What I hear you saying is...

Julie Q's deserves a separate post in the near future that I will title "Customer for Life", but suffice to say that my experiences there have been so good that I wish my hair grew faster.

Anyhow, while Julie was cutting my locks yesterday, I started some chit-chat with her about her experience marketing her shop as a small business owner (SBO). She has a very busy schedule and it's clear that she's a solid success as an SBO. I asked, had the Yellow Pages rep visited her? Had she bought ads in the paper? Had she invested in mailers or flyers for canvassing the local area? What sorts of things had she done to get her fledgling shop off the ground?

She admitted she'd bought one Yellow Page print ad, but then after the first year she dropped it. After this she hadn't spent a nickel on advertising. Ok, Mountain View is not LA or NY in terms of cut-throat competition for hair styling, but there are plenty of alternatives to choose from in the area. And her shop is not on the main drag, but three blocks removed from Castro -- basically in a residential area. You're not going to find it without help.

So how did she get her customers? Yelp. Within 8 months of opening, she had her first review (which coincided with Yelp's launch) Within 14 months, her schedule was packed. Every time she asked a new client how they'd heard about her place, it was Yelp or word-of-mouth from Yelpers.

Perhaps not surprisingly, she'd never heard of the start-up -- one of her customers actually photo-copied her reviews and brought them in to show her. Then one day a guy walks in and says he read about her shop in the Wall Street Journal. WSJ? WTF? Turns out the Journal was doing a piece on Yelp and their reviewers, and the reviewer they happened to interview used Julie Q's as a sample.

Nice story, eh? Yelp connects users to great shops. Great shops win new customers. New customers frequent great shops. The virtuous cycle is complete.

Or is it?

I asked Julie if Yelp had approached her about a sponsored listing on their site. Yes, she replied - but it was too expensive. And she already had more business than she can book, so why would she pay for additional advertising?

Indeed.

I asked Dave "Local Czar" Galvan about this and he mentioned this wasn't too surprising given that hair salons generate most of their leads on referrals. Still, I was curious to see what a Yelp search result on Mountain View for "Hair Salon" returned, and here's what I found:

Who in the world would click on a 3 star "Hair International" sponsored result , when their competitor "Mission 6" salon with 4.5 stars rests directly below it?

I was betting the answer was "nobody" until I did an informal query around the office. Apparently some people click on these all the time -- especially when the un-sponsored results have fewer reviews than those that may have a higher rating.

Who knew? It sure would be interesting to know more about how these sponsored links actually perform. And I don't mean CTRs, but actual conversions of new customers into the shop.

But this got me to thinking about some parallels between these small businesses willing to sponsor the likes of Yelp or YellowPages.com results and Marksonland's recent observations about SEO's effect on product development.

In his post, Mike posits that the most successful online properties have all created vast traffic and wealth with nary a nod from Google -- They've all had impressive growth based on fast and heavy adoption catalyzed by word-of-mouth.

Sounds kinda like Julie Q...

Yet Mike also says that this also isn't stopping the rest of the "also-rans" from trying to get their share of online traffic and success by crafting clever SEO strategies to divert traffic where they can.

Sounds kinda like Hair International...

What does this mean? I guess one could say that as long as mediocre businesses are around, the local advertising dollar is a safe bet. :-)

But I wonder if you could also stretch this parallel to how SBOs might realign focus on their businesses. Mike alludes to how some start-ups are so terrified of losing SEO that this fear causes them to make adverse concessions in their product designs. Does a Yellow Pages pitch capitalize on the same fear components in the mind of an SBO? (Hey, all your competitors are in the Yellow Pages -- you can't afford *not* to pay $850 a month. And while you're at it, why not upgrade to the quarter page color ad and beat them at their own game? Only an additional $500 for a 'platinum plus' listing...)

Might their advertising dollars be better spent on, say, giving their best employees a boost in their hourly rate to retain them? Or investing in a strategy that differentiates their businesses in ways that might actually generate word-of-mouth referrals? (Stay tuned for "Customer for Life" post)

Alas, it must be hard enough just to operate an SBO day in and day out. The failure rate is so high and so fast that one wonders how any of them make it. Fear is contagious and sells...

Long live local advertising!

“Mediocrity is self-inflicted. Genius is self-bestowed.”
- Walter Russell