Can Twitter be effective for small business owners? It really just depends, but for most small business owners the answer is no. Small business is typically defined as smaller than $50 million in annual revenue. If that is the criteria, then the higher…

He said ReachLocal has been delivering him about 400 phone calls a month, about half of which became paying customers.

You should have seen his face light up.

And on top of that, he was using all of those recorded calls to do trainings with his employees. He visits one of this stores, pulls out his laptop in the conference room and goes through the calls with the employees there.

It seemed like a great example to me of “online local” coming into focus.

I do believe that's a challenge lending itself quite nicely to visionaries, fools and entrepreneurs in general!

It's a little over half a year old, but still valid in my mind. I still contend that this is the right business model for them (use the badges as promotional incentives that solve the model of “proving” people went to the venue), I'd also note that most small business owners like to ask “how do I know that person wasn't gonna come in here anyway” which could be answered by analyzing user history.

My belief that 4[] has a good market opportunity in front of them doesn't make the argument that local is rife with problems any less valid. If you don't have an innovative approach that is going to solve the problem of acquisition and retention, you should just hand your investors their money back.

First, the penetration of digital/online media has now exceeded that of traditional media among small and medium-sized business advertisers for the first time. Penetration of digital/online media increased from 73 percent in August 2008 to 77 percent in August 2009 (Source: http://www.foxbusiness.com/story/penetration-on…).

Secondly, consider ServiceMagic, which most people in the industry agree is a poor experience for consumers and service providers alike. Consumers get called (and sometimes harassed) by multiple service providers who paid $50 for the lead. Since ServiceMagic generally sends the lead to 3 providers, they clean up with $150 in revenue while (at least) 2 of the 3 providers are left holding the bag. ServiceMagic is doing 100x the revenue of Yelp per user. My estimate from the IAC 10Q is that they're making $60/user and making about $148M in revenue/year. Also, despite the recession, ServiceMagic is on track to grow about 14% this year (Source: http://ir.iac.com/secfiling.cfm?filingID=104746…).

Who says the badges have to be tied to anything in particular in the points system? What about secondary badge markets?

Local services (e.g., nail salon, massage therapist) probably make more sense online with something like time-based specials to fill open capacity, but it would be hard to tell whether you're really attracting incremental customers or just making people time-shift to cheaper periods and hurting your profitability.

All of this is a huge pyschological shift as well. One of the reasons there can be huge amounts of churn in hyper-local businesses is that hyper-local businesses are relationship businesses: they are can be as much dependent on technical skills that have to be displayed well as they are dependent on technologies.

Craft local jobs have to be cultivated and displayed, it's one of the major reasons there is churn. I don't, and no one I know, judges a dry cleaner purely on when I get a shirt back…It's whether the owner is nice, and if the shirt is pressed correctly with no stains, in a convenient location to what I need to do, and priced correctly. Perhaps it would be nice to be text messaged about picking up my shirts, or that the other guy press shirts for a somewhat cheaper price. At the end of the day, I'm still particular about the men shirts I “borrow” to wear as tunics over dresses, or my women's dress shirts that I get from Jcrew, and who's handling them. Convenience is not the only triumph here.

Both of you are on the mark, it is very clear that all of these newer services have to be very clearly driven by good understandings of local metrics. And those are very different than say national metrics.
One of the reasons something like Groupon works is that a SMB knows how many people bought the coupon for Groupon. Their is a minimum starting point for that churn to measure against. Most businesses don't even get that.

ReachLocal, Yodle and the online yellow pages enable small businesses to more easily spend money to advertise online. But they simply drive traffic to SMB Web pages that aren't designed to convert that traffic into leads and sales.

Those services fall short because they don't directly help SMBs generate prospects and sales. And that's why ReachLocal et. al. have the churn problems they do.

Until our industry makes directions connections between the online channel and SMBs' cash flow, “online local” will remain illusory.

I don't think local business will be slow to embrace a technology once they see competitors and peers actually benefiting from it. If someone produces a killer app (the likes of foursquare are probably a good staring point) that produces tangible visible benefits to the small business owner then they'll jump on it.

We have several nightclub and bar clients that broadcast offers by sms on a given evening to try and drive traffic into their venues. Whilst the strategy works quite well the problem is that it is not location based. It would be far more effective if it was targeted at people who were actually out in the area of the venue on that particular evening and who were open to receiving a voucher for a free drink or entry to a club. There may already be an app for that but if there isn't …..

Hypothetical:
A bar could find out what other bars they are most directly in
competition with. What specials and menu items are working for
competitors would extremely valuabe. This type of actionable info just
doesn't exist yet.

Then bars could reach out to people who have attended there
competitors but not yet attended their establishment.

This is just the bar/retaraunt example… I believe there are many
more verticles that foursquare could be a major player.

I understand the value of providing customer demographics and information. However, in the case of foursquare, the customers using foursquare are frequent customers that the establishments are aware of anyway – meaning they understand that demographic already. Where's the value in receiving information about what they already know?

I think foursquare is a fascinating business that is leading the charge of connecting the online and offline worlds. However, I have yet to hear a legitimate revenue model.

On Yext, it's the college kids making the calls: http://www.yext.com/recruiting/sales/

One way we are seeing this happen is the quickly growing number of sites getting consumers to buy coupons online for offline local transactions (see groupon.com, livingsocial.com). They aren't revolutionizing the local industry overnight but it's a step in the right direction.

Other sources of local affiliate links are sites like restaurant.com, seamlessweb.com and opentable.com. If people know of others, we would love to hear about them.

i suspect the home page is a headfake – this is their real business
http://www.yext.com/yextcalls.jsp which i bet you they promote via robocalls / call center

http://www.techcrunch.com/2009/10/01/the-25-mil…

focus on phone calls (as you mentioned) and pay per action metric as opposed to pay per call.

The online conversation btw customers and local business is rapidly growing and it's the new generation of small business owners that are leading the charge – aka they recognize the value.

Jeff, love to grab some info about your Urban Radar project.

As reservations, payment, etc move to the mobile world vendors will leverage technology because it is simply easier. No more stops to the dry cleaners without knowing whether my stuff is ready. No more trips to the laundromat to find all the units in use.

Much of this has to do with legacy systems I think: the lifecycle of the hardware. Once all forms of hardware are networked at a marginal cost to buyers and software exists that doesn't make every development job custom for these businesses, companies like Foursquare and Loopt are a natural place not only for discovery but for merchant processing.

I think OpenTable serves as a good example of networked hardware monetizing local.

But I'd love to hear about it if you think I'm wrong.