The Key To Success In Local Lies In A Vertical Approach

Vertical offerings are playing an increasingly critical role, not only in attracting consumers and directing them to relevant local business listings, but also in providing consumers with the necessary tools to evaluate and directly make purchases.

As verticals better enable consumers to simplify, speed up, and complete their path to purchase, local businesses need to ensure they have the framework in place to capture these new lead opportunities.

Categories Have Always Been Important

Over the years, local players have emphasized the importance of category search as a way to improve and quicken the search process.

SuperMedia’s SuperPages mobile app (above, left) has long provided a “wheel” approach for finding listings in specific categories. YP’s mobile app (center) has also offered broad categories like “Restaurants,” “Pizza,” and “Movies” as starting points to search.

The latest version of the Google Maps app (right), launched this month on Android and Apple smartphones and tablets, incorporates a new “Explore” feature that encourages users to browse and discover new places under categories like Eat, Drink and Shop. Broad-based local players have also launched vertical directories for categories ranging from new and used cars to gas and convenience stores.

These tools have helped local businesses attract ready-to-buy consumers within their individual categories. Consumers can view a business’ location, open hours, reviews and a range of other critical information (for example, menus for restaurants) influential to their purchasing decisions. By also featuring the business’ telephone number and website information, local businesses have benefited from the referral of consumers who are making a decision or making a purchase.

Advanced Vertical Offerings Closing The Purchasing Gap

At our Local Search Association “Search Starts Here” conference in April, several local search leaders, including Solocal CEO Jean-Pierre Remy and former CityGrid CEO (and co-founder of Seamless) Jason Finger, predicted an even greater shift toward verticalization in the local space with the growth of commerce services. They highlighted examples of what I’ll call “advanced” vertical offerings, like OpenTable for restaurant reservations and ZocDoc for scheduling doctors’ appointments.

These verticals provide commerce tools that enable consumers – after finding and evaluating a specific product or service – to complete actual purchases or make reservations right on their sites. Essentially, these verticals close the purchasing gap that has existed between consumers viewing a business listing and possibly contacting that business, and following through with an actual sale.

The increased focus on verticalization in the local space within these past few months has been significant. Broad-based local players are beginning to partner with verticals to augment their own listings, while verticals themselves are consolidating to keep their hold on their specific categories.

• This month, Groupon announced Groupon Reserve, a service that will initially allow users to book discounted restaurant reservations through Savored.com, a popular restaurant vertical, in 10 cities across the U.S. The service plans to add bookings for spas, salons and hotels to its offering as well.

• Yelp just announced Yelp Platform, a tool that enables users to leverage existing advanced vertical offerings to make purchases and reservations directly from Yelp’s local business listings. Yelp has initially partnered with delivery.com and Eat24 so its users can order food directly from restaurants signed up with those verticals. This is in addition to Yelp’s existing relationship with OpenTable for restaurant reservations. In the coming months, Yelp said it will add scheduling availability for new categories including spas, yoga studios, salons and dentist appointments by leveraging business management tools from Booker, Demandforce, and MINDBODY.

• Seamless and GrubHub, the two leading online takeout and delivery verticals, announced in May that they are planning to merge their online takeout and delivery requesting services, extending their reach to more than 500 U.S. cities.

What Local Businesses Should Be Doing

The rise of verticals presents some real opportunities and challenges for local businesses. For example, while local businesses benefit from secured leads delivered through verticals, they also lose a share of revenue for the referral. Given the pace of change we’re seeing, it’s vital that businesses in popular vertical categories take a hard look at their current strategy and ways to strike the right balance of engagement.

There are three key areas to consider:

1. Ensure Updated Business Listings & Proper Categorization

Consumers leverage a variety of online/mobile local media sources to find local business information, ranging from search engines to local sites. With increased focus on verticals and commerce solutions, local businesses should ensure that their basic information on all possible listings sites are up-to-date and as comprehensive as possible.

You should also make sure that you select the most targeted category possible on each listing site so you appear under the best possible heading describing your business (e.g., choose “Sushi restaurant,” over “Asian restaurant”).

2. Explore Vertical Offerings

Local businesses should explore all options to be listed on vertical sites alongside their competitors. Businesses should look at what partnerships each vertical has with broader-based local sites, and vice versa. The risk that local businesses have in being listed on a broad-based site, but not with a vertical partner, is that users looking to complete their purchase or schedule an appointment right on the site may pass over the listing in favor of a competitor that is engaged with the vertical.

You should also consider what partnerships broad-based sites have with larger search engines (e.g., Yelp fuels Apple Maps).  And, with the space continuing to evolve rapidly,  keep a close eye out for future partnerships that impact the verticals you work with.

3. Manage Online Reviews

Whether it’s in a listing on a broad-based site without a commerce option, or a vertical with a commerce option, local businesses should closely manage their online ratings and reviews. Broad-based and vertical sites all provide strong visibility for ratings and reviews, which research has shown are extremely influential in consumers’ purchasing decisions. For example, the new Google Maps app prominently displays businesses’ ratings (out of 5) on its listings.

Additionally, many broad-based and vertical sites factor ratings and reviews into where listings appear in search results. According to Yelp, its search results are, “based on an algorithm that is designed to provide the best results based on a number of different factors including review text, ratings, and number of reviews.”

With this in mind, local businesses should make it a matter of policy to ask their satisfied customers to fill out online reviews on a range of popular broad-based and vertical sites. You should also try to minimize the number of negative reviews you receive by dealing quickly and effectively with negative feedback.

Respond to negative posts with an apology and clear steps on what you will do to either rectify the situation, or do better in the future. For additional details on how to handle online reviews, check out my colleague Neg Norton’s previous post on how to navigate online reviews.

By ensuring accurate and complete business listings, engaging with vertical sites and managing online reviews, local businesses can take a big step forward in positioning themselves for success.