How to Build a Top-Rated Online Directory Service

Mathew Rosen shares seven steps that grew 411.ca into a search engine with 24,000 paying advertisers

1. Be entrepreneurial

When Steve Curry launched 411.ca in 2000, it initially had three people, and it sold traffic to other search engines. After a few larger companies tried to buy the site, however, Curry decided that the best way to capitalize on the strong brand was to go into competition with the very sites he was selling traffic to. For two years, he built a small sales organization and raised some capital from private investors. Then, in early 2007, using the capital, he brought on Mathew Rosen as his president of finance and hired a significant sales force. That team has since netted 411.ca approximately 24,000 paying advertisers.

2. Define your revenue model

As an online directory, 411.ca makes money by selling advertising to companies that want to be found when people are looking for their products. “Companies pay for the number of cities, the categories, and the placement,” Rosen says. “If someone searches on 411.ca for a flower shop in Toronto, an advertiser will pay to show up in the first results.”

3. Decide how you’ll sell, then do it well

The company went through many methods of selling to customers, from a feet-on-the-street approach to a distributed sales force. Now, it has settled on outbound telesales, and Rosen thinks the company has the most effective outbound telesales group in Canada. The sales staff makes up 75 percent of the company, and its wages are higher than industry norms and buoyed further by a commission system. “It’s all about the performance,” Rosen says. “We have an environment that keeps the staff happy, with things like pool tables and Xboxes, but our success comes down to the fact that we pay for performance, so we get better staff and better results. We also provide our staff with the best tools to do their job, so things like sales leads and an amazing sales tool help our staff be as productive as they can be.”

4. Implement solid processes

Once 411.ca was up and running, Rosen focused on the administrative side of the business because following the money for a large recurring-revenue business dealing in small transactions can quickly get complicated. “We have 24,000 paying customers, but these are small advertisers, and we bill them every month,” Rosen says. “So we have to get sales from a salesman’s mouth, onto a computer, through to provisioning, on the site, then finish billing and collecting. That’s tricky, and to keep track of it, you have to build controls.” The company started with Quickbooks and then gradually migrated to a more comprehensive system.

5. Know your product and what your customer wants

The business is not a pay-for-click shop; it’s a display advertising service. “When you put an ad on 411.ca, you’re hoping for a lot of viewer traffic,” Rosen says, noting that the site delivers 15 million page views from 3 million unique visitors each month. “In Canada, that’s a significant number of people, and unlike when they visit other search engines, [here] they’re definitely looking to buy because you’re not looking for the phone number of a flower shop if you’re not going to call the flower shop. Our research shows that 70 percent of people who look for a phone number on 411.ca will actually phone the business.”

6. Evolve

Two years ago, 411.ca licensed (from another company started by Curry) a technology that searches the Internet for available domain names and can instantly launch a website. It’s been a big success because it allows the client service group to get clients set up with domain names and websites right while talking with them. “About 50 percent of small businesses don’t have a website, and when we’re on the phone with them, we can provide one within seconds,” Rosen says. “We say, ‘Here’s the name. Do you like that? Okay, what colour do you want your website to be? Blue? Great. We’ll send the link to your cell phone; when you get home tonight, take a look and let us know if you like it.’” The company has launched 20,000 websites this way, raising both its revenue and its customer retention.

7. Expand your product offering(s)

Google contacted 411.ca in 2012 when it wanted to build Google Adwords accounts with small to medium businesses, which make up the bulk of 411.ca’s customers. “They wanted to sell Google Adwords to our customers, because if you ask Joe the plumber to go out and buy some Google Adwords on his own, he won’t know what you’re talking about,” Rosen says. “Google tells us we’re the fastest-growing  Google Adwords Express reseller in its North American reseller network (and possibly the world), and it’s good for us because it’s another product we can offer that creates loyalty and makes it difficult for customers to switch to another directory that doesn’t offer this service.”

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THE BOTTOM LINE

Job title
VP of finance and corporate services

Industry
Media

Years in the business
17

Where did you start your career?
I started as an accountant at HealthTex, an American children’s wear company in Canada, built it to 35 stores, and took over as general manager at age 30.

Describe yourself in three words
Passionate, fair, focused.

Advice to those just starting in finance
You have to learn more than the accounting; you have to understand the business.