The digital marketing services industry suffers from a justly-earned perception of overselling and underperforming among the small- to medium-sized businesses to which it caters, one of the industry’s leaders said Tuesday. “The reputation of this industry currently stinks,” Sharon Rowlands, CEO of ReachLocal, told attendees of BIA/Kelsey’s Leading in Local conference in SMB digital marketing.
By Michael Depp
NEW ORLEANS — The digital marketing services industry suffers from a justly-earned perception of overselling and underperforming among the small- to medium-sized businesses to which it caters, one of the industry’s leaders said Tuesday.
“The reputation of this industry currently stinks,” Sharon Rowlands, CEO of ReachLocal, told attendees of BIA/Kelsey’s Leading in Local conference in SMB digital marketing.
Rowlands says high churn, high customer dissatisfaction and attrition have marred the industry. That attrition, which hemorrhages out the back door 50% to 90% each year, in turn puts enormous pressure on the front end of DMS businesses. That leads to the overselling of often poorly-matched products for SMBs, who in turn feel cheated and embittered by the transaction.
These problems are exacerbated by industrywide challenges, Rowlands says, including a lack of transparency and benchmarks for clients. “As an industry we’re not yet ready to talk to real ROI in terms of customer gains,” she says.
But in all of this is an opportunity for the industry to step up, and Rowlands, who took the CEO post this April, says other industries in which she has worked have managed to come together to collaborate on common standards that serve their common purpose despite their competitor status.
Those standards need to revolve around three core ideas, she argues, starting with transparency. The key to industrywide elevation there is a common language and metrics around which companies can standardize.
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Second is putting an emphasis around data sets and analytics to set clearer benchmarks for clients.
Third is a two-pronged approach to education for both clients and sales. Continuous education for clients is crucial, Rowlands argues, as “you cannot put a tool in a client’s hands, train them one and then expect them to engage with that tool.”
There’s a high correlation between the level of engagement with a client and retention of that same client, she notes.
Rowlands says getting sales education right, meanwhile, is key to building a strong brand for the entire DMS industry. “It’s a cultural issue,” she says. “Companies need to want to have a quality business, to prioritize retention.”
And it takes a strong commitment from a DMS company to get that part right, she notes.
Revisiting and sharpening some of the industry’s language will also go a long way to its rehabilitation. Rowlands finds the interchangeability of the terms “contacts” and “leads” to be especially troubling. DMS sellers prefer “contacts,” as that is a vague promise on which they can deliver, whereas leads that actually help a client make a conversion are far more elusive.
Rowlands is also vexed by all of the “one-stop shop” language that has become pervasive in the industry, implicating her own ReachEdge product as contributing to that problem. All of the language promising an all-in-one solution to the SMB blurs together for those business owners, she says, and doesn’t do anything to distinguish individual companies or their value propositions.
SMB’s needs aren’t especially complex, Rowlands says — they essentially want to find new customers and do right by their current ones. DMS sellers’ part needs to be based in a conversation identifying their needs, and then matching them up with the appropriate products to give them an ethical, meaningful solution.
And that solution needs to be a model where SMBs can pay a cost per lead and get measurable ROI, she says.