Groupon sells local merchants with an offer that's easy to say "yes" to

Groupon is a stand out in a very difficult and competitive market: mobile local search. The company has earned its lofty valuation with its keen ability to find, sell and retain local merchants ahead of competitors. They do so with an offer to local merchants that is easy to understand, is time sensitive and easy to say "yes" to.

This week’s Businessweek ran a piece on Groupon vs OpenTable (with mentions of Yelp). Businessweek rightly asserts that Groupon earns its lofty valuation because of its sales efforts and proposes that the company’s ability to acquire local advertisers is its competitive advantage.

Groupon raised $135M in April - a significant venture round which valued the company at $1.35B. Backed with this war chest, the company has added hundreds to its salesforce and these folks are selling local merchants with great success. The company is also reaching consumers at a blinding pace and has nearly caught up to Yelp in consumer reach.

Yes, it’s impressive that the company reaches 8M deal-seeking consumers and has tapped viral word-of-mouth marketing, but they give away $50 for $25 and still spend heavily on Google and Facebook to do it.

Let's look at some of the numbers: Businessweek reports that Groupon now has approx 3200 employees with half (1600) in sales. I assume this is an error and that the company intended to report 1600 employees with 800 in sales. Crunchbase reports 1000 total employees.

Assuming 800 in sales and 230 cities served, the company averages 3.5 sales resources per city. The company's model is to sell one Groupon per day per city. That means each sales rep is selling – on average - 2 per week.

As a comparison to the analysts' estimate of $1.35B for the privately held Groupon, rumors swirl that Yelp turned down $550M from Google earlier this year and received an offer of $750M from Yahoo. While Businessweek reports 17M Groupon users, Compete has Groupon and Yelp fairly close (10M uniques for Yelp, and 8M for Groupon) Using the Compete numbers, Yelp is valued at $75 per unique user compared to Groupon's ~$170 per unique user.

If you believe the numbers, this is a significant premium for Groupon's ability to find, sell and retain local merchants.

Sophisticated Call Analysis will Help Advance Mobile Local Search – Including Monetizing Pay Per Call Leads

With Google's new third-party AdWords requirements adding transparency to AdWords resellers, there will be exciting differentiation among SEMs and mobile local search agencies. AdWords resellers will rapidly innovate and focus on lead conversion in order to differentiate themselves.

Sophisticated phone call analysis / call transcription is an example of this innovation and will help advance mobile local search – including monetizing pay per call leads.

Over at Screenwerk, Greg Sterling commented on how call transcription is driving pay per call:

“Stepping back, what’s clear is that the world of call measurement and analytics is getting much more sophisticated very quickly. These call analytics and data mining capabilities offer a range of benefits from SEM campaign optimization to operations and customer service. And pure “pay per call” services that are based entirely on call duration aren’t going to be competitive for very much longer.”

I agree with Greg that transcription has a role in the call analytics tool kit. However, despite the current buzz around this topic, call transcription is of limited use as a positive qualifier for a pay per call leads delivered to local merchants. Here's why:

First, let me address dirty calls. If the call measurement vendor does not have sophisticated filtering in place wrong number calls will obviously be bad leads for the merchant. I agree with Greg that call duration alone is not enough. But dirty calls rarely go over 45-60 seconds. Transcription can help identify dirty calls, but in this case its valuable as a method to eliminate the pay per call lead.

Next, let me discuss poor customer service by the merchant. If the advertiser-generated pay per call leads repeatedly result in unanswered calls, busy calls, or IVR or machine answered calls, these leads can be scored using transcription. These are not poor quality leads delivered by the media company, rather potentially good leads delivered to the wrong advertiser. As difficult as it may be to turn away an advertiser, the consumer is not served by an unresponsive merchant. And unresponsive merchants will ultimately churn as they fail to convert many of their leads. Transcription can help identify IVRs and answering machines, but again in this case its valuable as a method to eliminate the pay per call lead.

In the final example, the consumer has dialed correctly and the merchant eagerly answers the call. The parties speak. The caller asks questions: “do you…”. The merchant answers yes or no. Call duration will be an indicator of lead quality.

FastCall411 uses transcription to help identify wrong number calls, answering machines, IVRs and miscategorized merchants (lots of “no” answers). We use transcription to eliminate the lead, but not to positively score the lead. Transcription helps FastCall411 identify merchants who are underperforming (generally not responsive to calling consumers). We equip clients with the analytics to demote underperforming merchants and promote higher performing merchants. Doing so funnels more quality leads to the higher performing merchants. Does the pay per call provider have to transcribe BMW three times in the call to charge for the lead? Pay per call may have great promise, but not if leads are held to this standard.

When the mobile local directory delivers a warm consumer, and the merchant engages that consumer, its up to the merchant to close the sale.

FastCall411 develops the sophisticated tools – including call transcription and other analytics - to identify high performing merchants. These merchants provide the best service to consumers and are the best pay per call prospects.

FastCall411 "Hot Leads" Offers Mobile Local Search Directory Companies a Better Way to Find Merchants Who Will Advertise

Real-time, Call Analytics Enable Mobile Local Directories to Laser-Target Their Local Advertising Sales Efforts


For mobile local search directories, the challenge is two-fold: finding consumers to use it and simultaneously finding merchants to advertise.

“Hot Leads” is a very exciting call tracking program that helps directories laser-target their “hottest” merchants. With the right merchants listed in the mobile local directory, serving customers becomes much better.

Hot Leads, is similar to what management guru Peter Drucker advises:

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

FastCall411 helps directories know merchants that intimately. We track and analyze information about local merchants, help weed-out merchants who don’t answer calls, who keep people on hold, or who generally do not get and give value to consumers calling the business to schedule an appointment or with a other questions.

FastCall411 helps mobile local search directories define which merchants are Hot Leads and conversely which local merchants are cold, or unqualified:

• Hot Leads for the directory’s sales staff, because the merchants know how to turn a consumer call into a sale (a HOT advertising prospect, since they know the value delivered by the publisher)
  
• Cold or unqualified as good prospects to buy advertising in the directory because the merchant doesn’t answer their phone or frequently drops calls (a COLD advertising prospect since these merchants generally feel that 'this stuff doesn't work')”
  

For the first time, FastCall411 brings real-time, phone call analytics to mobile, local search – benefitting users, local merchants and FastCall411’s mobile local directory partners.

FastCall411 uses patent-pending phone call analytics to assign a quality of customer service score to service-oriented local merchants listed in local and vertical search directories. Our quality score enables FastCall411 to predict which local merchants are available to provide the best service to users. The highest scoring local merchants are also the best advertising prospects for FastCall411 clients. These are the hot leads for local search advertising sales. Everybody wins: the users, the merchant and the publisher.”

In a recent case study FastCall411 found that nearly 50% of the merchants were receiving 90% of the consumers’ phone calls. Eliminate the bottom 50% of the merchants who receive almost no calls and you’ve doubled your users’ chances of a positive experience when calling a local service business. You’ve also doubled your sales teams’ chances of finding a hot advertising prospect. FastCall411 data provides clear, actionable insight into our client’s best performers.

Further, FastCall411 applies near-real time analytics – including call transcription – to identify customer service issues for our clients. Businesses with repeat unanswered calls; repeat busy or repeated calls going to answering machines are under-performers. For many reasons, these businesses are not available to service our clients’ users. If the business is identified as miscategorized, out of business, or otherwise not relevant to the directory and user, FastCall411 flags these merchants for removal from the search results.

The top-performing merchants – the Hot Leads – are delivered as a dynamic sales list updated in real-time in Salesforce.com or another CRM application. Nowhere else is this real-time quality of service scoring and targeting available within mobile local search.

Announcing FastCall Networks - Niche mobile local directories powered by innovative voice applications

FastCall411 -- targeting the $200+ billion local search market with innovative and disruptive voice 2.0 applications -- is preparing to launch a groundbreaking network of mobile local directories. Each targeting a specific consumer need, and launched with an industry partner, the niche directories will be populated with dynamic pools of "Verified as Available" local service providers. The FastCall Network directories offer strategic partners a turn-key mobile local search directory.

The first FastCall Network directory is FindATow.

Consumers benefit from the FastCall Network directories with fast and efficient local search connections. For merchants, voice 2.0 applications and real time phone call analytics drive more customers at the point of purchase. And for partners, satisfied consumers and merchants equals higher advertising yield.

With a fresh, bottom-up approach, innovative voice 2.0 applications connect consumers - by phone, email and SMS - to relevant local service providers available to satisfy consumers' mobile local search requests. FastCall411 analyzes phone call answer rates, consumer reviews and other consumer satisfaction criteria. The FastCall Network is also the first and only mobile local search directory to broadly introduce availability into local search. Not only will we find the specific local merchant specialist (i.e. tankless hot water heaters, divorce lawyers, motor scooters) but we will find specialists that are available, ready and willing to serve the consumer.

As consumer demand and merchant supply are matched in near real time using FastCall411's innovative voice applications and phone call analytics, FastCall Network directories will achieve a near 100 percent success rate in knowing which merchants are active and eager for leads.

Hot Leads and Fast Call Back, our automated local advertiser acquisition applications, drive highly targeted and efficient advertiser acquisition. The pitch to advertisers is simple and scalable: Pay a fee to continue to receive “hot,” valuable phone leads from our mobile local search directories and partners.

To date, the deficits in mobile local search have lead to a poor experience for the consumer, inefficient lead generation for the merchant and ineffective advertiser acquisition for the mobile local directory. Taken together, efforts to monetize lead generation to the local merchant have been a disappointment.

The challenges begin with relevance and availability - the missing links in local search. Searching consumers suffer with out-of-date, inaccurate and poorly categorized local merchant listings. Subcategories represent consumers' actual intent but they get lost in the overly broad, yellow page-based local search taxonomy. And availability? Consumers have no indication if local merchants are available – or even still in business. Merchants are poorly served with too few and unfiltered leads and little control over or visibility into the source of their leads.

And while I estimate that hundreds of millions of calls originate monthly from local search queries, as many as half of these local mobile search calls will not connect to the local merchant for many reasons including those stated above. Redirecting or recapturing those lost calls is a huge lead generation opportunity. The hundreds of millions of phone calls originating from mobile local search represent an invaluable source of untapped analytics, a super efficient marketing channel, and lay the groundwork for unsurpassed user reviews.

Fast Call Back - The easiest way mobile local directories will ever have to automate merchant acquisition

I just posted a demo of Fast Call Back - The easiest way mobile local directories will ever have to automate their sales process:

Call: 323-405-7948 (as a consumer) and listen to the message...

1. Receive an automated call back (as a merchant)
2. Press 0 for sales (connects to my office); 1 to rcv info by email; 2 to rcv info by SMS
3. Close the sale!

As soon as the consumers call is over, our automated FAST CALL BACK, places a call to that same merchant. This is the easiest way mobile local directories will ever have to automate their sales process.

The directory has just shown the merchant how effective the directory is with the consumer call. Now they can conveniently get information by live sales, email or SMS.

It's simple. It's fast. It's effective.

Want to test Fast Call Back using a PBX or blocked caller ID? Go to Fast Call Back and use the click to call demo. In a live application FastCall411 is always able to call the merchant using the merchant's phone number. This 323-405-7948 demo relies on your caller ID.

New FastCall411 Feature: Transcription

FastCall41 uses speech to text transcription to transcribe voice mails and other spoken conversations. Transcriptions can be sent via SMS, email, available via API, or integrated into Salesforce.com.

FastCall411 utilizes transcription in our outbound automated calls to identify if an IVR is present on a merchant’s phone. This is important because when calls are branded (i.e: “this a call from …”) a live person must answer to hear the branding. Further, FastCall411 research indicates that consumer’s prefer merchants who are available and who answer their phone.

FastCall411 also leverages transcription on our Fast Call Back application. In the Fast Call Back application, we automatically call back non-advertising merchants after a consumer’s inbound call. When combined with branding, the idea is that the merchant:

1) received the call;
2) heard the branding and
3) can respond for more information

Fast Call Back enables merchants to leave their email address to receive information about our clients' advertising programs.

To try out transcription, send yourself a call and chose option #2 to receive information by email. We will email you the transcription and additional information of FastCall411.

http://fastcall411.com/fastcallback

"Success Breeds Success" - Peter Drucker

Peter Drucker famously said: "Success breeds success".

In the sample above, the top 46% of merchants who received 90% of the phone calls from searching consumers answer their phones, engage and serve the consumer. FastCall411 call analytics helps partners identify merchants that are open for business and generally providing quality service to their consumers.

With FastCall411, your mobile local directory will find the merchants who are a success serving their consumers and your local media sales efforts will find success selling these merchants. These are the Hot Leads that we deliver to our clients to laser-focus their sales efforts.

Voice: Caring and Nurturing or Low and Dominant?

Very Interesting Article on Male Vs Female Voice in Voice Applications from Speech Tech Magazine:

Are Consumers More Responsive to Male or Female Voices?

This is What a Bad Call Looks Like

I read a press release yesterday that claimed 10-20% of (measured) calls to local search ads are telemarketers. Spam calls, of course, are a bad experience for merchants. One flag is short call length - as merchants hang up on telemarketers.

But what about the 2 minute, 40 second call? Usually a great experience for the caller and merchant, right?

Not when it looks like this:




That's 2 minutes and 30 seconds of on-hold time, then a hang up by the caller.

FastCall411 insures the success of our client's PPCall campaigns by optimizing the quality of leads delivered to merchants. We identify spam calls with a patent-pending spam call filter. Beyond spam filtering, we also optimize the quality of the merchants delivered to the caller.

Rightfully so, merchants should not pay for spam calls. But many merchants also don't want to pay for the call above - even though it was the merchant's poor experience that prevented this call from becoming a sale. In thier minds they did not convert the quality leads into sales. To them, these calls are no different than spam calls. So it's no wonder that merchants delivering this poor experience to their callers churn out of the adverting campaign.

FastCall411 solves this problems for our clients by identifying their best performing merchants: Merchants who deliver a better quality of service to the caller, and are better PPCall / paid search clients.

Merchants give credit for calls received, not just calls delivered.

FastCall411 Delivers "Hot Leads" to RepairPal.com

FastCall411 “Hot Leads” enables RepairPal to target their “hottest” auto repair shop advertisers. FastCall411 assigns virtual numbers to auto repair shops in a series of trial campaigns. We then track calls from consumers searching and contacting the shops; score the calls and "pop" leads to RepairPal's inside sales reps - all inside Salesforce. With FastCall411, RepairPal knows which repair shops to target at just the right time.

Andrew Shotland is No Leaking Bucket

Its always good to connect with Andrew Shotland at Loc@l SEO Guide. He wrote a great review of ReachLocal, Yext, Yodle, ect. and the difficulty in keeping merchants signed up after they've been acquired. I agree - within reason - you can't please everyone in a volume business. Acquired merchants may not always have their lead generation expectations met.

The churn problem can't be explained away as overly aggressive sales by the local search industry. There is a supply and demand problem within local search: Consumer demand doesn't always equal merchant supply. The local search marketing cos (Reach, Yodle, Yext, etc) do a fine job at acquisition, but without prior insight into consumer demand for that particular business, lead delivery to the merchant is going to be spotty. Thus local marketers deal with merchant churn. I previously called this problem a leaking bucket and it is.

With the VC activity in this space - there are still many that are bullish on this business model. WebVisible has another $20M to put toward solving this problem.

FastCall411 also has a solution with HotLeads! We solve the demand and churn problems for our clients by first identifying consumer demand, teasing the merchant with a few free trial consumer leads, then offering a targeted, precise value prop to the merchant: "we've proven we can deliver demand - just say yes and we will sign you up."

BTW, Andrew also wrote an interesting post on MerchantCircle.

Fix the Leaking Bucket and Increase Local Search Sales

The other day my friend and industry luminary, Dick Larkin posted on Facebook that his business is picking up. Calls to HomePage Directories’ 300 metered lines were double the volume from this time last year.

The term “metered lines” is a yellow pages throw back. We also use call tracking or call measurement, though I don’t really like any of these terms. The assumption is that the local search industry, including yellow pages is metering ROI to the advertiser.

Virtual Numbers (the term I use) can do so much more. Followers of FastCall411 know that I believe there is a significant opportunity for innovation in the “calls to local merchants” space.

For example: our IVR application, TryAnother, offers a call redirection to a 2nd seller if the first vendor is not available, or if the caller wants to keep shopping after the first call (we launched this at DEMO).

If the phone rings and the merchant does not answer, the lead was delivered but not received. And merchants only give credit for leads received. The bigger picture here is not just metering ROI to the advertiser, but metering and improving the experience to the consumer.

When a merchant doesn’t answer a consumer’s call they are falling short on their “quality of service”. I don’t need a Yelp review for that – if I can’t speak to the merchant, he can’t answer my questions. This customer service issue is a leaking bucket for online local services. FastCall411’s metered lines / call tracking / measurement / virtual numbers – whichever term we use - not only prove ROI, but improve the consumer experience by matching ready buyers dynamically with available sellers.

Further, FastCall411 identifies merchants who don’t answer their phones – your cold sales leads. We use Virtual Numbers to find and eliminate your cold leads so that we can focus your sales efforts on the warm pipeline.

FastCall411 is seizing this opportunity for innovation with Voice 2.0 applications that take phone calls initiated from mobile local search and classifieds to the next level with consumer reviews, merchant acquisition and much more.

David Jones joins FastCall411 as CTO

David Jones is joining FastCall411 as CTO. David will help us build innovative web telephony applications to link consumers with merchants in the local search space, in combination with advanced call analytics to drive increased sales. David is a rock star technologist with a PhD in Computer Science form Stanford.

Find the Good Eggs and Find Your Best Advertiser Prospects

FastCall411's customer service studies reveal that often 50% or more calls to local merchants fail to result in a meaningful interaction with the called merchant. Better service drives performance marketing. The Good Eggs who serve their customers win as interactive mkting takes over from traditional media.

Focus your sales efforts on the 50% of your prospects that are Good Eggs and find your best advertiser prospects. This doubles your sales effectiveness.

Jack n Jill Went Up the Hill and Came Down w ~4700 Groupons!

2000 3500 4674 new customers! What if they eat an average of 2 times a year? And each tell 2 friends? These Groupon subscribers are plugged-in, early adopters. Jack 'n Jill would be two smart kiddos if they capture the email addresses, became Facebook fans, Twitter followers, etc. of all the Grouponers and encourage all to write reviews. What an amazing customer acquisition play for Jack 'n Jill when they think of the lifetime value of these clients. Well done!

MerchantCircleAnswers: Active and Engaged

The other day I received an email announcing MerchantCircleAnswers. To give the new service a try, I posted a tax question that I had recently asked my own accountant. As of today, I have received 15 well informed, thorough answers from CPAs around the country and a few near me in Los Angeles.

The result: MerchantCircle’s wisdom of the crowd outperformed the advice from my own accountant.

MerchantCircle, who just announced that they've signed their one-millionth merchant to their social networking platform for small businesses, clearly has a very active and engaged audience of small business owners.

So many companies have tried to crack local search as the ~$150 billion local media market continues to aggressively move to online / interactive media. And so many have failed.

Hat’s off to CEO Ben Smith and the MerchantCircle team on this accomplishment. While the one million merchant mark is impressive, 15 great answers to a very specific small business question in so short a time is even more impressive. It proves merchants are active and engaged.

Beverly Hills-based TeleSign Innovates with SMS / Phone Verification

The two-factor SMS / phone verification is an efficient way for cloud-based applications to offer an additional level of security beyond a CAPTCHA. Here's the story...

Become a Selling Machine and Not an Inefficient Dialer Leaving Long Incoherent Voice Mails

I just received a call from a local search sales rep. Can't tell you the name of the company because it was inaudible. You have to listen to this message:

MP3 of the message

Goog Voice Transcription:

Hi, My name is Keith, In Name info to win 91886, extension 245 small business. I think that's by more than 658 billion dollars on Internet Marketing Services last year. This band is expected to go buy a more than 2 billion dollars in next 5 years maximize the ship sure David skip and that there'd and that allows you to view the mafia business. My name is Megan Klein keeping all but I think or so. Explain this 12 076 or website management long too many pages. Email Marketing Bay, Public Management. All, in, one. Unbigoted to. I would like to show you a demo food and then have a center for the free drive. Google have business. Please call me Cape, IN 91402 IN 91886, extension 24 flight to see more info please. Is. It's good to know if those dot com. Thank you. Have a nice day.

What Keith did wrong:

1) The company should record a professional answering machine message and let Keith leave this when he hits a machine.

** The FastCall411 dialer - standalone web app, or integrated into Salesforce.com - automates this for Keith

2) Keith should always leave his email on the message. Let the called party respond in their preferred method of communication.

** FastCall411 offers an option for the called party to redial and leave their email address on a voicemail. We then transcribe the email address and subscribe the party to receive addtl info. The process is automated and efficient.

With FastCall411 Keith would become a selling machine and not an inefficient dialer leaving long incoherent voice mails.

This is Customer Relationship Management?

Yesterday an ad for a Salesforce integrator grabbed my attention in my Google apps-powered FastCall411 email.* I called the number on the landing page and hit an answering machine. So I used the web to lead form to submit an inquiry (a standard Salesforce feature) and received a page error on submit. The company did, however, send me an email confirmation saying thanks for the inquiry, please feel free to call. But they didn't provide a phone number in the email.

Hello? Isn't that the reason I completed the inquiry form? I wanted you to call me? Otherwise, I would have just called you. (Oh I did that.)

The company never called back either as a result of my voice mail or web lead.

Wow. All this from a company who advertised they were experts in customer relationship management. Why spend money in lead generation if your company has no resources to manage those leads?

*I've been heads down on an integration with Salesforce.com (we will be provisioning virtual numbers to local merchant and reporting the call details within Salesforce).