A central theme emerged this morning at SMB Digital Marketing. It began in the Focus on Profits session, where former BIA/Kelsey analyst and current Yellowbot CEO Matt Booth declared, “In ten years, this conference will be all about software and services.”
Matt’s point was simple. Selling advertising to local SMBs is a tough business. Renewals are getting harder and competition is fierce. Selling cloud based services (presence management, CRM, reputation management) offers the opportunity for that coveted “lock in” that ensures a long-term high-value customer relationship because the SMB depends on your service to manage its business. Think Demand Force or Open Table.
“I couldn’t agree more with Matt that it will all be in SaaS in the future,” said ReachLocal President Nathan Hanks during his keynote presentation following the Focus on Profits panel.
Hanks took Booth’s prediction a step further by predicting the move to a SMB marketplace built around SaaS is closer to five years away. The big opportunity is in marketing automation, and ReachLocal is moving aggressively in this direction.
Part of Hanks’ thesis is that the purchasing process for local merchants is broken.
“It is not fun to do all you have to do to get and keep customers today,” he said. Sifting through the entire basket of point solutions and providers, getting leads, following up, and fulfilling orders adds up to a draining process.
Software is going to dominate local because it makes life better for the merchant. “Software is the answer for what ails us in local, and for what takes us to the next level.”
No doubt a large sales force is an asset. However, it is not a requirement for success in local, particularly as the local space moves toward more of a data- and software-driven paradigm. Hubspot, Hanks points out, uses technology to bring in leads, and sales to close the leads. “You don’t to have to have a big sales force to win in where local is going,” Hanks said.
Hanks leads a company that will drive about $500 million in revenue this year, with 2,000 employees and 23,700 active advertisers. Hanks replaced Reach’s CEO and co-founder, Zorik Gordon as keynoter. Gordon resigned last week, for reasons that were not immediately disclosed. The company did reaffirm guidance for the year, in an effort to reassure investors that Gordon’s departure wasn’t tied to the company’s performance.