Small Business Owners Split on Perceptions of Economic Recovery

With Economic Concerns Still Paramount, Reply! Survey Reveals Largest Growth Opportunities in Advertising Services Are in Mobile; Small Businesses Favor Mitt Romney Over Barack Obama by 2 to 1 Margin

SAN RAMON, CA, Oct 17, 2012 (MARKETWIRE via COMTEX) — Reply!, the leading marketplace for locally-targeted advertisers, today issued the results of its eighth Merchant Confidence Index, a survey of local business owners across the country sharing their confidence levels about the current economy, their expectations of future revenue and their assessment of marketing services. The data shows that economic concerns are still weighing heavily on small businesses, with nearly 60 percent of respondents stating that they believe the U.S. economy was better off four years ago than it is today. With these concerns front of mind, SMB investment in many paid marketing services has stagnated, with very little growth seen in adoption of daily deals and several other paid services. However, mobile marketing is the one channel that is heating up in the small business community.

“Our data shows that American small businesses are still struggling to recover from the recession,” said Payam Zamani, CEO of Reply.com, Inc. “As a result, small business owners have turned to free social media platforms such as Facebook and Twitter as marketing vehicles. In turn, they have slowed their investment in paid marketing services such as daily deals, though there are still many opportunities for growth within certain segments of service offerings.”
Key findings include:

1. Small business owners are split on perceptions of economic recovery.
Economic concerns continue to be widespread among small business owners. Nearly 60 percent of respondents believe that the US economy was better off four years ago than it is today; only 22 percent of small business owners believe the economy is better off now, and 21 percent believe there have been no changes. Similarly, small business owners are split on their perceptions of future economic recovery. More than one-third of respondents (37 percent) believe that the economy will be better off a year from now; while 36 percent believe it will be worse and 28 percent believe the economy will remain the same.

However, there is a bright spot. Small business owners plan to do their part to stimulate the economy. More than 23 percent of small business owners plan to increase their headcount in the next six months, up from 21 percent in Q4 of 2011. Meanwhile, 50 percent plan to maintain their current headcount, while only eight percent plan to reduce their number of employees in the next six months, down from 13 percent last year.

2. SMBs slow to adopt paid marketing services, including daily deals and online reviews.
When asked what free social media platforms they use to promote their business, nearly 70 percent of respondents state they use Facebook and 33 percent are using Twitter. However, when asked which platforms they are paying for promotions, only seven percent are tapping into paid promotions on Facebook and only one percent on Twitter.

Likewise, there has been slow growth of other paid marketing services such as daily deals and review sites. Only 11 percent of respondents have run a daily deal over the last six months — the same percentage as in Q4 2011 — and only 11 percent say that it is likely they will run a daily deal in the next 3-6 months.
With regards to online reviews, while 46 percent of respondents see online reviews as helpful to their business, only 10 percent are using paid services and 90 percent have no plans to start using paid review services.

3. Mobile marketing is heating up in the small business community.
Small business owners are turning to mobile to support their business needs. Mobile marketing is on the rise with 8 percent of respondents currently purchasing mobile ads and 15 percent planning to in the next 3-6 months. Likewise, when asked how likely they are to explore building a mobile website or mobile app for their business in the next 3-6 months, 16 percent of small business owners stated that they are very likely to explore this marketing channel. Meanwhile, 17 percent state that they already have an active mobile app or website.

The survey also reveals that SMBs are more likely to use mobile services that facilitate transactions such as Square and PayPal, with 14 percent and 20 percent noting their usage, respectively. An additional 11 percent are planning to start using a mobile transaction service in the next 3-6 months.
4. SMBs unphased by recent high-profile IPOs.

While many SMBs remain pessimistic about economic recovery, these concerns have not translated into negative perceptions about recent high-profile IPOs in the social and marketing sectors. When asked about their perceptions of Facebook as a company after it went public in May, nearly 70 percent of small business owners said their opinion about the company did not change.

Likewise, when asked about their perceptions of Groupon as a company after it went public, the majority (72 percent) of small business owners stated no change to their perception.

5. Republicans have been more effective at positioning the party as supportive of small business interests.
Mitt Romney is favored 2-1 over Barack Obama as an advocate for growing small businesses in the United States. Similarly, 52 percent said Romney was better equipped to lead the US in an economic recovery, compared to 28 percent who said Obama was better equipped; meanwhile, nearly 20 percent of small business owners stated that neither candidate is equipped for the job.

There is also limited favorability for the Patient Protection and Affordable Care Act (PPACA) within the SMB community. 63 percent of respondents stated that the Act would negatively impact small businesses, while only one quarter (23 percent) said that the Act would positively impact small businesses. Only 6 percent stated that they believe there will be no impact, and 9 percent are unsure.
About the Merchant Confidence Index The Merchant Confidence Index is an annual survey conducted by MerchantCircle.com, a division of Reply.com, Inc. The Index is designed to track trends in small business sentiment over time and is derived from four key questions designed to synopsize the prevailing trends among local business owners.

This eighth Merchant Confidence Index survey was fielded online, between September 17, 2012 and September 30, 2012, and sent to a random sample of MerchantCircle’s member base of about 1.4 million local business owners. There were 3,434 total responses from local business owners across the United States. Responding businesses classified themselves as legal and home services, automotive, health and beauty, entertainment, travel and more. The survey data can be broken out by state, business type or business size (by headcount) upon request. No incentive was offered to complete the survey.
Reply.com, Inc. is not affiliated with any political party. The results of this survey in no way represent the views of the company.

About Reply.com, Inc.
Reply.com, Inc. operates the leading marketplace for locally-targeted advertisers. Reply!’s platform provides advertisers of all sizes with a simple and scalable solution for locally-targeted marketing. Reply! owns and operates many destination sites including iMotors.com, Contractors.com and MerchantCircle.com, which is the largest online network of local business owners in the nation with over 1.4 million member merchants and 17 million monthly local consumer visits. To learn more about Reply!, please visit www.reply.com.
Survey Summary
Survey

Media Contacts
Rachel Kahn
Sparkpr for Reply!
rachel@sparkpr.com
(415) 321-1881

Reply! Introduces Branded Profiles on MerchantCircle.com!

New product enables large national brands to build a robust local online presence

San Ramon, Calif. – September 13, 2012 – Reply!, Inc. today announced the launch of MerchantCircle Branded Profiles, a new product that enables large, national brands and organizations to build locally-targeted pages for their members on MerchantCircle.com, the nation’s largest online network of local business owners.
By building their locally-targeted online presence with MerchantCircle Branded Profiles, national brands offering local services can build a more robust online presence and more efficiently reach local customers. As one of the top six destinations for local searches, MerchantCircle.com can dramatically increase new customer acquisition for its members. For example, an insurance company can launch profiles for each one of their local agents, and have customer inquiries direct either to each individual agent or to a central corporate location.
“With MerchantCircle Branded Profiles, national brands have an efficient way to enhance their local presence,” said Payam Zamani, founder and CEO of Reply!, Inc. “It’s our mission to make locally-targeted marketing more profitable, targeted and scalable for advertisers of all sizes. Branded Profiles offers national brands a unique way to reach their local customers in every state and every city in the country.”
Branded Profiles offer:

• Customizable Branding: companies have the ability to control their image and messaging, so they can bring localized branding to the individual communities where their customers are located.
• Tools to communicate with consumers: brands can insert customized solutions allowing them to efficiently interact with their customers.
• Request a Quote Button: brands have the ability to direct consumers to their website or directly to their local representatives who can serve them.
• Call Tracking: merchants can drive calls into a call center or direct consumers to a local service provider via a trackable number on their Branded Profiles.

About Reply!, Inc.
Reply! Inc. operates the leading marketplace for the acquisition of locally-targeted online consumer traffic. Reply!’s platform provides advertisers of all sizes with a simple and scalable solution for locally-targeted marketing. Reply! owns and operates many destination sites including iMotors.com, Contractors.com and MerchantCircle.com, which is the largest online network of local business owners in the nation with over 1.2 million member merchants and 15 million monthly local consumer visits. To learn more about Reply!, please visit www.reply.com.
Media Contact
Rachel Kahn
Sparkpr for Reply!
rachel@sparkpr.com
(415) 321-1881

Winner of the $10,000 MerchantCircle Sweepstakes!

Today we announced that Idaho-based Bonnie Wilks is the winner of the $10,000 Spring Fling Sweepstakes, hosted by MerchantCircle, the largest online network of local business owners in the nation. MerchantCircle kicked-off the sweepstakes in February to celebrate its relaunch as a consumer destination that helps busy people solve everyday problems.

Winner Bonnie Wilks discovered that MerchantCircle was running a sweepstakes while searching online for local deals, and promptly entered. At that time, she also joined MerchantCircle’s “Neighbor” program, which enables consumers to "follow" local businesses for the latest promotions, coupons and announcements. Wilks soon found that she loved writing and reading reviews on MerchantCircle, which today has over 6 million pieces of user generated content, from ratings and reviews to photos and blogs, to help consumers find the best local businesses.

“From all of us at MerchantCircle, congratulations to Bonnie Wilks on winning the Spring Fling Sweepstakes, we are very proud to have you as part of our neighborhood,” said Paul O’Leary, GM, MerchantCircle. “We are also so grateful to all our contest entrants, and we want to thank all of them for joining the MerchantCircle community.”

MerchantCircle allows consumers to immediately connect with qualified providers in their local area, get access to deals, find expert advice and receive free competitive quotes for real-life tasks. Consumers can find providers across all business categories, including home repair and improvement; health and beauty; financial and professional services; construction and real estate services; restaurants; and many others.

The sweepstakes was sponsored by Reply! Inc., and was open to legal residents of the 50 United States and the District of Columbia who were, as of entry date, 18 years of age or older. The sweepstakes period was from February 28 to April 10 of this year only. No purchase was necessary.

Sincerely,

The MerchantCircle Team

Take Control of Your Local Listings

Our goal at MerchantCircle is to connect local shoppers with the best local merchants. We’ve worked tirelessly to make it easy for people to find great businesses that provide quality services. Our desire to connect shoppers and businesses continues even when these shoppers may be searching elsewhere on the Web. That’s why we’ve partnered with Yext to ensure that MerchantCircle members can get found regardless of where shoppers are searching.

Guaranteed Presence

Yext PowerListings allows businesses to control their local search listings across 35 search engines and directories including MerchantCircle, Yahoo! And Yelp. Not only does Yext PowerListings ensure that the name, address and phone number are correct across their network, but it also allows businesses to highlight their listings with special offers, detailed business descriptions, photos and other enhanced content.

Save Time

Business owners no longer have to individually contact and verify their listings on each search engine or directory. PowerListings users can quickly and easily make changes to all of the listings within the PowerListings dashboard.

Track Results

PowerListings gives business owners the ability to see how many times their listing showed in the search results as well as how many times their business profile was viewed. With Yext’s granular tracking and reporting businesses have complete insight and control over their local search results.

How does your business look online?

As a business owner, you might not even be aware of how your business information appears across the Internet. Yext makes it extremely easy to find out with their free business listing report. Simply enter your business information as you would like it to appear, and Yext will create a report detailing everywhere your business information is missing or inaccurate.

Yext PowerListings has already helped thousands of local businesses gain control of their local listings, and we hope it can help you!

Sincerely,

The MerchantCircle Team

MerchantCircle: Making a Difference!

It's often difficult to keep our perspective with the day-to-day demands of working in a fast-paced environment, but, sometimes we need to take a step back and remember that the work we're doing does make a difference in our members' lives.

Check out this great "behind the scenes" video starring several of our members from the Los Angeles area:

So, to our 1.2 million merchant members: we are humbled and honored to have some part in helping your businesses succeed.  Best of luck to you and your families and thank you for your support!

Sincerely,
The MerchantCircle Team

You Spoke, We Listened...and It’s Working!

As you know, we recently updated the MerchantCircle.com website experience.  It’s only been a few weeks, but we’re happy to report that consumer engagement with the site (especially merchant listing pages) is at its all-time highest level!  

This means that more consumers are finding more businesses on MerchantCircle than ever before.  Customers are spending more time on Merchant business listing pages, and they are reading and writing reviews about Merchants they love.  This has been our goal from the very beginning - connecting local Merchants directly with Neighbors who need their products and services.

The recent improvements are the direct result of Merchant feedback.  We asked what you thought, and you told us what you liked and what you wanted to see done differently.  We took what you said to heart and focused on the features and capabilities you valued the most.  

• You asked for improved search across the site - you got it!  
• Merchants didn’t really care for the anonymous reviews, so they’re gone...replaced with reviews from registered MerchantCircle Neighbors.  
• The pages are cleaner, less cluttered and it’s much easier to find what you’re looking for.  

We will continue to make improvements that make the overall MerchantCircle experience better, faster and more relevant.

In fact, on the development side, our MerchantCircle Product Development Team, the magicians behind it all, have been working their magic indeed. The team has been using a version of Agile Product Management (it's a tech thing) that allows us to push updates to the site much more often. This means that we can resolve issues faster, add features quicker and easier, and continue to improve the Merchant and Neighbor experiences as fast as we can.

Over the next several months, you can expect to see more features and new capabilities for both Merchants and Neighbors.  Here’s a short list of the stuff we’re focused on delivering in the next month or so.

• More social media features and functionality
• A new mobile app - an extension to the 4.5-star rated Merchant app
• Prominent focus on Reviews & Compliments
• Optimized search functionality making it smarter and easier to use
• Better "request a quote" functionality to reduce the time from search to transaction

If you have suggestions, questions or any other input - please join us on the MerchantCircle Forums. 

Sincerely, 
The MerchantCircle Team

The New MerchantCircle: We've Remodeled!

With the new year upon us, lots of folks start thinking about embarking on remodeling projects. Here at MerchantCircle, we spent much of last year remodeling the site, and you could say we learned a few things.  We thought we’d share our experiences with all of you out there thinking of taking on a remodeling project, no matter how big or small.  

Here’s what we learned...

It’s good to have a plan...but plans change.  Looking back, our original plan didn’t take into account the complexity of the task ahead.  As we went along, we learned a ton about the site and each other.  The biggest lesson: the only way to make real progress is to get out of the “planning” phase and into the “doing” phase.

Everything takes longer than you think.  That’s probably true with many things in life, but definitely true with remodel projects.  You don’t know what you don’t know, at least until you start tearing things down.

You’re never really “done”.  Just when you think you can’t go on a day longer...you will find yourself checking things off your “punch list”.  The initial project will get done, but the tweaking, tuning and improving never ends.  

If you’ve recently remodeled (your kitchen, a bathroom, or maybe even your business website) share your experience in the new MerchantCircle forum. 

Now for the good stuff…

The launch of the new and improved MerchantCircle is a key milestone in the integration of MerchantCircle with Reply!.  As you can probably tell from our new homepage, we’re refocusing MerchantCircle a bit to help busy people get things done – big and small – by connecting them with a network of local business owners who are eager to help.

Here’s what’s new on the site…

For consumers (we like to call them MerchantCircle Neighbors):

·      Better search experience – three search bars focused on finding merchants, answers, or deals

·      New localized category pages that includes top merchants, deals, and advice (see examples here and here for examples)

·      More prominent display of top-rated merchants

·      Integrated “request a quote” functionality on listing pages, category pages, city pages

·      Easier access to expert articles and advice

For our fantastic merchant members:

·      A completely new support section and fresh user forums 

·      Reorganized layout for claimed listing pages to drive more user engagement

·      More prominence for photos and a new Photo Viewer

·      No more anonymous reviews

·      Better promotion of content and better search through new categorizations for businesses

And we’re not even close to done…in the coming weeks, we’ll announce other exciting improvements!

Stay tuned...

Sincerely,

The MerchantCircle Team

P.S. To learn more about the new, improved MerchantCircle, we've created this handy-dandy FAQ

P.P.S. We’ve also create a whole host of “how-to” videos to keep you up to speed on the new features available to you

Q4 2011 Merchant Confidence Survey -- Full Results

Several folks have asked for the full analysis from the Q4 Merchant Confidence Index survey, so here ya go!  This presentation is chock-full of stats pertaining to small business owners' thoughts about our economy, the future of small business hiring and trends in the adoption of new marketing channels like daily deals, pay-per-lead and mobile advertising.



Enjoy!



Sincerely,

The MerchantCircle Team

MerchantCircle Q4 2011 Merchant Confidence Index

View more presentations from dswaddell

Customer Acquisition is (Still) King for Local Merchants

For many small businesses, the biggest challenge is acquiring new customers at an acceptable cost. And in 2011, we saw several new approaches to customer acquisition gain momentum: Facebook Ads and group deals.





According to our most recent Merchant Confidence Index survey of 2,500 local business owners across the U.S., while newspaper ads and direct mail – tried-and-true offline customer acquisition techniques – are still popular, with 25% and 24% of merchants using them, some 12% of merchants have offered a daily deal – up 33% compared to three months ago – and 24% bought targeted Facebook Ads.

Daily deals appear to be effective in driving customer acquisition tool for some small businesses.  According to the Merchant Confidence Index, 75% of merchants who have used daily deals in the past would do so again.  Of those who would use daily deals again, 61% of said they’d use them again because daily deals are “effective for customer acquisition.” While only 37% of merchants said the deals were “profitable”, it seems getting a new customer through the door makes daily deals worth trying again.

Local merchants are also acquiring new customers via Facebook Ads, the targeted paid ads offered by the world’s largest social network.  Some 38% of merchants said they’d use Facebook Ads again due to their effectiveness as a customer acquisition tool.  But for those who wouldn’t use Facebook Ads again, 66% said it’s because the ads did not work to acquire new customers – showing that customer acquisition is a top priority for small businesses.

Customer acquisition is so important to local merchants, the majority of respondents said they’d be willing to purchase qualified prospect information on a pay-per-lead basis. Over 60% of merchants in the financial services industry would pay for leads, while one-third of merchants in the automotive, construction, and home improvement industries would.  Look for this strategy to gain steam in 2012.

Marketing strategies that aren’t proven to bring in new customers are, unsurprisingly, not very popular with local merchants looking to grow their businesses. Mobile marketing, for example, has been slow to catch on with local merchants. Only 22% of merchants have tried mobile marketing, with 72% saying they’ve hesitated because they don’t have a good understanding of how to use it to reach potential customers.

With nearly a third of local merchants concerned about the high cost of marketing in the next year, it’s no wonder they prefer to use channels that deliver what they most need: new customers.

Sincerely,

The MerchantCircle Team

New Data on Small Business Adoption of Facebook Ads and Group Deals (Google Offers, Groupon and LivingSocial)

New marketing trends data from MerchantCircle's 7th survey of small business owners across the U.S. reveals that group deals are gaining popularity among small businesses and shows Google Offers and other niche deal providers are putting increased pressure on Groupon and LivingSocial. There’s also evidence of slowing adoption for Facebook Ads, although favorability for this new advertising medium remains strong among those who are using it.

Key insights from MerchantCircle's research include:

1. Group deals are experiencing steady growth among local merchants

• Nearly 12 percent of local merchants now report having offered a daily deal, up 33 percent since the last MerchantCircle survey in June 2011.

• About 75 percent of respondents say they would offer another deal in the future, citing its effectiveness for customer acquisition as their top reason (61 percent).  Deal profitability also appears to be on the rise: 37 percent now say solid profitability will lead them to offer another deal, up from just 24 percent in June.

• Among the 25 percent who said they wouldn’t offer another daily deal, 42 percent said it was not effective for customer acquisition, 36 percent said it was too costly and 34 percent said they lost money on the deal.

2. Cost is the most important criteria for selecting a deals provider.

• 64 percent citing cost as their top consideration when selecting a deals provider.  Local targeting (57 percent) and the ability to reach a large audience (52 percent) were the second and third-most important selection criteria.

• Businesses that plan to use Groupon in the future report that the ability to reach a large audience is equally as important to them as cost, with 62 percent citing reach and cost as key selection criteria.

3. Groupon and LivingSocial may face increased pressure from Google Offers in 2012.

• About 19 percent of local merchants who have offered a group deal have tried using Google Offers since its launch this summer, as compared to Groupon (26 percent) and LivingSocial (21 percent).  A large number of specialized deals providers have also entered the market; these services have been used by about 43 percent of local merchants who have offered a group deal.

• About 32 percent of merchants planning to use Google Offers for their next deals, as opposed to 26 percent who plan to use Groupon and 16 percent who plan to use LivingSocial.

• Google Offers enjoys the highest retention rate of all the large deals providers: 66 percent of its customers plan to use Google Offers again.  Just 41 percent of Groupon and LivingSocial customers report that they plan to use these services again.

• Before ceasing operations, Facebook Deals had been used by 22 percent of the respondents who’d offered a daily deal in the past.  More than half of these customers say they plan to use Google Offers for their next deal (53 percent).

4. Facebook Ads growth slows among local merchants.

• About 23 percent of local merchants report having tried Facebook Ads to date, which is only five percent more than six months ago.

• That being said, favorability for Facebook Ads remains strong among those who have tried them, with 62 percent saying they would use Facebook Ads again, citing ease of use (62 percent) and the ability to start and stop campaigns (55 percent) as the top reasons for continuing.

• Of the 28 percent who say they wouldn’t use Facebook Ads again, nearly two-thirds report that they didn’t acquire new customers (66 percent).  But more merchants now also cite high costs and low click-through rates as reasons not to advertise with Facebook again: 41 percent of merchants said the ads were too expensive (up from 35 percent in June) and 37 percent reported low click-through rates (up from 29 percent in June).

• While Facebook Ads growth may have slowed, general Facebook marketing continues to be extremely popular among local merchants, with 70 percent of people using the social network for marketing, up from 66 percent in June. 

A big THANK YOU to all our merchant members who participated in the survey.  Stay tuned for more insights into small business marketing in the coming days!

Sincerely,

The MerchantCircle Team

Small Business Survey: Group deals and "Pay-per-lead" poised for growth

The results from our latest installment of the Merchant Confidence Index survey are just in.  We received over 2,500 responses from our small business members and we'll be "crunching the numbers" over the next few days to share insights into: 1) small business owners' opinions of the current economy, and 2) the adoption of new marketing channels by these business owners.



As illustrated by the super-cool infographic below, newer paid marketing channels like Facebook Ads and group deals are now part of the small business marketing mix, with local pay-per-lead poised for some serious growth in the near future.



Also surprising is the quick adoption of Google Offers relative to the "big boys" in the group deal space like Groupon, Facebook Deals (no longer around) and Living Social.  Local business owners tell us that they plan to try Google Offers more than any other group buying service in the future.



Enjoy the infographic!



Sincerely,

The MerchantCircle Team

Big changes are coming (and we think you're going to like them)!

Our goal has always been to help busy people solve everyday problems.  Whether it’s helping local merchants promote their business online, or helping busy consumers get things done – we focus on connecting people with a vibrant network of local business owners who are eager to help. Our goal hasn’t changed, but the way we approach it certainly will.  In the coming weeks, we will be introducing a "beta" version of the new and improved MerchantCircle.



Most of the time, people need more than just online reviews to solve a problem.  Our network of 1.6 million local merchants makes MerchantCircle the one place to go to find trusted merchants, get great deals, find expert advice and get competitive quotes for real-life projects.  No more surfing the web for hours trying to find what you need – we have it all right here.



Here are some exciting new features being added to help both MerchantCircle Neighbors and our member merchants:



For MerchantCircle Neighbors:

• Deals - with enhanced search capabilities, promotions, coupons and offers will be easier to find


• Reviews - we're making changes to ensure that you get real reviews from people in your community


• Better search – find more relevant businesses and local advice

For our merchant members:

• Free member support - just call our US-based call center (more to come soon!) 


• New forums - same great discussions, but way faster and easier to use 


• Updated listing templates - we’ve freshened up and reorganized the look and feel of listing pages so people learn more about your business

So stay tuned – we’re excited about the new direction and we hope you like what you see.

Sincerely,

The MerchantCircle Team

AdWords Express- Did Google Get it Right?

Google is continually launching changes to its AdWords online advertising service, and it recently rolled out AdWords Express in an aim to help smaller businesses more easily create and run keyword-targeted ads on Google and Google Maps.



Many small business owners have dabbled in AdWords, only to find it costly and complex. So any move by Google to make it easier for merchants to master the complex art and science of keyword advertising is a step in the right direction. But the new AdWords Express service does not solve all of the challenges that small businesses have experienced with AdWords, including a financially-impactful lack of control and the ability to reach intentional, targeted customers.



AdWords Express does include a number of helpful features for small business users, such as a simple campaign setup and no ongoing campaign management. The promise is that business owners will not have to bid on keywords, but will instead simply provide a bit of information about their business, set a monthly budget, and let Google do the rest– setting up, running, and managing ads for the user.



The result, according to the Google AdWords Express site is the following: “When people search your area for the products or services you provide (”flowers in Dallas”, or if they’re already in Dallas, just “flowers”) an ad for your business will appear above or beside their search results. Your business will also be marked with a distinctive blue pin on Google Maps, helping it stand out to potential customers.”



But while the nuts-and-bolts of Google AdWords Express may be simple, even for non-savvy advertisers, there are disadvantages to the program. For one, targeting is based on a searcher’s IP address – which is, at best, 20 miles around a zip code and in the worst case, hundreds of miles away. Someone searching for flowers 100 miles from Dallas may get ads for florists in Dallas – not very helpful to that searcher and not very useful to the florist in Dallas, either. IP-based geo targeting is often wrong or inaccurate, and even when it is accurate, it may only reflect the location of the consumer and not where she would like to have the service rendered.



Additionally there are issues with intent and return on investment. Without a method for vetting who will see a given add, business owners could lose hundreds of marketing dollars in wasted paid traffic at the hands of casual, click-happy Internet surfers who may not represent the intended target audience or aren’t interested in the offerings presented. If Express isn’t producing the right return on investment, what does an advertiser do? They don’t know their bid and can’t optimize geography, making cancellation the only option left.



Advertisers still need to develop and optimize ad copy to maximize click rates. Remember, just because Google makes this process simple, doesn’t mean they are giving up on maximizing yield (revenue) per search.



The bottom line is that Google AdWords Express is a step in the right direction to serve the needs of the small business community, but it doesn’t go far enough to meet the needs of local merchants. The service is almost too simplistic; local businesses need robust, targeted location-based marketing, not just a one-size-fits-all approach. What Google has launched will make it easier to advertise on the site. But they’ve also just made it easier for local business owners to spend a significant amount of hard-earned money resulting in discouragement coupled with little to no ROI .

We're really proud of our CEO!

In Silicon Valley, meeting brilliant, innovative, business-minded people is as common as traffic on 101 or overhearing happy hour hot-dogging about upcoming IPO's...



But. Meeting brilliant, innovative, business-minded people who are as focused on the world around them, as they are on their portfolios is, well, not so common.



The MerchantCircle team is honored to have one of these unique individuals at our helm. Payam Zamani, CEO of Reply! Inc, is one of those charismatic Valley personalities with an incredible story of perseverance and a contagious passion for helping others. And because we know that Payam himself wouldn't self-promote, we're proud to share the news that he's a GQ Gentleman's Fund nomine for the Better Man Better World Search.



We'd love to see Payam as one of the finalists and welcome your support! Head on over to the nomination page and cast your vote. Then check out the great company he's keeping in this group of world-changers and get inspired.





Cheers!

Can Group Deals Work for Sole Proprietor Businesses?

Small businesses such as restaurants, salons, auto repair shops, and fitness centers are becoming adept at using daily deals from services such as Groupon, LivingSocial, and Facebook Deals to attract new customers, but what about sole proprietors?



According to our most recent quarterly Merchant Confidence Index survey of nearly 5,000 local business owners across the U.S., only 8% of companies with less than five employees had tried offering a daily deal.



While group deals can work for sole proprietors, it just takes a bit of legwork and a clear understanding of the risks involved. Though the costs of doing a daily can be high – with small business owners turning over up to half of all revenues on already steeply-discounted deals to Groupon or another provider – the results can be worth it, if you manage the deal correctly. Some 77% of small business owners who’ve done daily deals said they’d be likely to do another – citing things like effective customer acquisition and profitability as benefits.



One MerchantCircle sole proprietor who successfully used Groupon to build his business is SchaOn Blodgett of Psinergy, a self-proclaimed “Tech Warrior” who offers computer diagnostics, repair, and upkeep in the St. Paul, Minnesota area. He offered a $99 system optimization and cleaning for $49 on Groupon and sold 50 of them in one day. But the best news was, of those 50 buyers, 37 redeemed the coupon and 12 became repeat customers. So many of the customers were happy with the service that Psingergy believes 95% of the Groupon buyers will eventually return for more services.



Why did Psingergy’s offer work so well? The bottom line is that he used Groupon to get them in the door, but then wowed them with customer service once they redeemed.



“I wasn’t that surprised that the Groupon customers came back, because I pride myself on fantastic customer service, guaranteed work, and reasonable pricing,” said Blodgett. “I treat all of my customers like human beings and answer any questions - even ones like ‘how do I turn on my computer’ – without making the person feel stupid or that it is beneath me.”



Sole proprietors that want to offer a group deal should think before they leap – because a deal done badly can cost owners a fortune without bringing in high-quality customers. Here are some tips from Mashable to get sole proprietors started with daily deals.



1. Shop around.



Groupon and LivingSocial may be the most well-known daily deal sites, but there are now a wide range to choose from. Yelp, Facebook, and Google have all tossed their hat in the ring, as most daily newspapers. Now there are also many vertical and niche deals sites focused on certain sectors, such as Daily Gourmet for foodies, Yuupon and TripAlertz for travel, and even a deal site for dog owners: Doggyloot. There are also business-to-business deal sites like RapidBuyr. These niche daily deal sites are often the right choice for sole proprietors because they reach a targeted audience interested in particular products or services instead of just “everyone in the local area.”



2. Set time parameters.



With most group deal services, you won't have much control over when your deal hits, and this can make it tough for sole proprietors to manage a sudden surge in demand. This is a big problem for “one-person shops” as your time is your most precious resource. Taking on too many new customers or clients all at once could leave you overwhelmed and lead to unhappy customers and bad reviews. The way to solve this problem is to put time constraints on your deal when possible – spelling out a fairly short time period during which the deal can be redeemed. You can also set up your deal so the value of the discount is greater on your slowest days or during off-peak times. If your business has significant seasonality, try running deals during your slowest months.



3. Understand the costs.



Group deals don't always result in an immediate profit – and may even result in a net loss to the business.



To do the math on what a Group deal will cost you, here’s the basic formula. People only buy group deals offered at a steep discount to the regular price – let's say somewhere around 50 percent off. You then need to share revenue from the deal with your service provider, at rates as high as 50 percent or more. So if you’re offering a $200 interior design consultation for $100, and you have to pay $50 of that to your service provider, you'll end up with $50 for your $200 service. If it costs you more than $50 to provide the service, you'll lose money on the deal. In fact, the better the deal does, the more it will cost you.



Still, since your company's name gets in front of thousands of local consumers and you hopefully acquire many new repeat customers, a daily deal can be well worth the immediate “loss”.



4. Make the most of each customer visit.



According to recent Rice University study, less than 20 percent of group buyers return again to make a full-price purchase. To improve these odds, most of each new customer visit by turning on the customer service charm, offering add-ons, and giving them a reason to come back. Think about potential up-sells for people who redeem your coupon. A party planner could offer customers a $10 giftcard to an online party supply store, or a personal fitness coach could offer a discount for new patrons who book a series of sessions.



And don’t forget to stay in touch with your new customers. Ask for their email address and/or encourage people to leave reviews of your service on Yelp, MerchantCircle, and other local sites. You could also remind people to follow you on Facebook or Twitter.



As a sole proprietor, you are a one-person band. But that doesn’t mean you can’t benefit from the same group deal services that larger businesses – and even national brands – use regularly to acquire new customers. Just play it safe and set up guidelines ahead of your offer, and this could be your chance to build your customer base.

Facebook Ads: Small Businesses are Fans

Local businesses early on recognized the potential to market their products and services on Facebook. With a free Facebook page, businesses could offer special deals to customers, build an online fan base, and publish information and promotions – all for free. But local merchants are increasingly also early adopters of paid Facebook Ads.



According to our newest MerchantCircle survey of nearly 5,000 small businesses, some 94% of small business owners are aware of Facebooks Ads. Some 22% of small businesses are already using Facebook Ads, and nearly two-thirds of those who have used them would do so again. And while Facebook Ads have been lambasted for “abysmal” clickthrough rates, small businesses are finding value in the paid placements.



Why are small businesses satisfied adopters of Facebook Ads?



First, Facebook Ads are affordable – something very important to small business owners. While brands can afford to spend millions buying keywords on Google, cash-strapped small businesses must make every marketing dollar count. In a recent Inc. Magazine article, a New York-based small business owner said she gets great results buying Facebook Ads – at a cost a fraction of what it would cost to buy the same keywords on Google.



The below chart illustrates that cost-per-click of $0.67 for Facebook Ads in the “local services” category, and $0.53 in “restaurants” category. While that’s not cheap, it’s better than the $1-$2 per click small businesses can pay for competitive keywords on Google.

Secondly, small businesses are highly adept users of Facebook. They were avid early adopters of Facebook, with about 70% of local merchants using the platform to market their businesses, and may feel more comfortable taking the plunge to buy “experimental" ads than their larger business counterparts, whose marketing departments must justify every ad buy as part of a larger pre-defined budget.



Lastly, Facebook Ad are easy to use. Small business owners don’t have VPs to run their marketing programs for them. Most merchants run marketing as just one of the many hats they wear every day, and they don’t have weeks or months to master complicated advertising platforms. In the MerchantCircle survey, 67% of small business owners said that “ease of use” was the number one reason they’d use Facebook Ads again, with 65% saying they appreciated the ability to easily start and stop campaigns.



Of course, not every small business has seen successful with Facebook Ads. Of the 35% of merchants who said they would not advertise with Facebook again, nearly 70% said that the ads did not help them acquire new customers. While Facebook Ads may be easy to use and fairly affordable, if Facebook doesn’t introduce improved local targeting and other value-ads for small business advertisers that result in higher customer acquisition over the longer term, they will undoubtedly lose their luster with local merchants. After all, local business owners may be willing to experiment with different types of advertising, but, at the end of the day, they’ll only reinvest in methods that bring customers through the door.

Shotguns and Chardonnay... (In that order)

Brilliant sunshine and blazing temps provided the perfect backdrop for MerchantCircle's 3rd Annual Shotguns and Chardonnay Event, taking place yesterday afternoon at the Los Altos Rod and Gun Range.



Over 150 of the Vally's best and brightest turned out to fire off some rounds in between networking and noshing on sweet BBQ bites provided by former Google chef turned local business owner, Dontaye Ball.



Silicon Valley investors and entrepreneurs are known for being straight shooters- we had no idea how true this was! At any given moment one could turn his/her head and see exploding clays in every direction. From tech to targets, we're a well-aimed group.



As the afternoon moved from firearms to Fruit-forward, the staff at Savannah Channelle Vinyards graciously welcomed us into phase 2 of this day-long event. With sweeping views of the Valley and chilled Chardonnay in hand, we compared sunburns and start up stories.



The day wrapped with a visit from the famous Mis Anajitos taco truck and our satiated guests left with full bellies and great business ideas.



Thank you to everyone who attended for making this event such a successes!

New Data on Small Business Adoption of Facebook Ads and Group Deals (Facebook Deals, Google Offers, Groupon and LivingSocial)

New marketing trends data from MerchantCircle's 6th quarterly survey of small business owners across the U.S. reveals that Facebook Ads are gaining popularity among small businesses and provides new insights into the group deals market, including increased pressure on Groupon and LivingSocial from Facebook Deals and Google Offers.



Click here to download the full report.



Key insights from MerchantCircle's research include:



1. Facebook Ads are gaining popularity among local businesses.



• 66% of local merchants are using Facebook for marketing.



• 22% of local merchants have used Facebook Ads, and 65% would use Facebook Ads again.



• Top reasons to use again include ease of use (67%) and the ability to start and stop campaigns (65%).



2. Merchants are warming to group buying, but adoption is still slow.



• Just 9% of local merchants having offered a daily deal using a service like Groupon or LivingSocial.



• While three months ago, only 50% of merchants who had tried offering a group deal said they would do so again, 77% now say they would be willing to offer another daily deal.



• Top reasons for offering another deal include effectiveness in customer acquisition (58%), favorable deal structure (30%) and profitability of the deal (24%).



• Among those who wouldn't offer another daily deal, 42% said that it was not effective in customer acquisition, 25% said it was too costly and 24% said they lost money.



3. Small business familiarity with Facebook and Google may help them win market share from Groupon in daily deals market.



• 52% cited familiarity with Facebook and Google as a reason they might choose Facebook Deals or Google Offers over competitive daily deal offerings.



• Other reasons for choosing Facebook Deals include bigger audience size (26%) and better local targeting (21%).



• Those more likely to use Google Offers cited Google's bigger audience size (42%) and Google's brand reputation (34%) as top reasons for preferring Google.



4. Relevant Charts:

Adoption and repeat usage of Facebook Ads

Perception of Facebook Ads amongst users

Adoption and repeat usage of daily deals sites

Perception of Daily Deals sites amongst users