Businessmodel of ReachLocal

Customer Segments

ReachLocal serves small, medium and large enterprises and franchise businesses across a range of business sectors, including the automotive, healthcare, real estate, financial services, and the sports and entertainment industries. Its customers are based primarily in the US, but also operate across Europe and Asia Pacific.

The Company lists a number of clients on its website, primarily small and medium-sized businesses such as Affiniti Golf Partners, Atlanta International Packing and Crating, F1 Boston Racing and Black Country Skips.

Value Propositions

ReachLocal’s principal value is that it provides a one-stop-shop to small and medium businesses for a full suite of digital marketing and advertising solutions, helping companies manage and generate more leads and customers.

Its services are available on a self-service basis and can be managed via the Company’s online digital marketing platform, which can be accessed via web and mobile browsers and mobile apps, allowing customers to keep track of their marketing activities from anywhere at any time.

The ReachLocal platform also enables customers to automate parts of their marketing operations, saving time and resources that can be used elsewhere.

Channels

Some of ReachLocal’s products and services can be purchased through its mobile and desktop websites at www.reachlocal.com. More complex subscriptions and product sales can be negotiated directly with the ReachLocal sales team, which can be contacted over the phone.

The Company’s digital marketing platform and user accounts can be accessed via the ReachLocal homepage, as well as through the ReachLocal iOS and Android mobile apps.

Customer Relationships

Some of ReachLocal’s products and services are available on a self-service basis while other, more complex services must be negotiated directly with ReachLocal sales representatives in order to fully satisfy the individual needs of each customer and provide a custom quote.

The Company provides support to its customers through the resources section of its website, a searchable library of guides, ebooks, infographics, webinars, videos and articles.

For queries that cannot be answered through these resources, the Company provides technical assistance through its support team which can be contacted over the phone or via an online contact form. ReachLocal also hosts a feed compiling all of its social media activity, comprising posts from Twitter, Facebook, LinkedIn, Pinterest, and Instagram.

Key Activities

ReachLocal is an online digital advertising and marketing company. It provides web presence marketing solutions, including search engine optimisation and content marketing, and digital marketing solutions such as Facebook advertising, search engine advertising and display advertising.

The Company also develops and maintains a digital marketing platform that allows users to analyse which marketing sources are generating leads and customers and to automate and manage marketing activities such as call recording, lead source tracking, return on investment reporting and staff reminders.

Key Partners

The majority of ReachLocal’s partners each fall in to one of three separate partner categories: Web Partners, comprising web development companies with which ReachLocal collaborates to provide website design and related marketing solutions to their collective clients; Media and Ad Agencies, with which the Company works to create joint online marketing strategies and campaigns; and Affiliates, comprising businesses and websites that receive small commission for client referrals.

All of these partners receive training, support and on-boarding assistance. ReachLocal also partners with large tech companies to provide its clients with the broadest audience possible. These partners include Google, Yahoo, Facebook, Bing and Yelp.

Key Resources

ReachLocal’s key resources are its digital advertising platform and technology, its personnel and its partners.

The Company’s sales staff in particular play an important role in ReachLocal’s business model, as do its digital advertising and marketing experts on whom the Company’s service quality largely depends.

Cost Structure

ReachLocal’s costs relate primarily to the development and maintenance of its digital marketing platform, the management of its key partnerships and the retention of its workforce of approximately 1,300 employees.

The Company’s network of more than 65 regional offices, including in the US, Brazil, Canada, Mexico, Australia and Germany, accrues significant fixed costs relating to office rental and utilities.

Revenue Streams

ReachLocal generates revenue through the sale of various digital advertising and marketing products and services, which are divided into three categories: Lead Conversion Software, Web Presence and Digital Advertising. The first of these refers to the Company’s ReachEdge digital marketing platform, through which customer can manage their digital marketing activity and receive various apps and alerts, lead tracking and return on investment reporting.

Customers can subscribe to the platform for a fee of $149 per month. ReachLocal’s web presence offerings include search engine optimisation services, content marketing solutions and a live chat service. These products are priced at between $99 and $1299 per month.

The Company’s digital advertising solutions, including search engine advertising, Facebook advertising and in-app mobile advertising, are priced on a monthly or per cycle basis, with prices set at $500 per cycle.