Acquiring Local Merchants?

March 21st, 2015

Has anyone had success with on boarding local merchants?

Julien Fruchier Founder at Republic of Change

March 24th, 2015

I do have extensive experience acquiring small merchants. Specifically, trendy, mid-range to upscale merchants that have the funds to spend on marketing and mostly don't need it because they have cachet. Tough crowd. Getting their attention is a challenging endeavor. Why? Because they get pitched daily by vendors who waste their and their staff's time. A brief insight into what they want and don't want...

They don't want:

To learn about yet another app or website
To offer discounts or deals - sorry man, you're going to have to come up with something better and "data" is not compelling enough to them... they've heard that one before too
To waste their time listening to yet another pitch

What they want:

More customers
Know that it works (user cases from businesses they know, that you have many users in their market, that your users are active and engaged)
Know that if it doesn't work for them, they won't have invested a lot of time and money on it (keep in mind that they're quite jaded from their recent experience with Groupon (pitched as free yet ended up costing them an arm and a leg) and Facebook (pitched as "build your community for free" only to find out it was a bait-and-switch and now that they've invested so much time building a following, they have to pay))

You may be inclined to think that using the national merchant brands you have on board to market to small businesses is a good idea. I don't recommend it. Big businesses are the competition. They are predatory and play unfairly in their eyes. They don't want to be seen on the same platform as them so you have to choose your market. They also know that one size fits all doesn't work so if you work for big biz, in their logic, it won't for work for them.

These are generalities of course but they are real and most tech companies in this space don't take the time to truly understand what it is they want and how to approach them. They just make a lot of assumptions (as I did initially) like yours until they fail. This is going to be a long and challenging road so I hope you're up for it. This is my sixth startup and it's one of the toughest gigs I've done. The upside? If you get traction, they'll swarm to you (think Groupon in the early days). Small business owners are connected with other small business owners through chambers of commerce and they'll be your best advocates if what you do works.

Good luck. Hope this helps.

David Paxton Premier Merchant Consulting Services

March 21st, 2015

Yes, I was going to say they charge too much. I have been merchant door to door for 8 years now, and there is only one way to connect with them. You need identify a problem they have, find how you can solve it, and be the genuine person that really wants to help them by getting it for them.

Merchants see a salesman from a mile away. You can't be a salesman. You need to immediately be their friend that is looking to help. You can only do that by asking them what they need. You can only do THAT by respecting their time, asking when they might have time to sit with you so you can discuss how you might be able to help. And ALWAYS look around to see if there is an idea you can give them.

Annette Tonti Founder, President at The Start Exchange

March 24th, 2015

Agree 100% with Julien. Data shows that most local businesses get 30+ contacts each month for marketing services.

Consider they used to pay 1 check to the Yellow pages per year - that was it, that was the only game in town. Now they have to understand how to get a website, listed in every directory, social media accounts, manage their reputation - etc. It is overwhelming to most of them... also by now, many of them have been either duped into buying something that didn't work or really were not given proper expectations of how the digital marketing activity will work for them.

One trend is clear- they like personal visits or phone calls AND they very much have expectations that the sales person will have some vertical knowledge of their industry. "We find Salons in your area can expect XX phone calls per month" or "Other auto repair shops we work with get XX leads using these methods"... its hard, detailed work for sure.

Jessica Alter Entrepreneur & Advisor

March 21st, 2015

Can you be much more specific ? What kind of merchants and what's the issue? Sent from my iPhone

Roy Gonzales CEO at Zobily

March 21st, 2015

We are looking to add small merchants that are looking for new or more consumers to shop at their stores for a discount. We have many national partners that you can shop at and get a discount from the purchase but when you share that merchant from our app you earn revenues when your friends shop at that merchant. We now want to add small merchants and it doesn't matter what type of merchant.

Brad Cooper

March 21st, 2015

What is your unique selling proposition (for consumers and for merchants) that sets you apart from the dozens (maybe hundreds) of other discount/coupon/deal/social share apps and websites out there? Realize that all these hundreds of companies also want the mind share of these same merchants and call and email them all day long.

Roy Gonzales CEO at Zobily

March 21st, 2015

The current apps do not track their consumers purchases and allow them to earn actual revenues from sharing that consumers purchases with their family and friends for one. Two we actually allow the consumer to rate the merchants based on an actual purchase. Third our platform has no cost to the consumer or merchant.

Brad Cooper

March 21st, 2015

Ok, cool. So, the questions that I'd anticipate from merchants are: how do you make money? What do I have to do? What do customers have to do? Unless it's super easy (for both) and doesn't require new POS or someone to register their credit card or payment method, it's slow going.

For me, the revenue from my friends angle always conjures MLM, ie, you are just recommending this merchant so you can earn some cash, which brings down the value of the recommendation, IMO.

Start with the merchants you shop at and get them to try it and give you feedback. Build one at a time until you have momentum to scale.

Roy Gonzales CEO at Zobily

March 21st, 2015

Small merchants spend $264B in marketing every year with no real idea of what works and what doesn't. We deliver actual paying customers to shop in their stores for a discount. They must do NOTHING different! The consumer must do NOTHING different! The merchant gets data on the customer shopping and the consumer earns for sharing that merchants store.

MLM is where you must buy and sell something. What we are doing is what consumers do now without getting paid. 72% of consumers make a purchase decision based on social media so we pay them when their friends shop I feel there is no comparison between this and MLM as there are no fees.

Brad Cooper

March 21st, 2015

So, if neither the consumer or merchant have to do anything, I guess you've acquired them already.

guessing it is a CLO. So credit card companies give you a cut? Merchants like to know how you make money and if you can't explain how it works simply, you lose them pretty fast.

Have you tried signing up some of your favorite local stores? If so, how has that gone? If not, why not?