ReachLocal’s $100 Million IPO, Local Is All About A Sales Force

Posted by Steve under General on Wednesday, December 23rd, 2009 12:10 pm

As I stated in the past article, local is hot and there are plenty of investors ready to commit their money into the local industry. TechCrunch.com covers ReachLocal.com’s recent $100 million IPO announcement. Even with all the geolocal technology coming to market, nothing can replicate human interaction to deliver sales results.

Reachlocal.com has an ad sales force of 525 employees who generated $143 million in revenues the first three quarters of 2009. Local.com, Yellowpages.com, Superpages.com, etc also have a sales force. It is no secret that these type of local platforms require human beings to do the selling.

Geodomains are powerful local platforms when developed properly. They deliver targeted traffic that can lead to selling advertising space to small business owners in the area easier than traditional websites. The brand communicates clearly to savvy business owners who understand how the internet works.

However, there is only a small force of savvy business owners who understand how the internet works. What does this mean to the geodomainer who is trying to recruit small business advertisers online? It will become mandatory for you to establish some sort of sales force. The size of this sales force will depend on the level of success you set for your business.

It is unrealistic to expect advertisers to beat down your door just because you have a developed geodomain. It will take hard work and a sales force to grow advertising revenue consistently. Through the years, I have met many owners of quality developed geodomains, and everyone of them have a sales force. So if you are planning to develop your geodomain, make sure to build a game plan for your sales force. Remember, local advertising is all about a sales force.

5 Responses to “ReachLocal’s $100 Million IPO, Local Is All About A Sales Force”

Bruce Marler Says:
December 23rd, 2009 at 13:22 pm
You are very correct about people not beating down the door, which is why from day one at Localtek the plan was to have local feet on the street sales people. It works.

The problem is many people that understand enough about technology to own the proper names for development or understand the possibilities believe that everything will flow to them if they build the right website and optimize accordingly.

Nope, that is not the case, it takes much education and hand holding. The businesses are ready to hear the message of local advertising but they are not going to go do the work themselves to understand it. You need people helping them get there.

We have had great success with our seminar model (literally have people writing checks in the room afterwards in many cases) because we take the time to educate and listen to what local businesses care about.

It is ALL about local:)
M. Menius Says:
December 28th, 2009 at 20:09 pm
This is an interesting topic for me because it represents the next step for taking my geo domains to higher levels. I’m beginning to hear about “sales forces” in the domain world. I also remember Skip Hoagland making a statement some time ago about incentivizing others by sharing significant % of profits with them based on their performance.

I wonder if any geo domain owner is using a high commission rate model to build their sales force. Bruce, I’m certainly curious about your financial arrangement with local sales though I understand that’s probably best kept under wraps.
Bruce Marler Says:
December 28th, 2009 at 21:44 pm
M Menius

It is kept under wraps but I will say, as anyone builds a sales force remember that high commission sales people care about one thing and one thing only, how to make a buck. Compensation drives behavior.

I have been in sales along time and as much as companies like to think sales people are about the company, at the end of the day the sales people may be attached to the company and believe in the products but they will always gravitate towards closing deals and crafting deals that give them the most in their pocket.

Craft your product pricing to match that then you will be set.

Bruce
Steve Says:
December 28th, 2009 at 22:44 pm
Incentives are the driving force behind a great sales force. However it is a bonus if they have a product or service that delivers results and value to clients. The current conditions in the economy have made it very difficult to secure new and residual advertisers in the local space. Many of the big local companies are struggling with securing advertisers, however I imagine this will improve as the economy continues to gain momentum. A sales force with the right incentives will produce results in the end and define/identify your allstar performers .
GaryK Says:
February 6th, 2010 at 19:10 pm
For about a year and a half, I was using ReachLocal for SEM. My in-house internet marketing director was handling this. Unknown to me, ReachLocal was commissioning him on my buys. I learned of this after my marketing director was let go. I suspect ReachLocal may know of situations like this, and simply may just look the other way. They claim they are unaware of any other situations like this ever occurring. With their enormous outside sales force, I doubt this is the case. I would love to hear from any other advertisers who have found out they have been paying either an employed or contracted internet marketing person or firm who in turn has been commissioned by ReachLocal.
GaryK2@gmail.com

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Welcome to the Official Geo Domain Industry Blog. My name is Steve Morales and I am the Founder and CEO of the SimplyGeo.com LLC Network. Our goal is to develop a premier Geo Network for professionals to learn and build their geo domain assets into profitable platforms.