|How to convert free directory listings to pay?|
Seeking more income from regional directory
Two years ago I created a regional directory focused on a set of related industries and businesses. It's a one-person operation that pays me enough through advertising sales to live on, but just barely. I've made sacrifices, such as dropping health insurance, cutting out most entertainment, and postponing purchases when I can. It's been worth it in terms of satisfaction, so no complaints here.
I get plenty of positive feedback about the site and effectiveness of the advertising. My lifestyle is enviable, and even though I work long hours almost every day, I also enjoy freedom to choose my breaks whenever I want, and the only boss I answer to is me. The challenge and variety of the work keep it interesting.
The directory has many top search engine rankings and traffic is growing strongly. Search engines, especially G, are the source of most of my visitors. I would be out of business without this steady stream of people they send. PPC won't work for me due to high costs and the wide range of terms that people find me with.
I've added content that has helped get people coming back. I have a mailing list that people are joining to receive my weekly newsletter. I advertise in local papers, although the costs are high and the results aren't very good.
I have a tough problem that I've been struggling with for some time, and would appreciate your help with. I want to convert clients with free listings to paying, and older clients with low rates to the higher, current rates. The problem is how to do that.
I gave away free listings to solve the chicken and egg problem of how to prime the pump, and present the world with a useful, non-empty directory. I gave free listings to businesses that I located online and at trade shows. I planned to make money by selling them upgrades to better listings and more advertising services.
I gave some businesses very basic listings with contact information and a sentence about them. I gave others images and longer descriptions. I added more by scanning their business cards and using the card images as listings. Every listing is a whole web page.
I began to charge low rates in an effort to learn what I would be able to charge. Gradually I raised my rates. I now have a range of clients paying anywhere from nothing at all, to a reasonable fee for the advertising that they receive.
I recently got one of my older listings, who began with very low rates, to agree to pay over twice what he had been paying for the past year. Even with the increase he's still paying less than one third of what new clients pay for the same services. It was difficult to get him to agree to the rate increase. His objection was that even though the new rates are still low, his increase on a percentage basis (250%) was quite high. I replied that at his low old rate, any increase would have to be a large percentage to be meaningful.
I know that some clients are getting plenty of new business as a result of their listings, and others do not. There must be a temptation for some to play down their success, as a negotiating strategy to keep their rates low. The way to tell with more certainty is to see what they're willing to pay to keep the services they receive from me.
If you see another option, I'm interested in hearing it, otherwise these are the three that I'm trying to choose from:
1) Entice all listings to upgrade, and allow free listings to remain free. Limit any changes to "free, introductory" listings to corrections to contact information, but no new descriptions or business categories that would add value. They must begin paying to get that added value.
2) Remove some kinds of information from free listings that won't begin to pay, but allow them to remain free. I could removing images, descriptions, website links, and email addresses, and reduce the number of business categories they appear in.
3) Threaten complete expulsion from the directory unless a purchase is made. Some people will hang onto a freebie forever and this may be the only way to get them to pay.
I stopped giving away listings about a year ago and limited changes to free listings (option #1) about 6 months ago. I never stated how long their listings would remain free when I gave them away. Nobody asked either. Now I refer to them as "free, introductory listings". People will want to know, "What are my options?" when I approach them to pay more or begin paying. I need to have a good answer.
I'm trying to decide whether to go to option #2 or #3. Any presense at all in the directory may deliver many customers, so from listings may not stop or slow down then number of sales leads they generate. Search engines will continue to send people to some reduced listings, even if they only contain a business name, address, phone number and only appear in a single business category.
If I do decide to go with #2 or #3, then I may want to take a cautious approach that would allow me to change my mind if too few freebies convert to paying. I don't want to end up with a much smaller directory. I might contact the oldest listings first or start with the ones that seem to be getting them most business from their listings.
I'm considering a carrot and stick approach, that would offer some sort of discount or extra feature, in return for orders before a certain cutoff date, after which I would get tougher.
Thanks in advance, I appreciate your help.
I'm amazed that nobody has anything to contribute to this topic, which I had hoped would stimulate some interesting and useful discussions.
I'd love to hear what directory script he was using
Why can't you just start charging them? Send an email saying your business model has changed and you are now charging $XX/year listing. While your visitors obviously find their product appealing, you are forced to now charge them or drop them - otherwise it is not fair to your paying customers.
Phase this in over time. Expect to lose some customers, but if they aren't paying you who cares. Any freeloaders you boot will increase attention to your paying customers making it more likely they will renew.
If I were running this directory, I will create various categories of listings and push the free ones to the bottom. Other categories will have better font, color and placements.
You could start using Adsense, and similar programs to derive more revenue.
Don't delete the free listings and alienate potential "premium" customers.
Thanks for the responses to my request for help. Here are my replies to each one so far:
zulufox wants to know what directory script I'm using. The ansower is that my site is completely custom-written php code running with a mysql database. Wrote it all myself. I have a very strong programming background.
figment88 suggests that I just start charging based on a new business model. This is the direction that I'm leaning toward right now. Some people will hang onto a freebie until time freezes over. Booting some is necessary for dealing with that, and also anything short of booting will still deliver the benefits of my top SE rankings to them as long as any of their contact info remains in their listing.
IITian's idea of having different levels of listings is one that I've already implemented by having regular listings and better listings. The listings are all equal (everyone gets a full page) but their presentation on category pages depends on whether they are regular or better.
The problem with pushing the freebies down is it will make it clear to everyone who's a freebie and who isn't. That's something I don't want to do because of the large number of freebies. I don't want to anger my paying customers and if they saw how many freebies still remain, they might not like it.
Please keep your ideas coming! I really appreciate it.
Thanks for your email.
I noticed you said that you spend very little on local advertising, I would suggest since you are spending so little, it's just not going to get you the results you need, so scrub that form of advertising totally, and use the saved cash for other ads.
You also said that local advertisng isn't you main means of advertising, er, what is? It's difficult to advise when I don't have your website URL, as I'd need to actually see the site in question.
You seem to be reluctant to use other Paid SE's, in favour of 'free' listings, but as we all know, the free listings aren't worth anything anyway, and unless you're very lucky, few sales conversions will come from those methods.
Your site will be thought of and viewed as brand new by surfers, regardless of how you see it, and must be sold on it's merits, capabilities and ROI.
So, for you to 'beat' the competition - you need to first stand out and second - well that's the real trick isn't it.
How do you get people to spend. What determines why one customer will buy, yet another won't!
Search will dramatically increase over the next 5 years, so you need to act now. That means you've got to stand out, and unfortunately means either spending cash, or serious hard work obtaining free links - which unless you have the manpower to do - serves as the greatest barrier to success for any web site.
You probably have 2 main problem areas:
Both are necessary, and it's the second that's going to eat into your time. But you just have to ride it out - as there's no other way.
Forget all these easy and secret techniques, guru sites etc. You're only going to make it by hard graft.
Converting free listings into paid
This is tough to do. You gave 3 options, and I would suggest the following:
Keep the free listings, and don't ban people just because they don't pay at that moment!
Well, you would be reducing your content for one. Why do people visit a site or even use the web?
They want/need information. Okay, so you remove a company, as this company is being awkward, and a pain in the butt - they won't pay basically.
So, what if 100 don't pay? and you remove them. You've just lost 100 bits of valuable searchable info - haven't you! So, I do a search for something, and that something was just removed, I've not found what I'm looking for, haven't I.
So, the question is, as a searcher, do I go back to that site again? I would say probably not. Or at least not very often.
So that turns into 1 lost click for one of your clients - and what are they going to think about that.
(Clients do check to see where traffic is coming from.....)
I'm sure you get my point here.
You will only convert sales when you:
1. Have loads of content
2. Loads of repeat visitors
As I haven't seen your site, I don't know it's there.... I don't know your traffic levels, or about your services or anything.
Therefore as a potential searcher, advertiser, I'm off down the road to i dunno Google or whatever. So you do have a major problem at the moment.
Why do you think it's so difficult to get good rankings? Because the engines make it that hard. So you will be forced to buy decent ad space.
Yes, you could mess about optimising this and that, or pay £50 a month in SEO charges or PPC, but it's far cheaper and cost effective to get a sponsered listing, compared to PPC.
So you know, don't dismiss PFI with SE's or directories.
I'd need to know more to advise you further.
Christopher, thanks for your response. I am getting tremendous traffic and have top (often #1 and almost always in the top few) rankings on google (and other major SEs) for just about every search term related to the focus of my site. Search engines are by far my site's greatest source of visitors. I don't see why I would want to pay an SE as you suggest, when I'm already getting the best that they have to offer free of charge. The SE rankings for my site I regard as a great victory and not a real concern at this point, but if things were to change then that would be another story.
I like the trickle of new people and exposure to potential advertising clients that my small local advertising program gives me, so I'm going to stick with that.
I'm also hesitant to reveal the identity of my site because keeping it secret allows me to be more open about what I'm doing and the issues that I face.
My competition comes in the form of printed directories and printed newspapers. No other website that I'm aware of is giving me much competition. I look forward to the day when the Internet gets as much respect (commands as high advertising rates) as print media!
The only thing that I sell on my site is advertising. I've experimented with affiliate programs to sell stuff to my site's visitors and to try to generate additional revenue, but it hasn't paid off.
I am keenly aware of the need to have my directory be as comprehensive a source as possible about its subject, so when you caution me about not kicking out freebies because they won't pay, I know that there is wisdom in what you're saying. That really hits on my dilemma - can't kick them out (at least not too many) but some will never pay unless they think they'll get kicked out. They know what a great deal they're getting.
Don't give them just two options. Give them
Bold - $x / year
Red - $y / year
Bold + Red color - $z / year
Front of queue - $ ...
Sponsor's link on top,
Free (in small print)
+ service (user-defined description, your description, generic description, number of times able to chage, charge per change, and so on.)
I like your suggestion, IITian, to give more options. The thing that I wonder about is whether users may become confused by giving them too many choices. The yellow pages phone book offers choices like those that you suggest.
>>I don't see why I would want to pay an SE as you suggest, when I'm already getting the best that they have to offer free of charge.<<
I'm not sure what you want me to say.
I would say you would be getting better placing, if you paid - coloured background etc for your money.
Also you're clearly not getting the best they offer for nothing. As 'Free' is always a very basic listing - and they won't give you something great for nothing.
There is only one directory currently doing that for certain clients only - and I know who that is.
>>I like the trickle of new people and exposure to potential advertising clients that my small local advertising program gives me, so I'm going to stick with that.<<
That would depend on how much you're currenty paying them, but if it's the local press - you would probably be looking at £150 for 6 weeks or so.
And it depends on what you mean by trickle. As I know probably what a trickle is in directory terms, is why I suggested you stop paying for local press.
The only reason for not doing that would be if you are concentrating on local area.
>>I'm also hesitant to reveal the identity of my site because keeping it secret allows me to be more open about what I'm doing and the issues that I face.<<
If you're advertising locally in the press, it isn't that secret, and it's going to be difficult to advise you, if members on here can't see it.
I am now wondering why you wish to keep it so secret.
Design problems/Outstanding design work?
Empty directory categories?
hmmmmmmmm. Well, difficult to help you really!
Listen Good luck with it anyway.
Christopher, thanks again for your post. I'll try to clarify for you and then maybe you'll be in a better position to make suggestions.
My directory is regional, and has a strong focus on a specific industry. Google gives the site top rankings for a long list of searches in my region for the focus industry. Those rankings are a great source of traffic for my site. Yahoo, MSN, and AOL, also give me great rankings, but not nearly as much traffic as Google search results generate for me. Google is where people, who are looking for what I offer, do their searching, so I can't imagine what other directory you might be thinking of as a place for me to pay for inclusion/placement.
I spend about $100 / month on local print advertising. I do that in places that my advertising clients advertise to their clients. The local print ads are in a regional newspaper with the same industry focus as my site.
I don't want to reveal the name of my site because I want to discuss private, business model aspects of the site in a public forum, without concern that this proprietary info will become known to competitors and to potential clients. I have nothing to hide, such as empty categories or design flaws. I appreciate the opportunity that anonymity gives me to reveal proprietary info and get valuable suggestions, which is my reason for feeling that Webmaster World is such a great site.
Right now my thinking, based on suggestions so far, is to try contacting a few freebies by phone and email to see if I can convince them to begin paying. I like a carrot and stick approach. I'll offer them a limited-time discount to begin paying and will threaten to remove them if they won't pay. I won't do this on a big scale or in a public way at first. If I lose a dozen or so freebies in the process, that's an acceptable risk and won't hurt my directory at all. This experiment should allow me to discover what my losses might be if I choose to make that approach public and do it on a larger scale.
Hey, here's an idea for you:
How about keeping the free listings, but make all the paying listings into a link to a stand alone page for that company/person giving more info?
By more info, this could be anything from info on what they carry, their hours, their "differential advantage" over other companies in that category to a link to their street address at somewhere like mapquest (for easy directions) to a company supplied homepage/tombstone type webpage complete with whatever the company wants to send in (think photo of their business, the owner, etc.).
For the client company provided webpage, I would ONLY have a policy of accepting "web ready" webpages that you would upload to your server. They e-mail it to you, you upload it, and they can only request you pull it or replace it with a new one they send you. This keeps you from being pestered to death with request to change their webpage. You would, of course, have to provide simple instructions on how to do the relative links for their images, etc.
As a fellow programmer, I would suggest considering a way to automate this "e-mail webpage update loop" to make it as close to "no-human-involvement" as possible.
Basically, I think paying customers would accept this value proposition. They not only stand out by having their listing be a link to more information, giving them a chance to sell the surfer on their offerings, but it gives them control over the whole process, too! And people like that.
Plus, after you automate the whole "e-mail webpage update loop", they can make changes 24 hours a day -- and see their changes instantly. Heck, integrate CVS and give them the option to "fall back" to an earlier "update" or just toggle thru all their previous ones to help get their creative juices flowing and spark ideas -- you can even sell this as offering them the ability to do A/B testing -- all at their control, with the ability to see the changes take place instantly (and taking none of your time to boot!).
You mentioned you have a strong programming background, so I figured I would share the above ideas that poped into mind. Hope the above helps! Take care.
A fellow programmer,
Louis, thanks for the idea. I began by giving clients the option to build their own listing. Everyone gets a full-page, whether they're a freebie or paying. My initial strategy was that the listing were free, but you paid for better placement/display on category pages, and you could buy banner ads. Everything was done with templates of my own construction.
It was a real mess. People would choose a long list of categories that they didn't belong in, and then I'd was faced with taking them away...an unpleasant task. Also, the language skills of many out there are, well, ...lacking (to put it kindly). Correcting a client's bad grammar can also be a ticklish task.
I have stopped allowing people to build their own listings. I have also stopped giving away free listings. So options for new free listings are not something that I would want to pursue at this point. I no longer need to give away freebies, now that I've achieved a decent level of success and a large number of listings.
My clients are very busy and very non-technical. They want to pay and go away. They like to leave it all to me. It took me a while to figure that out, but it's been an important lesson for me. I built some cool functionality for them to use that I've since discarded.
I don't know if this would fit into your site, bit how about offering some kind of advertorial type articles - profiles on companies or general articals that mention specific companies.
Linking to the most recent of these from every page would give a short term benefit which you could sell, or use as a negotiating tool when trying to get listings upgraded.
Maybe this sort of thing wouldn't work on your site - you say it is a directory, and maybe people don't go there looking for articals. But I thought I'd suggest it since its a technique that magazines use on their advertisers.
ytswy, your suggestion is one that I've already adopted and with specific wording that all paying customers are entitled to make free press releases. I have added a page of news stories that I update every day, often a few times. I have a large mailing list that I send out a weekly news update to. Press release titles appear in the mailout and on the news page. I even display their logo with their press release.
You would think that response to such great free publicity would be overwhelming, but it's been small. Almost everyone is just too busy running their businesses to take the time or to give advertising much thought. There are definitely some exceptions, who take full advantage of this service, but not nearly as many as I thought.
The real question is how many new paying customers has offering the free press releases brought in. People sound excited and interested when they hear about it, but results have been modest.
Part of the problem may be the time of year and the fact that my news service is only a couple of months old. I am hopeful that when September rolls around and people are in a more "back to work, vacation is over" frame of mind, things will pick up.
Yep. Holidays will always be more of a priority than work. People need to recharge those batteries!
One idea for you free listings, rather then just drop them require that they give you a backlink to their directory catergory. That way you will at least get a deep link out of them :-).
Would people go for that? I mean you might as well just ask for a link exchange.
Personally, I don't like directories that ask for that.
It stinks of desperation!
My goal is to increase my income. I still haven't decided whether I'm willing to drop people or not. My current inclination is to wait until September as I mentioned earlier. Late August is a rough time to sell advertising.
Trying to get a link back from my listing clients would be impractical. Not all have websites, and the ones that do usually are not able to work on them themselves. Also links from them tend to have little value. It's the link from me that's worth something.
Back on the subject of dropping people. I'm dealing with a fairly tight community and am cautious about doing anything that could turn sentiment (and gossip) against me.
August has been quite profitable for me.
It of course depends on how you work, but the Summer months can be profitable, as people are happier - because it's summer!
Threatening to remove people can help promote the seriousness of your business - it depends on how you do that though.
If some clients are going to list and take the pee out of you, maybe it's wrong for you to set up a directory, just not your thing maybe......
Your success will depend on this niche area of yours, and other things too. But mostly the niche area!
If you get that wrong, you might as well give up now.
If you don't convert those sales, a directory will die. Owners will get fed up with the admin and tremendous work involved and give up within 3 years.
I read on Search Engine Watch that 3 (once respected)SE's went bust - obviously due to lack of income.
Yes - it's that easy. It's quite scary to think that good profitable sites can just go broke.
I see no danger of going broke at this point. The income is adequate to get by on and growing steadily. I'm looking for shortcuts to quicker growth, but if none turn out to be acceptable that's fine because this is not a desparate situation.
If I do nothing to give my freebies extra motiviation to convert to paying, many will do it eventually on their own as they realize that there are strong benefits that they'll be gaining by upgrading. I just got off the phone with a perfect example of that happening and it feels great.
Sticky me your URL, as I wouldn't mind seeing what you've put together.
I would like to see the URL too. Also I am sure you realise you wont be interested in deleting the free listings as they build your website as a source of content.
As I said in an earlier post, I prefer not to give out my site's URL.
I am reluctant to lose the content that my free listings provide, however I am willing to experiment by contacting a few individually to see how they respond. If I lose a very small percentage and get many conversions, then that would be fine.
Your content, is not actually owned by you. Since any company (client) details you have is owned by the respective clients, it's automatically protected under copyright law and also the Data Protection Act 1974.
D P A prohibits the unlawful copying, deleting, alteration and destruction of data held on a computer.
Also, I would imagine that any would be directory/SE owners would:
A. Have gotten their data from elsewhere by now and
B. Use a feed from Google etc
I think your panicking about nothing. Even if they did steal your client's details, they could put it in a slightly different format, and there wouldn't be anything you could do about it.
You would have a hard time proving it anyway.
Me in a panic? I have no idea what you're talking about, Christopher.
Okay fine, but people will wonder about your reluctance to disclose your URL.
That's all I'm saying.