Should I Renew My Yellow Pages Listing For My Small Business?

Is that a questions you are struggling with right now?

Have you been advertising in the Yellow Pages hardcopy and/or online for years but now you’re thinking of cancelling?

Do you suspect you are wasting your money, but you are shit-scared that your business will completely dry up if you stop paying them thousands of dollars every year?

Snap out of it sucker.

The free one-liner with your phone number is all you need.

(Except if you’re a plumber. If you’re a plumber then buy a huge expensive ad because when older people have a plumbing emergency they panic, dig out a 3 year old copy of the Yellow Pages out of a drawer, and call number after number to find someone that can come right now.)

How To Find Out For Sure If Your Yellow Pages Advertising Is Not Working

Measure it.

  1. Ask every new customer how they heard about you
  2. Add up all the mentions of “Yellow Pages” in a year (or in a month and then multiply by 12)
  3. Divide that number by 4 (I’m assuming your conversion rate is 25%)
  4. Multiply that number by your average revenue per customer over a year
  5. Divide that number by 4 (I’m assuming your Net Profit is 25%)
  6. That’s how much Yellow Pages is worth to you to break even. Don’t spend a cent more than that. If the customer buys from you again next year, that’s your gravy to keep.

Eg For XYZ & Co:

  • 12 mentions per year
  • 12 / 4 (a conversion rate of 25%) = 3
  • $100 revenue x 3 = $300
  • $300 / 4 = $75 ad to break even in the first year

Eg for ABC & Co:

  • 120 mentions per year
  • 120 / 4 (a conversion rate of 25%) = 30
  • $1,000 revenue x 30 = $30,000
  • $30,000 / 4 = $7,500 ad to break even in the first year

So, if you’re not a plumber:

5 Reasons Why You Should Quit Advertising In The Yellow Pages (hardcopy)

  1. Just because you’ve been doing it for 10 years doesn’t mean that you should keep the momentum up. That momentum is in the wrong direction!
  2. Just because your competitors are doing it is not proof it works, it only means they are suckers too!
  3. Because 12 month contracts suck so bad. They put a huge amount of high pressure sales tactics into getting you to sign up because they know that you won’t bother measuring the effectiveness of the ads over the coming months because you fear that if you did, you will actually find out you wasted your money and you’ll feel like a fool, so you don’t bother, because you want to save yourself the embarrassment. No one likes to realise they made a huge financial mistake. And you can’t cancel anyway because it’s in print. And you don’t have to worry about it until next year anyway, so you forget about it.
  4. Because the amazing discounts that the sales reps offer you at the last minute when you just told them you want to cancel aren’t actually amazing, they are just a clever sales pitch. A 70% discount on advertising that doesn’t work isn’t going to make it work!
  5. Because you shouldn’t support an industry that prints millions of books with thousands of pages and dumps them on the doorsteps of millions of New Zealanders every year that didn’t ask for the books in the first place. It’s junk mail on an enormous ecologically-damaging scale

What about online Yellow Pages?

Why You Should Not Advertise In Online Yellow Pages

Because it’s a rip-off.

And it’s so easy to test and measure for yourself:

  1. Open up your webstats for the month and find any click throughs to your website from Yellow
  2. Divide that number by 10 (I’m assuming your visit to enquiry rate is 10%)
  3. Divide that number by 4 (I’m assuming your enquiry to sale conversion rate is 25%)
  4. Multiply that number by your average revenue per customer over a year
  5. Divide that number by 4 (I’m assuming your Net Profit is 25%)

Eg For XYZ & Co:

  • Cost: $60/month
  • 10 clicks per month
  • 10 / 10 (a visit to enquiry rate of 10%) = 1
  • 1 / 4 (a conversion rate of 25%) = 0.25
  • $100 revenue x 0.25 = $25
  • $25 / 4 = $6.25 is what the advertising is worth to you a month just to break even but you’re spending $60…

Eg for ABC & Co:

  • Cost: $80/month
  • 50 clicks per month
  • 50 / 10 (a visit to enquiry rate of 10%) = 5
  • 5 / 4 (a conversion rate of 25%) = 1.25
  • $1000 revenue x 1.25 = $1250
  • $1250 / 4 = $312.50 is what the ad is worth to you to break even and you’re spending $80… hooray! That is actually worth it in this example

You probably don’t need another reason, but I will share one theory with you.

I think that people are suspicious of ads or “promoted listings” on the Yellow Pages website.

They think to themselves “don’t get up in my face, I will decide who is best to serve me. My list of decision criteria does not include the item ‘whoever pays the most to be up in my face’ “.

There isn’t that level of distrust with a Google search because the ads are actually helpful. They are relevant. They are in context.

And just like Google Adwords, a fairer way for Yellow to offer you online ads would be to offer you the Cost-Per-Click model too. You could set your bid price and an algorithim could calculate who’s ad will show.

But you won’t see such an offer for Yellow because it makes it too easy for you to quit. You could run it for 1 day, or 1 week and spend $20 and you’d have enough information to decide to quit or not.

Yellow doesn’t like that. Yellow likes to lock you in for 12 months and works really hard at making sure you don’t measure effectiveness.

What do you think?

Have you recently quit and now feel good/bad about that decision?

Are you struggling with the decision right now?

Have your say in the comments below.

4 Replies to “Should I Renew My Yellow Pages Listing For My Small Business?”

  1. I don’t doubt that YPs are passé, however there is a flaw in your reckoning formula. You can’t blame the postman if he has delivered the mail correctly and then the receiver doesn’t either read or reply to the mail. A directory is just another form of a media and as such, can only put your message (contact details etc) in front of prospective customers. If you are getting visitors, but not getting enquiries, then you need to check whether you are getting the right type of visitor and / or the message that you are greeting them with. If you are getting enquiries, but not getting conversions to sales, then you need to look at your sales pitch.
    So if a directory is delivering your contact info to the right type of propective customer, then they have done their job.
    Don’t shoot the messenger.
    Tell the messenger / media “exactly” who you want the message delivered to. If they deliver to the right people, then the rest is up to you to ensure that the message reads right and that you have a good conversion process in place to handle the enquiries.
    It is so easy to blame the media type.

    1. Hi Mike, thanks for your input on this.

      Likening the Yellow Pages to the mail man is generous. A mail man puts the consumers mail in a mailbox that they own and no-one else accesses. Every piece of mail has got a really good chance of being looked at by that consumer.

      My problem is when the mail man thinks “screw this, I can’t be bothered today” and dumps the consumers mail in a public rubbish bin. Now it’s the consumers job to realise the mail is missing, and to search all the rubbish bins in the city trying to find it. Yellow Pages is more like that I think.

      I just think small business owners should spend money on crafting excellent messages (like you said), and then making smart choices about where that message is placed.

      1. ALL THIS FROM AN UNSUCCESSFULL EX RADIO PERSON WHO HAS NEVER BEEN IN BUISNESS AND IS TRYING TO PROMOTE HIMSELF WHAT AN ABSOLUTE LOSER YOU ARE SHELDON

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