Archives for July 2006

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Is The Yellow Pages A Money Machine Or Fools Gold?

By Hugh Geiger from

This article is a brief discussion about usage patterns and investing in the Yellow Pages (print) directory. It’s something of an institution for many small business owners, and I know that many owners out there are terrified at the idea of not running the biggest possible ad they can afford. So far though, I’ve never spoken to a business owner who could substantiate their belief in the power of the Yellow Pages to generate business. The normal answer I’ve been given is ‘yes it works, no I don’t know how well’. Considering the pricing, I would hope it works damn well! It’s easy to drop $20K+ on a few inches of paper.

This got me pretty curious. So just over a year ago, I ran a small consumer survey for friends, family, and an online community I was involved with. I wanted to learn about where people were looking to find services (not products). I got about 60 responses, so not exactly a huge survey, but good enough for my purposes. It attempted to collect the following data from survey participants:

  • Where people look when they need a service
  • After listing a number of different services, it asked them to prioritise the information sources they used when deciding who to use (i.e. Where’s the first place you would look, second place etc).
  • Asked them to record when was the last time they had used a given information source.
  • It counted consumer transactions only – not B2B

It was presumed that each point of reference would only be used if the preceding reference did not provide a satisfactory answer. This means that if you’d had a past experience you were happy with, you were unlikely to ask a friend. I realise that it’s possible for a prospect to ‘skip’ a point of reference or be swayed by a particularly appealing advertisement, but this behaviour is way outside the scope of what I was doing.

In terms of where people reported looking, the average order was:

1. ‘Past experience’ (unsurprisingly) was by far the most common first point of reference.
2. Word of mouth referrals from friends
3. Word of mouth referrals from colleagues
4. Word of mouth referrals from family
5. Businesses that they had noticed in their local area but never been to
6. Current media advertising such as television / radio
7. Yellow Pages
8. The Internet
9. Local newspapers / magazines

In my opinion, these results reflect the relative value and trust that people place on information sources when looking to purchase a service. ‘Good Service’ is a very subjective thing, and personal opinions are far more important then advertising messages when we’re deciding where to buy.

These results (for me) put a new perspective on the value of the Yellow Pages directory. It strongly suggests that your $5-$10K+ investment only has a chance of being looked at if the prospect exhausts other more reliable sources of information. Then, they have to notice you from amongst a crowd of similar providers in a directory that is not even strictly alphabetical. That’s a lot of cash just to be in one of the last places a prospect will look.

I tested this across a range of different services, and found this to be true for most industries. However, there were a few exceptions. Businesses that provide emergency services and other situations that don’t lend themselves well to word of mouth or are too localised for the Internet, may benefit significantly from a strong presence in the directory. These are discussed in detail at the end of this article.

I see you, but I don’t trust you…

Your ad, no matter how big, doesn’t buy you a lot of trust. A side effect of being discovered via a less reliable information source, is that the prospects generated are going to be far more weary then those that have been referred to you by word of mouth. You’re going to get more tyre kickers and comparison shoppers and there will be more price sensitivity. Remember, anyone who finds you in the directory immediately gets a very good grasp of just how many competitors you have. They’ll make you work for their business. Which brings me to my next point…

Do you actually measure your response rates from the Yellow Pages?

…Or even better, have you kept a record of the number and value of sales it generates?

I have yet to come across a small business that effectively measures this. Many people take it for granted that it ‘just works’. Ad pricing is different depending on category, and I don’t have the exact figures handy, but to get a quarter page sized advertisement with a bit of colour, you’re probably looking at around $7500 – $10 000(AU).

If we assume a 35% gross profit margin in your business, your advertisement is going to need to bring in $21,428 – $28,571 in annual sales just to pay for itself.

If your ad in the Yellow Pages is a major part of your annual marketing budget, spend 3-4 weeks to test its effectiveness. Find out how they discovered you, and write down how much they spend. You might be surprised.

But they have HUGE distribution right?

Just looking at the website, aside from being in every Australian home and business, it quotes some extremely impressive figures:

8 million unique users of its print directory each month
2 million unique users per month on its website

Whilst it’s hard to dispute independent web stats, I still have some significant doubts about the accuracy of the print usage figures. Combined, these figures equate to 1 in 2 people in Australia using their service every single month! This very strongly contradicts my own research, and isn’t supported anecdotally from the people I’ve spoken to… but I’ve been wrong before. When was the last time you used the Yellow Pages (print) directory? (aff)

It may work really well for some…

The Yellow Pages seems to be primarily used by people trying to find a new service provider. Your existing customers are not likely to use it. If your business relies on a steady stream of clients new to your area, and does not build good relationships with existing customers easily, then the Yellow Pages may be a good option for you. Here’s a broad (not exhaustive) list of characteristics of businesses that will likely benefit most from a large presence in the directory:

  • You provide emergency / rare use / niche services
  • You are in a regional area, or your customer base is highly diffuse
  • The types of service you provide are not conducive to word of mouth referrals
  • You are unable to establish a strong relationship with your customer
  • You sell a commoditised / impersonal product or service
  • You are primarily a business to business (B2B) provider*
  • Your product / service is not easily promoted via the web
  • You primarily service people who are new to your area

*while this was not the subject of the survey, anecdotally it seems B2B prospects are more likely to use the Yellow Pages then average consumers.

What should you do?

With rapidly increasing Internet usage, I think that businesses that rely heavily on the print directory for new prospects are going to struggle in coming years, if not already. It’s a given that newspaper classifieds are dead or dying- superseded by the Internet. It’s not a huge stretch of the imagination to see that the heavy, disorderly, 2000 page golden brick is going the same way…

On that note, when was the last time you heard about a small business’s growth ‘exploding’ after an advertisement was placed in the Yellow Pages? It doesn’t happen, because it doesn’t work like that. It’s a highly competitive environment, the playing field is uneven, and the consumers its attracts are either looking for a deal, or don’t care who you are ‘cause they want it fixed yesterday’.

I don’t doubt that it generates traffic, but I question the quality of the referrals Vs word of mouth referrals, and also the risk presented by the size of the investment you are required to make. If Google said to you, “Give me $10K, I promise to put you in front of customers, but I can’t tell you who or how many, or even if they like your ad, AND you can only change it once a year” would they be a billion dollar company today?

In my opinion, the value presented by the Yellow Pages (print directory) is very questionable for a small business. I’m not saying that you should blindly go and dump your ad… but if you invest a large amount of money in the print edition every year just because that’s what you’ve always done; take a moment to re-evaluate your investment. Do some research, and determine if it *really* works for you.

Most businesses will be better off if they invest in ‘word of mouth generation’ by improving your service quality, building a stronger customer relationships, increased branding, and implementation of referral incentives. Look after the customers you have and give them a reason to talk about you. You’ll be rewarded with far more growth then a phone book can deliver.


Hugh Geiger

I’m a Canberra based entrepreneur with a passion for effective management systems and customer service delivery. I’ve started doing some small business coaching, and my blog is dedicated to discussing the issues, tools, and trends that are relevant to me and hopefully other small business owners.

Do Quality Work To Build A Quality Brand

Welcome to the first of the guest contributions for this month here at Small Business Branding. Over the next few weeks you will see a few different authors posting articles on this blog. Enjoy! – Yaro


By Todd Richardson from – People are cashing in all around you. Don’t you think it’s your turn?

Building and defining your brand is one of the most time consuming projects that businesses tackle. It might even be something that you worry so much about that you lose a significant amount of sleep. Perhaps though, it is something that really small business owners shouldn’t worry about at all. If you work to produce the best product or service every time you do something, your brand will be reflected in a positive light. Even when you don’t necessarily produce your best work your brand is still reflected, so in fact branding is not something you need to consciously think about at all – you create one just by running your business.

Of course a tangible brand, such as a logo or name, has to be visible at some point or another for people to associate your hard work with your company. You are certainly not doing yourself any favors if you have the best roofers in town, but nobody knows who you are.

When you first start out, it is more important in my eyes to do a quality job. It is in your power to under promise and over deliver. As you get the bugs out of your operation and develop an actual foundation that your business can run on smoothly, then it’s time to move on to getting your business name on things.

Why should you spend hundreds of dollars to raise the awareness of the name of your company before you and your employees are competent and efficient at your task? I’m not saying that you are going into business to do something you aren’t competent, but merely pointing out that the more you do something the better you get at it.

It makes sense to build up your team’s skills and confidence levels before sticking your brand name on it. Think of it like research and development. Coke doesn’t simply take a great new idea for a soft drink and throw it out the next day with their name on it. They would research the market and demand first to determine if there is room for the new soda and how they can fit into that niche. Then they would take it to potential customers to take a taste test. Then they take it back to do more research and the process can repeat itself multiple times.

By all means don’t get yourself into an endless loop, but rather refine your brand and it will begin to take shape based on your values.

Once you have your brand’s virtues established this way you can then move on to building and expanding it. Building your brand is extremely important, but during the first six months or so it’s more important to build your business.


Thank You Sponsors And Network Recap – June 2006

Well another tax year has been and gone. July marks the dawn of tax year 06-07 here in Australia and as I reported at Entrepreneur’s Journey, my small business is actually going to turn a profit.

June wasn’t a huge month in terms of blogging at Small Business Branding. I think the highlight for me was definitely the two part podcast series with Daryl Grant on setting up an e-book business.

In July I’ll be having a mini-break from blogging but the content won’t stop. I have a few articles lined up from some great guest writers and I suspect I’ll have another podcast or two as well. I’m not actually leaving my computer though, I’ll be online everyday finishing up work on Blog Traffic School ready for the alpha testers to take a preview look at it.

As per usual subscribing through the RSS feed is the best way to keep up to date with the latest content published to this blog. The subscription feeds are available from the top of the right sidebar at

Thank You Sponsors

Thanks to these people and organizations who sponsored my blogs during June. If you are interested in sponsoring please see the Advertise section.

GetResponse Email Autoresponder – Market leading autoresponder and email broadcast management system.

Australian Business Review – Business analysis, business coaching and business consulting for small to medium enterprise.

GoBIGnetwork – If you are looking for startup capital search this network of Venture Capital, Angel and Private Equity Investors. – Buy and sell digital content, including eBooks and Legal Forms.

Great FX Business Cards – Providing Raised Print Business Cards and Business Card Holders.

Content Recap

Here’s the best stuff from June at Entrepreneur’s Journey

Entrepreneur's Journey

Has AdSense Gone Too Far? – This article struck a cord with a lot of readers. There are certainly some strong opinions out there on how AdSense is impacting the Web. In this article I put some of my own thoughts about the issue on to blog paper.

Podcast: How To Make $250,000 A Year Selling e-Books – Interview With Daryl Grant Part 1 and Part 2 – I’m really enjoying the podcasts lately and this two part series was great fun to create. Daryl and her husband Andrew have had fantastic results selling e-books online and in this interview Daryl spills all kinds of details on how they do it.

It’s Time To Reduce Your Stress – I started thinking about stress and time and this article was the result. I don’t have many stresses in my life and removing time based deadlines is largely why. This article looks at how I make this work for me.

6 Tips To Reduce Your Stress – Continuing the stress reduction theme I offered some practical tips I currently use to reduce my stress.

Audio: How To Do A Successful Product Launch – Interview With Michael Cheney

Download PodcastDownload the MP3 [ 50 Minutes – 11.6 MB]

Michael CheneyMichael Cheney catapulted into the Internet marketing spotlight after the successful launch of his AdSense Videos (aff) course. Shortly after completing the launch of this product Michael released another set of videos for free which offered a behind the scenes look into what happened during the days leading up to the product launch and during the launch. It was quite fascinating to watch the money come in and see what goes on in the background of a product launch online.

I got in touch with Michael to ask for more details about doing a product launch and to find out how Michael become an online information marketer and AdSense guru. If you want to learn more about how Michael arrived at the position he is at today and also some really good stuff about product launches you will enjoy this podcast.

Show Notes

  • The first half of this interview is an introduction to Michael Cheney and how he became an Internet marketer
  • We then moved to some very specific details about doing a product launch, including –
    • How to set up the affiliate system
    • Why he chose Clickbank (aff)
    • How he found joint venture partners
  • We finished up with some advice on becoming an Internet marketer

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