How customer focus can create lasting startup success

ben-rubenstein-yodle

Carlsbad Flower Field © by Akaporn Bhothisuwan (2007)

The first year for any startup is a hard one.  And in 2005, it was no exception for Yodle.

When we launched, we had zero dollars in revenue, but our company—which helps local businesses connect with new customers searching for their services by making online marketing easy—was ready to seize the moment.

The trouble was that back then, only four percent of small business marketing budgets were spent on online marketing, despite the fact that almost two-thirds of consumers were using the Internet to find the services they needed. This was (and still is) a huge market opportunity for the 22 million small businesses in the U.S., and we were ready to go after it!

Initially, our plan was to work with all local businesses, regardless of the service they provided—from doctors to florists and everything in between. We hired, trained and deployed our sales team, and after just six months, we had several hundred customers and some real momentum.

But, as we began launching our clients’ campaigns and getting their feedback, we noticed their satisfaction varied greatly by their particular industry. We decided to analyze campaign data across all of our clients to identify any patterns or root causes for the variance. The analysis shed more light on the feedback from our clients in that it showed that due to certain nuances, industries like healthcare and home improvement performed better than others.

Now that we had this data point, the question was: what changes were we prepared to make? On one hand, we had hundreds of small business owners with money to spend that were ready to sign up for our services. On the other hand, we knew that our service would not provide enough value to satisfy them long-term. This decision had major financial implications and also required alignment across our entire leadership team. We worked as a team and came to the agreement that customer success needed to be the focus and we would sacrifice short term benefit. Sounds easy, right?

It took some time and a lot of explaining, but we all started getting comfortable with this new customer-focused strategy. After just a few months, we noticed that most people on the team had built a lot of industry knowledge. This was an unexpected benefit that started to measurably improve our ability to both sign up and serve these industries. Our sales team started gaining valuable insights like what services were most profitable to dentists and how lawyers measured their marketing performance. Our marketing specialists also started leveraging more and more campaign data that uncovered new online marketing techniques. For example, we found that attorneys who mentioned they speak Spanish in their ads and dentists that promoted a free consultation had higher response rates.

At the end of the day, the most crucial advice we can offer to a startup is that relentless focus on customer value, no matter how painful it may be at the time, is the only way to be successful in the long-term. Who would have thought that the turning point for Yodle’s growth would have come when we started refusing money from small businesses?

Now, six years later, our dedication and our “customer focus” has paid off—helping to make our company the largest independent local online marketing firm in the U.S., with a 700-person, world class team, serving more than 24,000 small businesses.

Ben Rubenstein, RVP of Local Sales and John Berkowitz, VP of National Sales are two of Yodle’s co-founders. They have been working with the company since its beginning in 2005. They are both members of The Young Entrepreneur Council (YEC), an invite-only nonprofit organization comprised of the country’s most promising young entrepreneurs. The YEC promotes entrepreneurship as a solution to youth unemployment and underemployment and provides its members with access to tools, mentorship, and resources that support each stage of a business’s development and growth.

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