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Hey Publishers: Time to Take a Closer Look at Business Process Services

At the 2013 LSA event in Las Vegas I participated in a session called “State of the SMB Union.” One of the points I tried to make was that directory publishers and others offering marketing services to small business owners should diversify into transactions and business processes. So far that hasn’t really happened.

It’s starting to happen in Europe. Last week at the SIINDA conference in Munich a number of local media publishers discussed integration of scheduling and other transactional tools into their sites (or subsidiary verticals). Scheduling and appointments were the most common and are the obvious first step into this arena.

I’m frequently told by Europeans that US market is seen as “two years ahead.” However in terms of these transactional/operational services, this is not the case.

It’s very true that in the US market there are a many startups and vertical “marketplaces” offering scheduling, payment processing and other types of services for SMBs. However most of the larger SMB sales channels have not yet embraced or integrated them.

HomeAdvisor’s recent acquisition of Mhelpdesk is an example of what I’m describing. It’s essentially a CRM tool that helps SMBs manage their field service operations more efficiently. It provides scheduling, work orders, job tracking and invoicing. HomeAdvisor is going to sell this on a subscription basis.

These tools and services are quite different than managing AdWords for SMBs. Lead generation is very important but bringing greater efficiency, loyalty and retention capabilities to these businesses is probably more valuable.

DemandForce (now part of Intuit) is a high-profile example of a company that started as a CRM tool for dentists (appointment reminders) and leveraged that into a range of marketing services — and then got bought for a lot of money ($420 million)

Local home services marketplaces MyTime and Serviz (formerly ClubLocal) offer scheduling and payment processing, essentially extending e-commerce to offline services. While the explicit model for Serviz is Uber, the use of these tools brings efficiency and removes friction from the buyer-seller interaction. We might call these “local commerce services.”

In the particular case of scheduling, there have been well over a dozen startups over the past several years that have tried to bring online scheduling (a la Open Table) to the SMB market, mostly in a vertical context.  Few have achieved success because of lack of consumer scale and challenges in getting SMBs to adopt.

ZocDoc is an exception, but it’s a consumer destination and not a tool vendor. Startup Pingup is now trying to aggregate all those scheduling services and syndicate them to consumer-facing sites and apps.

There are also an increasing number of payment solutions for SMBs in the market. One of the most visible is Square. It has transitioned from simply enabling credit card acceptance to a host of business services, which include:

  • iPad based POS system
  • Scheduling and invoicing
  • An e-commerce marketplace
  • Receipt based customer feedback system
  • Business loans

Square becomes much more central and valuable to SMBs that use its services than some digital agency managing online marketing. Website hosting may be the lone product exception, which is harder to abandon, among the current suite of services sold to SMBs.

Apple Pay is also set to potentially shake things up by making e-commerce in mobile apps much easier for consumers. I anticipate many more in-app payments for offline services in the future. This is part of the blurring of online and offline commerce.

Yelp has also diversified its offerings to incorporate transactions, which include scheduling and food delivery. These services, which are generally provided via third-party software, currently aren’t “monetized” by Yelp but they make the site more valuable to business owners because it’s facilitating actual sales and not simply generating leads.

At SIINDA there were two startups exhibiting (vCita and Camilyo) that offered white label business process solutions for direct integration into SMB sites and/or third party directory or vertical sites. Camilyo leads with its mobile and PC presence products but its business process services aren’t far behind: e-commerce, scheduling and so on.

I could go on with more examples.

While most SMBs have been slow to incorporate online scheduling these kinds of tools and services should be closely considered by publishers that sell marketing to this population. That’s because eventually these tools will be common, probably driven by increasing consumer demand (especially scheduling and payments).

In addition to providing value to SMBs they improve retention because these tools and services are much closer to the core business operation than conventional digital “marketing solutions,” which increasingly sound interchangeable.

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