Yellow Pages publishers
face a classic opportunity/risk scenario when dealing with local service-based
most of which are small and virtually all of which are fulfilled locally,
confront a gradual diminution of the effectiveness of Yellow Pages advertising
as references decline and advertising rates rise. Along with rising
ad rates, size and seniority systems have led to fewer, larger advertisers
dominating key directory headings. One byproduct of this trend has been
that many smaller service businesses have opted out of the directory.
service businesses, especially those that feel priced out of the print
directory, are turning to less costly but inefficient lead-generation
methods like direct-mail, door-hangers, coupon books, and door-to-door
and telephone canvassing.
This situation -
a lack of affordable and efficient lead-generation tools - has opened
up a big opportunity for online and wireless-based services that can
provide targeted, qualified leads and a low-cost per customer acquisition.
The Kelsey Group
is bullish on the local services space. We see real value in delivering
targeted leads to qualified merchants, or in redirecting resources devoted
to appointment setting to more revenue-oriented pursuits.
Yet the space faces
a shakeout. Dozens of companies have cropped up offering e-commerce
services for local service-based businesses. Only a handful of well-funded
players will gain enough momentum to survive over the long haul.
Because Yellow Pages
sales organizations focus on service-based businesses and because print
and online directories generate targeted, "need it now" look-ups, many
players in the services space have turned to Yellow Pages organizations
as their partners of choice.
For Yellow Pages
publishers, the issues are simple though the solutions aren't: Find
the right partner, make the offering easy to sell and go out and sell
it. It's also clear that Yellow Pages publishers need to live up to
their promise as the natural channel in this space. Otherwise, the surviving
local services companies will evolve into formidable competitors.