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Whether you are a large company, small business or a one-man operation, if you are looking to offer a commercially focused directory, the main goal is usually going to be one and the same: making money. In this article we will cover many different methods and tools available through eDirectory, each capable of creating revenue from your directory site and turning it into a success. We’ll walk through different revenue models, best practices, sample uses, price setting best practices, notes on generating recurring revenue, integrating marketing initiatives and much more.

Getting Started – Find Your Value

A key point to understand from the beginning is how to best position your directory to make it attractive and valuable to potential paying clients and sponsors. When establishing your site it’s important to keep in mind the areas in which you are providing value: Are you the premiere local source for your subject matter or geographical location? Have you established a large gathering of followers or site visitors? Does your site attract a specific, targeted audience that is valuable to businesses in your industry?

All of these are important questions to ask as you must understand the value proposition that your directory brings to the table. Knowing where your value is and how to sell it will be key in generating money from your site in any of the methods we’ll discuss in this article.

Revenue Model – You are Your Own Media Company

Let’s start off with some of the basics. What are the ways in which you can get people to pay for something on your site? The most common business model to follow when running your directory from a revenue standpoint is to think of your site or your business as its own media company.

Here are the typical revenue models that media companies use; models you can apply to your directory-based media company as well:

1. General Advertising

Clients buy visibility on your site with banner-style ads, typically through a cost per impression or cost per click rate. These ads can sell for different rates depending on the location, frequency and prominence of the banner on your site. Typically, a higher volume of traffic (i.e. people) visiting your site will allow you to charge higher fees for banner ads on your site.

Our eDirectory software provides several different banner ad options throughout the system, as well as the ability to set prices for those ads.

2. Listings, Events, and Classifieds

Listings are typically at the core of a directory site’s offerings. It’s important, especially early on in the life of the directory, for the site to build up a large base of listings. This will help to establish your directory as a prime resource in your target market. Presenting your site’s audience as a marketing channel for your advertising clients, your business can collect revenue by allowing listing owners to publish their listing information on your site’s directory for a fee. Usually sold by time period (x amount of $ monthly or annually, etc.), you as the site administrator can also create different listing options/levels and price each according to the fields and features available for the listing owner to use. For example, premium listings could be priced at a higher price point for displaying above the system’s other listings levels within any given search results page.

Depending on the market you are targeting, real estate on your site may be of interest to those businesses and individuals looking to market Events and “meetups” of interest to your site’s audience.

Publications printing news or other information often have sections of classified advertisements; there are also publications that contain only advertisements.

3. Lead Generation

A directory is the perfect place for businesses to reach new audiences and put their information in front of potential leads. As the site administrator you can choose to act as a moderator for all the new incoming leads on your site, distributing them to clients who have listings on your site on a pay-per-lead basis.

Currently, the eDirectory system allows leads to be generated by site visitor requests for information on the site. These are accessible to the site manager in the site’s administrative area, which also provides the ability to email those leads to specific listing owners within the system.

4. Affiliates

Along with leads, businesses will be interested in displaying on directory sites because they are a great place to generate sales as well. This gives the site administrator the opportunity to charge an affiliate fee for sales that were generated from your publication. (ex: a wedding dress is sold through your directory, you get a fee from the dress merchant who listed on your directory).

Affiliate programs are typically managed in a manner that is customized to fit each business’s unique needs. As a result, this is an area of your project our experienced staff at eDirectory can discuss with you, one-on-one. We’ll prepare a feature and experience built specifically for you through custom development of the eDirectory platform.

5. Content-based Marketing and Promotions

A successful directory site becomes a well-focused forum that collects the attention of the target audience for your industry. As a result, clients will be interested in posting content on your site. However, consumers have shut off the traditional world of marketing through DVR’S that skip television advertising, ignorance of magazine advertising, and researching online information without attention for banners and call to actions.

Content-based exposure can prove to be a subtle but critically effective method for your advertiser to reach your site’s audience of site visitors. By focusing on creating and distributing valuable, relevant content to attract and retain your target audience, you can provide value to the site visitors through the knowledge shared through the content provided, driving profitable site visitor interaction.

Within the eDirectory software, we provide tools to help monetize based on the content provided on your directory site. The most popular forms of content are typically articles in the form of white papers or sponsored blog posts. The eDirectory Articles module allows you to sell articles, organized by categories you define as the Site Manager. In addition, eDirectory Site Manager can issue custom, manual invoices to interested advertisers who may want to provide sponsored content that would be presented within the eDirectory’s blog module. eDirectory offers a number of flexible ways to strategically monetize in a digital world where content is king.

6. Community

Some businesses and owners of directory sites choose to operate their directory on a membership basis. Through a membership-based model, the site manager would charge membership fees from clients to join the site, gaining an opportunity to involve themselves in the network and community your directory business focuses upon. Typically, these would be sold on a time period basis as well (per month, per year, etc.). Site administrators could choose to offer different levels of access to posts on your site, participation in content discussions, communication with leads, newsletter subscriptions, and a long laundry list of other features that may be of interest to the visitors to your site.

Building a community, similar to building an affiliate network, involves the consideration of many different aspects of the directory’s business; no two communities are ever alike. If a community-based approach is a consideration for your project, reach out to a member of our experienced eDirectory team to discuss your needs and request a customized solution for your site.

7. Email Newsletters

Newsletters are a great tool for you to reach your site members and stay in touch with updates or general news about your industry. With a large enough audience, your newsletter will become a valuable platform for your clients or sponsors to reach more potential customers. There are 3 main ways you can use your newsletter to generate some revenue:

Advertisement Space: You can sell advertising space, such as banners, or offer newsletter sponsorships (“This newsletter is brought to you by ABC Corp…”)

Sponsored Content: Along with ad space, you can offer to sell content space similar to how you would on your website. Clients can pay to include an article or offer a promotion for their business right on your newsletter.

Sell Email Lists: Additionally, you can sell the email lists of the people who signed up for your newsletter. Your clients will be interested in reaching the same target audience that your newsletter has already established.

The eDirectory system provides an integration with Campaign Monitor in addition to a set of data export tools that allow the site manager to generate lists for use in external email services such as Mail Chimp or Constant Contact.

Recurring Revenue – Getting New Users and Keeping them On Board

Many of the revenue generating tools built into eDirectory focus on a recurring revenue model. Listings, Events, Classifieds, Articles Content, and Banner Ads can all be sold to clients on a time period basis. These can be set up to charge a recurring fee every week, month, year, etc.

A general business principle – MBA 101 if you will - is that recurring revenue is four times as valuable as a one-time sale. This is because recurring sales are typically collected for a longer period of time due, in part, to convenience as well as the comfort and trust developed through the business relationship.

If you can establish a business with highly repeatable revenues and maintain your capital expenditures to 10% or less, then your directory business (or any business for that matter) will be in great shape. Businesses that can successfully create this model are based on a unique, differentiating form of intellectual property: Subway.com generating franchise fees from their franchisees; the Beatles generating royalties from their music library; Arca Solutions, Inc. generating subscription revenues from our software application suite; and eDirectory software license owners leveraging the eDirectory platform and generating sales from recurring subscriptions for their directory site’s advertising products and services.

In order to start earning recurring revenue from your directory and keep your client’s on board, it’s important to make sure your site is set up for success:

1. Get Data

NEVER start with an empty directory. Just don’t do it.

Without data and content it ceases to be a directory at all, no matter how wonderful you believe your domain name really is. No reasonable business owner will be interested in paying to be involved with an empty directory. Whether you start by importing content, researching and entering it manually, or even offering free listings by reaching out to businesses one at a time, filling the directory is the most important step to getting started. This can require time and patience but it will be the catalyst that drives your site towards success.

There are options to buy data to fill your site (InfoUSA, Localeze, Dunn & Broadstreet, Axiom, InfoData, etc.) as well as those offering free data, such as the local Chambers of Commerce, Trade Organizations and other such entities.

2. Build an Audience

Most directory-based sites receive 50-70% of their traffic from Google search results. This is the main battleground for where you can gain an audience and drive traffic to your site. Here are the areas to focus to gain more organic search traffic:

SEO: Search Engine Optimization (SEO) is a key component for any site trying to gain traffic and something that you should invest your time in to help you build up an audience. For a full overview and tips read our SEO Toolkit for Directory Sites white paper to learn more about SEO and how to improve it for you site.

Content: Content on your site is key for filling your directory with relevant keywords and phrases that will be picked up by search engines. Make sure to fill out your site with Listings, Articles, Blog posts or any other form of content you can with original, relevant content to attract new visitors and search engine’s alike. Keep your content fresh and updated on a consistent schedule to achieve the best results.

Backlinks: Another key component to increasing site traffic is to build up your backlinks. Backlinks are the links back to your website that can be found on other domains or sites around the web. Increase your backlinks by commenting on forums or blog posts, include links on your content and distributing it across the web, post links and content in your social media networks, offer to guest post on blogs or submit articles to other relevant sites in your industry along with many other methods or getting your links out there.

3. Engagement

Engagement is all about keeping your audience on board after you have initially brought them in. Use social media and email marketing to stay connected and engaged with your clients and site visitors:

Connect: Keep your finger on the pulse of your industry and stay on top of all the latest news and trends that are piquing your follower’s interests.

Collaborate: Work with your followers to create unique content such as industry interviews, interesting case studies, guests posts and articles and more.

Backlinks: Another key component to increasing site traffic is to build up your backlinks. Backlinks are the links back to your website that can be found on other domains or sites around the web. Increase your backlinks by commenting on forums or blog posts, include links on your content and distributing it across the web, post links and content in your social media networks, offer to guest post on blogs or submit articles to other relevant sites in your industry along with many other methods or getting your links out there.

Reward Loyalty: Offer various perks and benefits to your followers and reward them for staying with you. Use online badges to signify members who have been signed up for 6 months, 1 year, 5 years, etc. Offer discounts, specials or prize packages to your most active users. Hold drawings or raffles for members who participate in directory events. There are endless ways to reward the loyalty of your members and keep them around for the long haul.

Setting Pricing

Figuring out how much to charge your clients for advertising/membership/sponsorships is a delicate balance of making sure you are providing enough value to your customers while still maximizing your chances of running a profitable directory. Actual pricing is going to depend on the market for your specific industry. Some categories are willing to pay more than others (ex: within the wedding industry photographers likely have higher budgets vs the average cake maker) and the pricing structure has to be one you are comfortable with.

Pricing Tips

We have always recommended having three levels of pricing: Free, Affordable and Aspirational (highest priced). This structure offers access to clients of all types and with every range of the budget spectrum as well. It’s up to you to set the different features available for each level and make sure the value is segmented accordingly and you are matching the offerings to the proper prices.

Using Google AdWords Tools is a great way to gather some data and insight. In AdWords you can estimate traffic for various keywords and phrases. Use this tool to research the relevant keywords and phrases related to your directory site (the more specific the better) so you can estimate the volume and $ value of niche industries and markets. The more competitive the market, the more people will be willing to spend on your site.

Monthly vs. Annual: Monthly pricing plans will always be more affordable for your clients but you must keep in mind that advertisers will want to see a positive ROI before they see a renewal option. Make sure you can provide value and a positive return for your advertisers in the time periods that you set for your pricing or else you will experience a very high churn rate.

Sales and Marketing

Sales and marketing go hand in hand when trying to generate revenue from your directory site. Each one must feed off of the other and work in unison to achieve a common goal.

Use marketing campaigns to grow your site traffic and attract more potential leads through SEO tactics, social media interactions, creating and distributing new content, email newsletters, building backlinks and more.

Employ sales strategies to entice new leads into becoming paying customers with PowerPoint presentations showing your site’s value, pitching opportunities for ROI, highlight the value of niche markets and targeted audience bases and much more.

Sales and Marketing Working Together

An example of sales and marketing working together is to use the strategy of offering free listings. For purposes of this discussion, we’ll focus on a hypothetical pet services directory for the state of Virginia.

As the site manager, you can use marketing to find as many potential listing owners (i.e. paying advertisers) as possible. You can start a Google AdWords campaign and bid on keywords such as “pet grooming virginia”, “vets in arlington va”, or “dog treats in fairfax va” to drive new site traffic from Google ads showing up in relevant searches. You could also attend a pet show or expo in the Virginia area and hand out fliers that provide general information about your business, links to your website, and instruction on how to sign up for free listings. You can then advertise the opportunity to receive free listings again, somewhere prominently on your site, and encouraging the new leads from the pet expo to ultimately sign up.

Once you have seen a steady flow of free listings created in your directory, your proactive sales campaign can begin. Ideally, you have been offering a very basic listing to most of your free advertisers to date, leaving you with the opportunity to upsell these clients to the higher listing levels and pitch the added benefits of their listing upgrade. Set up a schedule of contact to ensure a consistent level of engagement – phone calls and emails with information about new upgrade offers are a given – working to close as many “existing clients” as possible through your upgrade pitch.

*Tip: A great way to track these clients and your interactions with them is to use a CRM for your sales data such as Insightly, Salesforce or SugarCRM.

Additional Sales Tips

Develop a clear sales plan: Start by deciding how you will build your prospect list, find leads, and then plan on the ways you will contact them to close your deals (weekly information emails, free signups, phone calls, upgrade offers and promotions).

Go Elephant Hunting: “Elephant hunting” is a term used for searching for a few big sponsors. Typically these sponsors are bigger and more established companies that are able to spend more than smaller businesses or individuals. These prospects will be harder to find and can take some time and patience to win them over. However, the rewards can be large and help fund large portions of your site. Aim for site wide sponsorships or mobile app sponsorships from these leads to offer them the most exposure and justify higher pricing.

Juice the ROI for Renewals: Getting your clients to renew their accounts and sponsorships will rely heavily on the amount of ROI they are seeing. A key strategy to help you retain these clients is to use some of your revenue to spend on marketing campaigns like buying outside advertisements to drive traffic to these listings. Sometimes you need to help your clients in order to help yourself.

While these are highlights that only expose the tip of the proverbial monetization iceberg, they are critically important to setting your directory business up for success.

For more information and to open a discussion about ways you can monetize your director business, contact a member of our eDirectory team today!

Contact us:
Call us @ 800-630-4694 or send us a message here.