LSA survey reveals important standards SMBs want from a provider that will help marketers stand out from the competition and reduce churn. Columnist Wesley Young elaborates.
Small and medium-sized businesses (SMBs) get almost 24 calls a month from marketing providers looking to sell them advertising or marketing products and services. Competition is fierce, and SMBs often have a difficult time choosing a provider.
Last month, I covered how the trend of fake online content leads to a general distrust of digital and online media. But the local digital marketing industry, especially in the area of SEO, suffers from its own share of issues that lead to a lack of trust by SMBs.
LSA (Local Search Association) conducted a survey to examine what challenges SMBs face when shopping for a digital marketing provider and what areas they feel are most important for marketers to address when trying to gain their business.
Below I discuss the results of the survey, data regarding client churn in the industry and ways in which marketers need to respond. Lastly, I share some information on a new certification program that LSA is launching to address these problems.
Top challenges in finding a marketing provider
LSA’s survey found that the top challenges expressed by SMBs when shopping for a marketing provider were:
- finding a reasonably priced service provider (56 percent)
- finding a provider that provides value or ROI (44 percent)
- finding a provider that can be trusted (38 percent)
- finding providers that understand their needs (35 percent)
Other questions asked in the survey that reflect what SMBs want from their marketing partners provide further insight into these numbers. SMBs aren’t just concerned with the bottom-line cost, but also with knowing what the price includes. Eighty-six percent of SMBs responded that a clear statement of pricing or costs from providers was very or extremely important. Likewise, 82 percent of SMBs stated that it’s very or extremely important that a provider fairly represents its expertise, the product or service being sold, credentials and past performance.
Thus, the top four challenges listed above are related in that SMBs have difficulty trusting that what they are buying really will pay off and meet their needs.
SMBs also want agreements with providers to be clear, especially in the areas of length of the agreement, how they can terminate an agreement, a schedule for payment and what happens when there is a dispute between the SMB and provider. Seventy to 80 percent of SMBs rated these areas as very or extremely important. A similar percentage of SMBs wanted assurances that they will receive reliable customer service in communicating with them once an agreement is in place.
Sixty to 70 percent of SMBs felt regular reporting, an evaluation of whether they were a good fit for specific marketing products/services and setting reasonable expectations were very or extremely important.
Sales tips based on what SMBs want
The challenges SMBS face in finding a provider they feel comfortable with are becoming even more pronounced as they are targeted by an increasing number of remote sales calls. Recent data from Borrell Associates revealed the number of sales calls received by SMBs per month increased over 60 percent last year, from 14.6 calls in 2015 to 23.7 calls in 2016.
Knowing what information SMBs express as important to their decision when shopping for a digital marketing provider can help marketers understand how to build trust and confidence with a potential client during the sales process. Here are a few tips based on the survey results:
- Be very open about your pricing, and don’t dodge questions or give nonresponsive answers to requests for more information or specificity.
- Have backup ready to support representations you make about your expertise, credentials and past performance. Offer to send them links to supporting documentation.
- Share some examples of when your product or service might not be suitable so that you provide a balanced review.
- Keep agreements clear and simple, and don’t hide the abovementioned specific areas of concern in fine print, including length of contract, payment details, how to reach someone if there are issues or concerns, and ultimately, how the agreement may be canceled.
- Explain your customer service standards and what access is available to accounting and performance reports.
Some disclosures might seem counterintuitive to making a sale, but the credibility gained by demonstrating transparency and honesty should lead to positive results.
Dealing with unfair competition
Local search marketers also face competition, both from outright scams and unfair or questionable sales tactics by companies who actually offer real marketing products. It’s difficult to know what percentage of sales calls or communications are from these bad apples, but it doesn’t take much to poison the whole barrel.
Here are some examples of the bad sales practices that leave SMBs with negative experiences and cause them to shop for digital marketing services skeptically.
- Sales pitches that are misleading. Promises are made that are disguised using nonspecific performance outcomes or meaningless results. For example, promising to secure a #1 Google ranking or page one search results without specifying that the result is for very specific keywords, not broad search terms. A business is likely already the top result for a search that includes the full name of the business and its location.
- Low-cost services that rely on upselling. A form of bait and switch where the SMB is lured in by a low-cost agreement or plan that then only serves as an opportunity to sell real services at higher costs. Alternately, those other services are automatically billed once payment information is secured.
- Services without accountability. Services are provided, but the client has no reporting or metrics to gauge the effectiveness or return on its marketing spend. Recurring charges are continued until the client finally cancels.
- A focus on profitability instead of client interests. Marketing products or services are recommended or prioritized by how lucrative it is for the marketer as opposed to how well it helps the client.
Being aware of these tactics will help providers understand the mindset of some SMBs during sales calls or while trying to make contact. Ultimately, demonstrating transparency and honesty and showing that the provider is sensitive to these concerns will help win over SMBs that have legitimate reasons to question who they do business with.
The importance of fulfillment and churn
A genuine sales process that keeps expectations realistic has an impact beyond making the sale: it also affects client retention. Marketing agencies have traditionally struggled in this area with historically high churn rates.
An LSA Report titled “SMB Advertiser Churn: New Data for an Old Industry Problem” (January 2016) revealed that agencies continue to have one of the highest churn rates by media category at a rate of 40 to 50 percent a year. The only media category that experiences higher churn rates is television. SEO/SEM as a media category also experienced higher-than-typical churn, at an average rate of about 40 percent per year.
Client retention is important from both a cost and revenue business perspective. It costs five to 10 times more to sign up a new customer than it does to retain an existing one, according to data shared by Google at LSA’s 2016 Annual Conference.
On the revenue side, Google also shared that selling to existing customers has a 60 to 70 percent probability of success, compared to only five to 20 percent for new customers.
These numbers reveal that clients who see results matching what they were promised in the sales process trust their marketing provider, grow into long-term business relationships and end up being much more profitable accounts.
What can marketers do to earn SMB trust?
LSA created a set of standards that capture those best practices SMBs state would help foster trust in a digital marketing provider. Reviewing these standards and implementing them into company policies, training, quality control checks and client agreements and communications will go a long way to developing strong client-centric digital marketing sales processes that SMBs look for.
According to the survey, 80 percent of SMBs stated that they would be likely or highly influenced in their choice of digital marketing provider if a provider demonstrated that it adopted these standards.
The standards cover, but are not limited to, the following subject areas:
- Service agreements and pricing are clear.
- Sales practices are fair and ethical.
- Representations made are truthful and accurate.
- Sales and service reps are trained to meet standards.
- Clients receive accounting and performance reports.
- Products and services sold are suitable for the buyer.
- All terms and conditions for service and performance are defined including how to terminate the agreement.
- Past performance metrics are accurate.
- Reasonable expectations are set.
One of LSA’s not-for-profit missions is to advocate for and elevate the local search and local marketing industry. In response to the needs identified above, LSA created a first-of-its-kind program called LSA Certification based on those standards (disclosure: I work for LSA).
Unlike other certification programs that focus on subject matter expertise, such as Google AdWords, LSA certification examines companywide policies and processes for digital marketing sales and fulfillment. We hope LSA Certification will help companies identify best practices that are important to adopt and guide them through ways to incorporate those practices into their business operations.
A business can certainly put the standards into practice without becoming certified. Certification, however, requires that a business demonstrate it engages in those best practices. LSA performs a rigorous review of policies, training, company documents and agreements to determine whether business practices meet the standards. If it passes the review, a company may then cite its certification as evidence it complies with those standards.
Standard features in consumer products often start with one company offering it and others copying the practice or feature to stay competitive. For example, all major cellphone providers now offer unlimited data plans, and side impact air bags are now fairly standard in passenger vehicles.
Our hope is that by raising the bar for digital marketing sellers, more and more agencies and providers in the industry would follow suit and adopt these standards. Better business practices that consider the interests of small businesses and boost the reputation of the industry is a win for all.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.