Mike Blumenthal & Mary Bowling take a Deep Dive into the changing landscape for Service Area Businesses (SABs).
This is our Deep Dive Into Local from Sept 20th, 2017. In our Deep Dive series, we take a closer look at one thing in local that caught our attention and deserves a longer discussion.
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Mike: Hi. Welcome to this week's Deep Dive into Local with Mike Blumenthal and Mary Bowling. This week, we're going to talk about the changing landscape for service-area businesses fictionally known by Google as SABs. SABs are interesting because they don't have a specific physical presence that a customer can go to. By definition, they only do on-site service, whether it's a plumber or a locksmith or a roofer, they typically don't have any ability to accept walk-in traffic. So, I don't know if you remember back in 2008, Google, one of Google My Business leads stood up in a SMX and said, "Oh, just go get a P.O. Box." Well, that was the beginning of an avalanche of spam in that industry, and I think Google struggled with it. And there's a tension within Google, as well, because the map people believe that a map is a metaphor for physical reality and they never -- like in Mapmaker, you couldn't list SABs -- but the business listing folks felt like there were a lot of businesses that consumers wanted to know about or learn about that they wanted to list that maybe wouldn't show, so ultimately Google developed this ability to hide the business address so that somebody wouldn't drive there. I think ... was it 2012?
Mary: I don't remember the exact date, but the problem started when they decided they were going to put a layer of businesses over the map. They never considered small, service area businesses at all.
Mike: Right. Well, and very few other directors do either, though.
Mary: So it's always been a struggle all these years of service area businesses pushing to try to get some coverage at Google, some exposure at Google and doing whatever they could do to make that happen, and a lot of times it was something that wasn't really kosher.
Mike: Yes. And it also became a vector for spam. Initially, when Google allowed bulk uploads, there was massive amounts of service area businesses that got bulk uploaded. And then somehow, because it was difficult to do -- you know, email verification and then people, once Google figured out that they could do a postal verification, I mean, and then they were doing phone verification that led to a lot of abuse and Google switched to postcards and that then led to abuse of creating fake locations. Then Google started constraining how close these locations could be and still get verified, but it's been this sort of whack-a-mole with Google and spam in the service area business, which -- and then a lot of lead generating companies got into it.
Mike: Particularly, combining Ad Words with Google Local to sort of take over many industries -- and to the detriment of real businesses in those markets. Google responded in late 2015, middle of 2015 with the Home Service ad unit as a test in the San Francisco Bay area. This involved a unit, an ad unit that required what was called advanced verification, and they required at the time additional verification of the business so that the business had to really prove to both get the local listing -- actually, this was in San Diego later. They rolled out the HSA ad and then they rolled out advance verification in San Diego, where the business had to prove to even get into the local listings that they were, in fact, a real business through Pinkerton and employee Pinkerton Inspections, as well as licenses. That advanced verification to get into local listings is no longer in play in these new markets like in Philadelphia. They are, however, doing this advanced verification for the AdWords. I assume that they think that a lot of the cheating is coming out of AdWords as well, which we did see.
Mary: Yes. We did see.
Mike: In these new markets, as I've pointed out in this article on my blog in a former post, when they move into these new markets, SABs are no longer showing in the three-pack. When you click through on the unit, on the HSA unit, to type, you type in plumbers, Philadelphia plumbers, Atlanta, you are taken to a home service business-type finder. You see the top three or four in a carousel at the top, above the AdWords above the pack. And when you come into the pack, what you see at the top of the pack is Google-guaranteed people who have been advanced verified and who are taking out paid ads and then below them is everybody else. So people who -- so small business, service area businesses that didn't get advance verifying, that they aren't doing HSA, are disappearing from the three-pack, no longer visible in the three-pack. And if you're not paying and going through advanced verification, you're hardly visible in the Home Service finder, either.
So in the forum, a number of them were discussing, how do they now become bricks-and-mortar businesses once again, that sort of a legitimate spin on it or how do they convince Google that they are a bricks-and-mortar business when they're not, or how do they make it look like so? Once again, there's this tension, Google pushes here, people respond here, and typically, the smallest of them are the most negative -- going to be the most negatively impacted in one of the budget for AdWords, whatever.
Mary: It's really hard because the legitimate businesses, and there are legitimate locksmiths, you know, they get punished along with all the bad guys. But so you could see Google's point of view is that we just need to shut down the mechanisms that are allowing a lot of this spam to go on. But ,if you are a small business, especially if you're just trying to get started, that's a huge burden. And what exactly does "Google guaranteed" mean? Does that mean that this plumber is going to fix my sink and it won't leak again, or just say Google checked into them and --
Mike: It means two things. One that they checked into them. That they did do background checks on all the employees so that you're not going to have a housebreaker come to your house; they've been background checked. And it means that Google will guarantee the job satisfaction for some period of time, I don't remember what, up to $2000. So they actually say that if the job goes bad and the plumber doesn't fix it, Google stands behind it.
So, Dave Squires pointed out on my blog that this has a tendency to give him that guarantee, his fear is that it will become strictly a low quote, sort of business where consumers feeling comfort of Google guarantee will feel less wrongly about the quality of the plumber.
My point though is that really good plumbers, really good electricians, really good locksmiths, are pretty busy with referral business, and if you aren't busy with referral business, you should be working to refine your referral business whether offline or online -- incent it, encourage it, nurture it. And that, you know, the types of leads that come out of Google because of the bizarre competition from national call centers and illegal or inappropriate competition and in AdWords, that Google is cleaning up -- you know, assess the value of those leads and decide whether you can pay to play. And if you can't, then you need to be developing alternative marketing strategies.
Mary: Yes. And one of those alternative marketing strategies is actually thinking about getting a physical location. And I know that, for a lot of service area types of businesses, that certainly is not a necessity. If you're a carpet cleaner, you don't really need an office or even a warehouse.
Mike: What are you going to show in the office, your can of steam cleaner, right, whatever?
Mary: I mean, you work out of your van, you're mobile, you go to the customer. So, yes. It's going to be very interesting to see how this plays out.
Mike: But if you do want to move to a location, you want to be sure that it's located within several miles of where you primarily want to be working because Google isn't even going to show it that much distance. If you're a plumber and you primarily work in, say, this suburb then you're going to need to get the office in that suburb, it's going to be longer to drive around to find this business that Google is only going to show. So, I didn't even see that -- between the cost of an office, of a real office and the limited geography that Google is going to show that, you would have to be able to find a pretty cost-effective office to make that worthwhile. Now, it's doable. If you can get in for $600 a month and Google then shows you within, and that's a really solid neighborhood where you're going to get a lot of business, Google shows you within two miles of your business, that could work, but I think you need to be careful about it. You need to do the math and make sure that ... because there's no guarantee you're going to get in the three pack anyways,
Mike: So I don't know. To me, the strategy in those businesses should be to ... primary strategy should be to nurture the word of mouth, nurture your existing customer base. Make sure that every job you do exceeds their expectations, and then become less reliant on finding new customers via Google search, if that's possible.
Mary: Yes, and one alternative is to try to work Facebook as much as you can, the Facebook business pages and the capabilities there.
Mike: Yes, and to me, that's sort of a variant on the word of mouth strategy, where you're trying to get people to share your story. Both Google and Facebook might, and your website could be used for shareable videos, I think there are other ways you may think about it, but if you are dependent on a high volume of input and you need a lot of new leads to sustain your funnel, I think the other choice is to buckle down and figure out how to become cost effective delivering the kinds of quotes that Google does through the HSA.
Mike: Which is another issue -- which is, how do you craft the quote to make sure that you are able to make a decent living in that kind of comparative environment, can be very difficult.
Mary: Right. It's easy to be the lowest priced guy, but --
Mike: Yes. And some of that, yes. So I don't know, it's an interesting problem and obviously, I see both sides of it. I get that Google doesn't really help these very small businesses by making these changes, but I see Google's response to the broader problems of abuse, and the broader problems of abuse can affect a much bigger segment of people like consumers, somebody breaks in or you get a cheater on the locksmith side. It's really, really painful and there's a high risk to Google in that area of somebody going to Google, finding somebody on AdWords, paying $19 and being robbed or worse.
Mary: Right, and yes. It is interesting that Google is guaranteeing it and I wonder if that's ever been tested yet, if anybody has made claims to Google.
Mike: I think most, in talking to Dave Squires, I think most businesses try to avoid invoking the claim. So one thing it does do is hold the businesses to a certain higher standard. Because I think that Google limits the number of claims a business can do and maybe they get kicked out of the programs, so there's some dark side, you know, sort of stick to go along with the carrots. Expensive carrots, but carrots nonethe ess. All right. Well, anything else to add?
Mary: No. That will do it.
Mike: All righty. Thanks for joining us for the Deep Dive. We will see you next week.