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The Kelsey Report® White Paper

Yellow Pages and Local Services: Common-Sense E-Commerce
Charles Laughlin , 9/1/2000

EXECUTIVE SUMMARY:

Yellow Pages publishers face a classic opportunity/risk scenario when dealing with local service-based businesses.

These businesses, most of which are small and virtually all of which are fulfilled locally, confront a gradual diminution of the effectiveness of Yellow Pages advertising as references decline and advertising rates rise. Along with rising ad rates, size and seniority systems have led to fewer, larger advertisers dominating key directory headings. One byproduct of this trend has been that many smaller service businesses have opted out of the directory.

Increasingly, local service businesses, especially those that feel priced out of the print directory, are turning to less costly but inefficient lead-generation methods like direct-mail, door-hangers, coupon books, and door-to-door and telephone canvassing.

This situation - a lack of affordable and efficient lead-generation tools - has opened up a big opportunity for online and wireless-based services that can provide targeted, qualified leads and a low-cost per customer acquisition.

The Kelsey Group is bullish on the local services space. We see real value in delivering targeted leads to qualified merchants, or in redirecting resources devoted to appointment setting to more revenue-oriented pursuits.

Yet the space faces a shakeout. Dozens of companies have cropped up offering e-commerce services for local service-based businesses. Only a handful of well-funded players will gain enough momentum to survive over the long haul.

Because Yellow Pages sales organizations focus on service-based businesses and because print and online directories generate targeted, "need it now" look-ups, many players in the services space have turned to Yellow Pages organizations as their partners of choice.

For Yellow Pages publishers, the issues are simple though the solutions aren't: Find the right partner, make the offering easy to sell and go out and sell it. It's also clear that Yellow Pages publishers need to live up to their promise as the natural channel in this space. Otherwise, the surviving local services companies will evolve into formidable competitors.

Copyright � 2005 The Kelsey Group. All Rights Reserved.
This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under Federal law. The Kelsey Group disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

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Copyright© 2006 The Kelsey Group. All Rights Reserved.