteed amount of calls per month or to only to pay per call. I don't want my name just showing up in yet another online directory. I want to know that if I spend more of my "hard earned" money, that it's going to show some RESULTS! (calls, emails, sales - take your pick).

3. Show me how YOUR online directory is significantly different in a way that's going to give me MORE Calls or MORE Profitability - that's all I care about. Otherwise, I'm lazy and/or not willing to change. Why should I go through the hassle of trying something new if there's no real benefit?

......You see how a business owner thinks? Limited Time and Limited Money. You need to show them a SIGNIFICANT benefit to THEM, it they spend their money with you. Otherwise, your only other play is to convince them they will be taking on less risk if they spend their money with you. (I.E. spending money in a newspaper or Valpak promotion - something that's not trackable, something that doesn't show any real ROI....etc...etc.).

Maybe I didn't explain the idea very well.

Regarding #1, yes it is advertising and there really is no other way of putting it. But to say that it won't work because businesses don't buy in to advertising I think is a little too strong. Plenty of businesses spend money on advertising?

#2 is correct. It is not pay per performance, but again that does not mean business owners automatically say no. I can see how they would prefer a pay per performance advertising, but the reality is most advertising small businesses do is not based on performance. Sure, there might be some stats to go along with any advertising they buy into - but how many advertising mediums for small businesses have you come across that operate on a performance basis alone?

#3 the underlying concept here IS in fact different to whatever directory they may currently be a part of. I have only come across very few niche specific directories here, most of which do not look like they advertise at all.

The difference is that this is a niche specific, state-wide directory with a capped membership and a further cap at 1 business per suburb.

I completely understand that they will want to see stats or figures. I know it would be a tough sell. But, with thousands of businesses in any niche in the state, you only need 100 to 'get it'. Maybe it is far fetched, but I do think it is possible. Will not be easy. A bit of research into marketing and you will be able to have a good approximation as to how many visitors the website will get, and with a reasonable assumption of conversion for visitor flow you could probably also deduce a reasonable amount of leads per month.

The points you raise, #1 #2 and #3 I can and do see from your perspective. But I think it is not correct to say all business owners follow that line of thinking. To me this is a genuinely good opportunity for businesses owners - I guess my explanation here has not been very good at selling the idea but when comparing to other directory websites that are very cluttered with tens of thousands of listings, this seems to be a better alternative (if we're talking about actually being able to deliver them leads).

Originally Posted by SashaLee

Hi there,

You might take this approach - use tracking phone numbers. Tell the advertiser if they don't get at least 5 calls per month, their listing is free. Anything over 5 calls/month they pay $200.

That takes the risk out of listing with you since they'll have a free listing if the listing doesn't perform.

All the best,

Sasha.

Tracking phone numbers would be very easy to implement and very affordable. That would certainly not be a problem and would probably be a good way to get them on board.

However, I would not be able to offer any type of guarantee like you have stated simply because the majority of the revenue I receive from the 100 client base would be invested into marketing. While I would fully expect for them to get that many leads with that much money put in to marketing the site, ultimately I would not be able to afford paying $20-$30K/month out of my own pocket.

Originally Posted by Dan McCoy

That is indeed a great idea. I have to think a bit more about what you've said. It has given me a slightly different perspective on things. I will be exploring your suggestion more!

Thanks
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shockwave

11 years ago

Originally Posted by krzysiek

Perhaps I should apologize for my overly cynical position as I do lead generation (so I'm biased) - and expected to perform. No wait....I take that back, no apologies dammit!!!

Anyway, I'm not here to say it CAN'T or WON'T work, but I still think you're putting yourself on the pain-train.

Yes, businesses buy advertising. And yes, some buy a lot of worthless advertising. Some buy it just for branding and don't expect any sort of ROI. But usually those are businesses that have deep pockets.

It might indeed be a "niche" directory, which makes it different. I'm sure someone will find it interesting. But at the end of the day, don't you think that business owner is going to want to see some results?

....that's all I'm saying - focus on the results you will bring them, not on the new concept you're bringing to them....and it'll make your sale process a lot easier.

It could be a good idea, but I think you're gonna have to roll some performance metric in there somehow to really make yourself stand out above the crowd.

Good Luck!
- Shockwave

Thanks
2 replies

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jorchav

11 years ago

Originally Posted by shockwave

Perhaps I should apologize for my overly cynical position as I do lead generation (so I'm biased) - and expected to perform. No wait....I take that back, no apologies dammit!!!

Anyway, I'm not here to say it CAN'T or WON'T work, but I still think you're putting yourself on the pain-train.

Yes, businesses buy advertising. And yes, some buy a lot of worthless advertising. Some buy it just for branding and don't expect any sort of ROI. But usually those are businesses that have deep pockets.

It might indeed be a "niche" directory, which makes it different. I'm sure someone will find it interesting. But at the end of the day, don't you think that business owner is going to want to see some results?

....that's all I'm saying - focus on the results you will bring them, not on the new concept you're bringing to them....and it'll make your sale process a lot easier.

I could be a good idea, but I think you're gonna have to roll some performance metric in there somehow to really make yourself stand out above the crowd.

Good Luck!
- Shockwave

Thanks

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jorchav

11 years ago

Originally Posted by shockwave

Perhaps I should apologize for my overly cynical position as I do lead generation (so I'm biased) - and expected to perform. No wait....I take that back, no apologies dammit!!!

Anyway, I'm not here to say it CAN'T or WON'T work, but I still think you're putting yourself on the pain-train.

Yes, businesses buy advertising. And yes, some buy a lot of worthless advertising. Some buy it just for branding and don't expect any sort of ROI. But usually those are businesses that have deep pockets.

It might indeed be a "niche" directory, which makes it different. I'm sure someone will find it interesting. But at the end of the day, don't you think that business owner is going to want to see some results?

....that's all I'm saying - focus on the results you will bring them, not on the new concept you're bringing to them....and it'll make your sale process a lot easier.

I could be a good idea, but I think you're gonna have to roll some performance metric in there somehow to really make yourself stand out above the crowd.

Good Luck!
- Shockwave

I agree strongly with what Shockwave is saying at the end. Businesses don't generally invest in "interesting ideas". They are in business to make a profit, and for every dollar they spend, they ask, "What's in it for me/the business/my bottom line?"

You will need to sell the benefit, and develop a convincing story of why it will be there, what it will be and how it will contribute greatly to the profitability and success of the enterprise.

You will also need a convincing story as to how what you are planning to do will likely succeed. So many new ideas start off, get a few sales, just get started and... they are burning more capital than they are generating, run out of cash, and fail.

You would be asking business owners to take a risk with you, with something new. You will need to convince them that you will make it go and succeed. And you will need more than just enthusiasm and good intentions to convince them that this idea is viable, sustainable, in short, is a winner...

There are various ways that these things could be done/arranged. You could set up and run a pilot project, to demonstrate that a plan such as the one you propose could work.

You could get a couple of larger companies to buy or commit to 6 months or a year of listing services, at a rate that would cover your overhead and costs, giving you some running room and enabling you to find and bring in lots of new clients as well.

You could find investors that would put up the seed capital to finance you for a year of for long enough to enable you to get started...

You could find a new "wrinkle" or potent technique to yield great results, and pitch this as your "secret weapon" that would enable you to do the heretofore impossible for them...!!

All you need to do is work out a business plan that takes the above factors into account and yields a workable plan/solution!!

jorchav

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Niche-specific directory, capped at 100 businesses total & max. 1 per town - PAID Traffic -Feedback?

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