Having been in the trenches for the past year talking about multiproduct selling and how a consultative or collaborative sales process is a key component for selling multiple media, I keep hearing over and over again “I’ve been training on consultative selling for years so why should we rely on it to take us into the next era of selling?” Having been involved in local media sales for more than 10 years, I’m going to take the unpopular stand and say that the current local media sales process is transactional product selling in consultative selling clothes. In short, many sales organizations have embraced aspects of consultative selling but in large it is being used as a sales tacticto get in the door and keep the advertiser talking in order to sell specific media options.

BNET recently featured Harvard Business School professor Ranjay Gulati, who wrote a new book titled “Reorganize for Resilience: Putting Customers at the Center of Your Business.” In his book, Gulati points out:

“In a marketplace like today, customers have more choices and more information, and services start to look like each other, in what we call a sea of sameness. If you don’t have an ability to transcend beyond the features and functionality of my product versus yours, then you have a problem.”

Gulati points out the fallacy of the notion that media companies are currently consultative and customer focused. Many media sales teams feel if they are asking a few questions about the business and their expected ROI from their marketing efforts that somehow this constitutes consultative selling. Put simply, salespeople are saying “I’ll talk about your needs so long as it leads to you only buying my portfolio of solutions.” Gulati’s point of view is “Most organizations believe they are customer centric when they are asking questions, but they’re communicating with customers through a product lens (with a pre-determined end in mind).” Instead, Gulati says “companies must ask deeper questions such as what problems they are dealing with and what issues are happening in the life of my customers regardless of the solutions the sales person is offering.” The goal in asking probing questions is to help the advertiser better articulate his or her needs so sales can get them met.

Consultative or collaborative selling is about transparency and building solutions that fit the customer’s needs and not necessarily the media company’s balance sheet. If a salesperson is aiming to sell a specific product set, and is willing to un-sell other potential solutions, then this version of consultative selling is merely disguised as the same transactional selling of old — all paths lead to a limited solution. Media consultants recognize there are many media options available to advertisers and that at times their portfolio of media offerings has to co-exist or complement other media and at other times they must fight to win budget from media that may not be as effective or is receiving too large of a share of an advertiser’s budget. Being able to counsel local advertisers on media strengths and weaknesses means salespeople must learn about all types of local media to be effective in selling their own portfolio of media options.

Local advertisers are much smarter about where they spend their marketing dollars because they have access to more information than ever before and have tighter ties to peers through social networks who can offer additional guidance. Salespeople used to be the source of information about what was happening in the local marketplace but now they are one of many sources available. If a salesperson cannot deliver value beyond what an advertiser can access on his or her own, then he or she has very little to offer. True media consultancy is the path where more peer-to-peer relationships are developed. Based on BIA/Kelsey’s Local Commerce Monitor study, 48 percent of SMBs want their media rep to help them understand their media options and make the best choice for their budget among the confusing array of new media choices.

While many media sales organizations are looking at incremental changes to their sales processes, those that are savvy and understand that local advertisers have changed and that the sales role must change are the ones that will thrive. The reality is the market has already changed and it is up to each media company to understand how to recraft its sales strategy and put together a consultative media sales team that understands local media and can be the media guide local advertisers are seeking. It’s time to stop making consultative selling a sales tactic for getting the advertiser to talk and use it as a means for building a relationship, creating value and developing media plans that work for the benefit of the advertiser and leverage their existing marketing activities. If consultative selling fantasy can be turned into reality, media outlets stand to make significant revenue gains and gain a larger, more loyal base of advertisers.

Yell.com has decided to forgo partnering on maps with Google, Microsoft or other potential competitors in favor of building its own propriety map product. The U.K.’s largest directory publisher unveiled a beta version of the Yell Maps product this week.

Yell is positioning its map product as designed for the specific purpose of finding local businesses. Here is a video that offers some color on the new product. Yell contends its new product is faster and easier to use than the previous incarnation, thanks in part to more up-to-date content and improved geocoding.

Yell used the French firm Tridoo to build the Yell Maps product. Tridoo already provides the maps on Yell’s mobile search products. The company is also using Navteq to provide quarterly updates to ensure that business location and directions are kept up to date. Yell describes Tridoo as a “small specialist company that has spent the last 10 years at the forefront of mapping and geospatial development.”

Yell “map master” Djamila Fernana-Ritchie says, “This is the first of a number of planned releases designed to make Yell Maps the premier mapping solution for local business search in the U.K.”

It seems clear that Yell, which had taken a more cooperative view toward Google in recent months, has decided that maps is a strategic piece of its future business, and owning its platform makes more sense that outsourcing it to a key competitor. The challenge for Yell will be making its maps compelling enough to divert usage from Google.

Andy Sims of Skype shed some light on its new partnership with European Directories in which European Directories sells advertisers in its seven European countries a subscriptions package to deliver calls to that advertiser. Anywhere the advertiser’s phone number shows up on the Web it will be highlighted in blue and will indicate that by clicking on the blue box that the Skype user they can make a free call to the business. Businesses that are not partaking in the Skype ad program will continue to be highlighted in gray.

While currently Skype offers a subscription model to advertisers through its reseller, it is planning on offering a second tier of pricing targeted at high-volume, high-value accounts in which they will be charged on a cost-per-click basis. Since October 2009 when the partnership was announced, Sims said there has been a nice lift in call volumes for this product, which he characterizes as a quick sale to advertisers.

Sims, who joined Skype about a year ago to develop advertising opportunities for the company, noted that Skype has roughly a half billion users who made up about 8 percent of international call minutes last year.

Last week, Yell Group issued its nine-month earnings report (the company’s financial year ends March 31) and most of the news was sobering. Organic growth is expected to be in the negative double digits in its fourth quarter, and small-business advertisers are paralyzed by uncertainty over how long the downturn will last and how bad it will get. Still, company leaders say first-quarter canvasses so far suggest a leveling off in the rate of print declines.

Yell Group is one of the world’s largest directory publishers, with market leading positions in the U.K., Spain and Latin America, and a strong U.S. competitive platform with Yellowbook.

For the nine months ended Dec. 31, 2008, Yell Group generated revenues of GBP 1.65 billion, up 7 percent over the same period in 2007. However, the growth was all driven by exchange rates. At a constant exchange rate, revenues were down 2.4 percent, which reflects groupwide online growth (at a constant exchange rate) of 40 percent and an overall print decline of 7 percent. In the U.K., print revenues declined 9.4 percent. In the U.S., print was down 5 percent and in Spain, which is facing a particularly difficult economy, print was off by 13.4 percent.

The company expects things to get worse before they get better, and getting better in this environment simply means a slowing rate of decline.

Yell CFO John Davis said on last week’s earnings conference call that group organic results would be down 12 percent in the fourth quarter, which ends March 31. This means print results will be more dramatically negative, given the company currently generates 15 percent of group revenues from online, which continues to grow at a double-digit pace.

Yell Group CEO John Condron painted a bleak picture of the current mood of small businesses, noting that canvasses are increasingly “back-end loaded” as SMBs delay spending decisions until the last possible moment. However, he did offer a slightly brighter picture of the company’s first quarter. Both Condron and Davis went to lengths to avoid being misinterpreted as predicting recovery. They merely said there is evidence the rate of decline may be slowing a bit. That is what passes for good news in this media environment.

Condron also offered some revealing comments on the U.S. competitive environment. Yellowbook is generally the second player in a given metro market in terms of revenues, with competition up the ladder from incumbent publishers and down the ladder from smaller independent publishers.

For years, Yellowbook led the consolidation of the smaller independents but has all but ceased its acquisition program as market conditions have deteriorated.

“There is no surprise that we are getting more and more rescue calls [from independent publishers] begging use to save them from imminent collapse. The model doesn’t work when faced with an organization as well organized as ours and with an economy as tough as this,” Condron said. “And most are experiencing a double whammy because they do not have a credible Internet offering and they cannot make the investment for the future.” 

Granted, Condron’s characteristically direct comments reflect an interpretation of events that favors Yell’s interests. However, it does appear that the tide has shifted for many independents, which experienced years of strong growth and plentiful exit opportunities. Now, with an economy in tatters and spending patterns shifting to platforms that are more digital, flexible and explicitly performance-based, it stands to reason that many independents will struggle, particularly those with higher exposure to major metro markets.

TKG will write up Yell’s results in greater detail next week in a Client Inquiry Brief.     

We keep going back to Clayton Christensen and his disruptive technology timeline … and we really don’t see that anything in the local space truly qualifies as the disruptor (although Google is worth pondering). Still, they keep coming.

The latest contender is Brownbook, the free Wiki-based directory that lets anyone submit and edit a directory listing, adding information, recommendations and ratings. The service is based in the U.K., but now has 25 million listings spanning the U.S, U.K., Canada and Australia. More than half its usage comes from the U.S. Users are free to submit listings in other countries as well.

Yellow-Wikis, the now defunct site, plowed some of the same ground in 2006. But the difference with Brownbook is that it is using the listings as an anchor for very low-priced SMB services. That makes it more like MerchantCircle and SMBLive’s efforts with BT Tradespace.

Brownbook started with a $17 “Customize My Page” package, where businesses can claim their listing and add and order a number of features (video, photos, map, etc.). It also recently introduced a $98 “Create My Website” deal.

Founders Dave Ingram and Marc Lyne, who come from the U.K.’s Scoot directory, tell me that the service has done well already with specialized, non-local listings — an area that Angie’s List has started on as well. A hard-to-find Bi Fold Door listing in the U.K., for instance, resulted in $11,000 of business.

Ingram and Lyne calculate they would have a strong business if even a relatively small minority of listed businesses plow $120 into the page and Web site packages. And more offerings will come. They also hope to spur sales by offering a lifelong commission to users who spur sales via recommendations or reviews — an interesting concept.

Looking forward, the Brownbook people might hope to get enough mass usage going to really focus on local offerings, which will always constitute the vast majority of directory lookups. They are getting a lot of local usage via Google, where half its listings are referenced from. But at the moment, the service is not a truly local offering.

So count me intrigued. I’ll look elsewhere for my plumbing emergencies. But it will be interesting to see if this takes off.

One of the things that dawned on me after listening to the many speakers at our recent DMS ’08 conference in Atlanta was that a fundamental aspect of the Yellow Pages business has been lost — exclusivity. During the days before the Internet and the massive sharing of data with Google, Yahoo and others, the content and data of the Yellow Pages were exclusive to the print directories or their online counterparts.

While U.S. publisher Internet Yellow Pages sites bemoan the fact that they do not enjoy healthy traffic levels, when we look to the new breed of local search players like Yellowbot, Yelp and Brownbook and listen to search platform developers like Exalead, they clearly understand the value of exclusivity. The online world, and certainly local media in general, is driven by information and particularly uniquely aggregated information. The power local search sites hold is in the amount of aggregated data they have either uniquely developed or have aggregated into a convenient package for site visitors. IYPs remain in a position to become the end all and be all of aggregated local business and service information, but the window of opportunity is quickly closing due to the efforts of Google, Yahoo and a variety of aggressive local search sites.

With the vast amount of local company data that is continuously updated and enhanced each year, directory companies own a gold mine of local information that companies like Google, Yahoo and local search sites covet — which is why they continue to strike deals to gain access to this information. Collecting and updating local business and service data is an expense that search engines and local search players are not willing to pay. Pick any vertical and you can bet that in most cases the Yellow Pages database has more business listings and content than any other source. 

European players have understood this advantage and have shared far less with the search engines and vertical sites. They have enjoyed more organic traffic levels because of their cautious nature, desire to keep the deepest local content exclusively within their IYP sites and willingness to promote their brands. While some of their advantage lies in Europe’s more closed information sharing practices, publishers in Europe have made a decision to share less with search engines than their U.S. counterparts in order to build their brand.

The print Yellow Pages product has definitely lost its relevance worldwide to a large segment of its once loyal users. If the print book could again become a source of vital local information that was exclusive to its bound pages alone (not even to its IYP site), that would certainly build relevancy and a desire to use the product. The industry needs to get busy with the task of figuring out what demographic groups it wants to own, figuring out what content and user features those customers want in both print and online, and then implementing and heavily promoting those exclusive features and user benefits. These are the steps critical to winning new print and IYP users, enhancing the relevancy of the product line and increasing the ROI for advertisers.

I’m here in Athens this week at the European Association of Directory Publishers’ annual congress. Nice line-up of speakers thus far, many of whom are echoing the themes that we heard emerge at The Kelsey Group’s DMS ’08 conference last week in Atlanta.

European Directories CEO Cornel Riklin was one of the keynote speakers to open the event today. Among his key messages to the group of mostly European directory publishers and vendors was not to look at their businesses as just print or online, but instead to view them as focused on generating leads for their advertisers.

Riklin used a variety of statistics from his company’s operations in eight countries to make the case for his overall key messages, which included the following:

• “Our business is lead generation.”
• Strategy and execution: Good execution can grow print usage/stabilize print growth, and aggressive strategic direction can grow online.
• Directory publishers can compete effectively: Strength and differentiators are the sales force and multimedia product offerings.
• Consolidation will strengthen the industry.

Riklin followed speakers that included David Smith, economics editor for The Sunday Times, and ABN AMRO’s Julian Moore, who painted a less than positive view of the global economy and media industries. Riklin, however, shed some light on how his sales force of 2,500 and total employees of 5,000 are executing on his key messages in eight diverse countries (and Gibraltar) that achieve revenues approaching 800 million euros and EBITDA of about 300 million euros.

Riklin allows print operations to be run locally while online is run from the center or corporate side of things. He sees daily how competition is increasing in key markets such as the Netherlands and acknowledges that “the industry is under siege.” He remains incredibly upbeat about the industry’s prospects even in an environment that he believes has experienced a polarization of share price performance and overall financial performance of directory publishers around the world. Riklin concludes: “It’s all about execution.”

The CEO’s vision includes a 50-50 distribution of revenues by 2011 between print and online and overall revenue growth. In an effort to achieve such growth he has rolled out a more specialized sales force that offers more packages or bundles and does so aggressively. He echoes sentiments we heard at last week’s DMS ’08 conference that get to the heart of a consultative or one-stop-shop multi-product sales approach. Consolidation, too, is part and parcel of his plans, although there were no hints of the publisher’s next target. European Directories, of course, has its hands full as it integrates its most recent acquisitons — Ditel in Poland and Gouden Gids in the Netherlands.

Riklin’s presentation was followed by U.S.-based Local Insight Media CEO Scott Pomeroy, who provided a similar message about his company’s “relentless focus on execution.” As the company’s chairwoman, Marilyn Neal, noted during her presentation at DMS ’08 last week, Local Insight Media is one of the few major publishers in the world experiencing print revenue growth. Pomeroy, too, cited economic forces, but noted key differentiators for his company such as its investment in and management of its sales force. Local Insight Media is trialing new ways of doing business, such as pay for performance, and working with new digital platforms that help set it apart.  

Sami Kassab, analyst on the European Media Research Team at Exane BNP Paribas, gave a data-laden, insightful perspective on the many of the world’s largest Yellow Pages publishers in “The Financial View” panel at Directional Media Strategies 2008.

Highlights of Kassab’s remarks (presented ticker style):

… Directory publishers have underperformed the broader media sector in both absolute and relative terms … exceptions are PagesJaunes and YPG Canada … The recent decline in print revenues is a little bit both structural and cyclical … The declines in print usage and revenues will accelerate … In valuing publishing companies, the growth in EBITDA is more important than the EBITDA margin per se … The economics of a large publisher selling search products for others (e.g., Google) are questionable (it’s probably cheaper for them to generate their own traffic) …

Kassab delivered this sobering assessment with such cosmopolitan savoir faire that not a ripple of frisson was heard in the audience.

He went on to answer a number of tough questions with a diplomatic aplomb. Example: Are some publishers overleveraged? Response: “We’ve seen the damage that over-leverage can do.”

Kassab said the imperatives for restoring financial health include:

• Repairing balance sheets (typically accomplished through downsizing)
• Selling assets (e.g., non-core publishing properties)
• Defending print revenues. For example, PagesJaunes lowered its rate card prices in selected highly competitive markets, which added credibility to its pricing structure and stemmed further erosion.
• Growing Internet revenues. Example of Eniro’s introduction of an online price comparison service.

All in all, a formidable challenge even for the mightiest.

While investors and Yellow Pages pundits continue to bang the drum telling everyone that the “younger generation” isn’t using print Yellow Pages to the degree it should, and that without this younger demographic of users the book can’t deliver value to small and medium-sized businesses, they may in fact be ignoring the book’s greatest strength. The usage habits of 18- to 30-year-olds are of concern, but the reality is that this younger generation may not in fact be a significant contributor to the financial success of local SMBs.  

Are we saying the Internet generation with its desire for new technology and penchant for name-brand merchandise isn’t the main driver of the local economy? The simple answer is — not to the degree that most people and marketing organizations seem to think. The real controllers of spending and the influencers of spending are the baby boomers. 

According to the Generation BUY survey conducted by Viacom and TV Land: 

“Not only are 40 and 50 year-olds spending more on themselves per month than Millennials and Gen Xers but more interestingly they are spending twice as much as their younger cohorts on others in their lives. With so many people to shop for, Boomers are making several multi-generational purchase decisions at once and — contrary to common assumptions — they are far less brand loyal than Millennials and Gen Xers.”  

With boomers in the sweet spot of Yellow Pages’ current usage, the value of this audience is being overlooked not only by investors and pundits, but by Yellow Page organizations as well. The traditional sales message of Yellow Pages focuses primarily on the massive local audience the book delivers based on the total distribution of the book. So as fewer people keep the book, particularly younger Internet consumers, popular logic assumes it must be less influential and drive less value to local SMBs. However, when demographics are taken into consideration, the book is in fact drawing in the largest block of income and spending influencers in the market. As Larry W. Jones, president of TV Land, points out, “Knowing that this generation has so many dependants, the means to buy the products that appeal to them and the willingness to try new brands is powerful information to share … “  

Many boomers waited to have children and more often than not have teen children in their households, which significantly influences their spending habits. Add to this the fact that many boomers now also care for elderly parents and you can begin to see the influence this audience has in the local economy. 

“With the large amount of purchase decisions they are making for others spanning multiple generations, they are ‘Promiscuous Purchasers.’ The Generation BUY study found that people 40-59 spend more than three times the amount of money per month on spouses ($514) than adults under 40 ($169). Additionally, they spend nearly twice as much per month on kids ($295 vs. $158) and three times the amount per month on teen children ($494 vs. $136). With so many purchase decisions to make for the household, these ‘Promiscuous Purchasers’ are an important marketing sector even when they are not the prime target.”  

While educating and winning over the next generation of local shoppers is important, the Generation BUY study suggests that the Yellow Pages’ prime user continues to wield significant financial power in the local marketplace. Given this new supporting information, it would be prudent for Yellow Page marketers to focus their print marketing and R&D efforts with boomers as their main focus and the younger generation as their developmental audience rather than the other way around. Using demographics to market the print directory would focus even more of the sales conversation on the value and influence of the directory, further bolstering its position as a major local media vehicle delivering ready-to-buy customers who are also significant influencers of additional purchase considerations. While marketing to the Internet generation is popular and sexy, the smart marketer goes where the money is.    

The Dutch competition authorities today approved the planned merger between the Netherlands operations of Truvo (Gouden Gids) and European Directories (DeTelefoongids). This approval clears the way for the merger to move ahead.

According to an announcement from Howrey LLP, the firm that represented Truvo in the deal, the regulators were initially wary of the deal, based on the view that allowing two direct competitors to merge reduced competition, which was bad for consumers and advertisers.

However, the commission was apparently swayed by evidence that the two publishers were less competitive than they appeared.

” Despite the apparent similarity between the Gouden Gids and De Telefoongids directories, the NMa found that they do not exert significant competitive pressure on one another. Market evidence, including surveys and past customer behaviour, clearly shows that very few advertisers switch between the two directories (e.g. in response to a price increase). They rather switch to online media or even stop advertising in directories altogether without switching to an alternative. Therefore, even if in terms of product characteristics, Gouden Gids and De Telefoongids look similar, they are not each other’s prime competitors.”

The regulators also recognized the significance of online advertising in deciding whether to approve the deal.

“Whilst it finds that not all businesses currently see online platforms as an alternative to directories, it notes that users are switching away from traditional directories to online search in significant numbers. The NMa finds that this must in time influence where businesses spend their advertising budgets, and that this will constrain the merged entity post-merger – another implication of the two-sidedness of the market.”

By “two-sidedness” the regulators meant the virtuous circle of usage driving content and content driving usage. The regulators seemed to conclude that Truvo and European Directories would encounter significant challenges with migration going forward and would handle those challenges more effectively as one company rather than two.