Selling a business - trends and issues in digital marketing

Selling a Business: Trends and Issues in Digital Marketing

http://www.jpabusiness.com.au/

jpabusiness.com.au +61 2 6360 0360 2

Table of Contents

Introduction ........................................................................................................... 3

Chapter 1: Marketing trends for business sellers .................................................... 5 What trends and issues is SEEK Commercial seeing in the online marketing and advertising

space that are relevant to business owners? ............................................................................................. 5 Do you have statistics to illustrate some of these trends? ................................................................... 8

Chapter 2: Business sales and franchise sector trends ............................................ 9 What is happening in the business sale market? ..................................................................................... 9 What are the trends in advertising and listings in the franchising sector? ................................... 11 What are your 4 top tips for business owners or brokers looking to advertise in the online

space? .................................................................................................................................................................... 13

Chapter 3: The online content challenge: finding the balance between too much and not enough ................................................................................................... 15

Disclaimer: The information contained in this eBook is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and

obtain independent advice before making any decisions or taking any action.




Introduction

Comments by James Price JPAbusiness Pty Ltd

When JPAbusiness began operating in 2002 we were primarily a business advisory firm. Then, about seven years ago, we added business broking services to our mix and began helping clients sell their businesses.

At the time I was quite sceptical about whether digital marketing was going to cut the mustard in terms of selling what I consider a complex product: a business.

In particular, I didn’t think the online market would be targeted enough, or was the right forum for attracting quality purchasers who had the wherewithal to buy and the interest in running a business.

Well, I was proved wrong when we sold our first telecommunications business utilising our own website. The business was based in Marrickville in Sydney, it sold for about $650,000 and we identified the purchaser via the JPAbusiness website.

Since then we’ve been utilising a range of digital technologies, including our own website and other business marketing websites, and we’ve learned a lot about how to market businesses successfully in the digital age.

One point I would like to make is that when it comes to selling a business, digital advertising is important, but it’s not a silver bullet.

A good broker or business advisor selling on your behalf will utilise a mix of advertising and direct marketing techniques, including digital advertising.




Meet our contributor…

We’ve utilised the services of a range of digital advertising companies, but over the past five years we’ve had a particularly good relationship with SEEK Commercial.

SEEK Commercial is Australia’s leading online marketplace for buying and selling business and franchise opportunities and we’ve found them to be very innovative and effective at identifying and attracting prospective purchasers to our business opportunities.

Between us we’ve shared a lot of research and insights as the business sale market in Australia has grown and developed, so it’s a pleasure to have Ben Johnston from SEEK Commercial contributing to this eBook.

Ben is the Sales and Operations Manager with SEEK Commercial and has kindly agreed to take part in a Q&A about trends in online business marketing and their implications for business buyers and sellers.

Insights relevant to all businesses, not just sellers

You don’t have to be a business seller to get value from Ben’s insights in the following chapters.

Whether you’re interested in selling your business or whether you’re interested in simply leveraging digital platforms to assist your business sell its products and services, what Ben has to say is highly relevant.

In fact, what he shares with us are the key elements of what B2B customers are looking for when they’re shopping online.

So take a broad perspective when you read this eBook and consider how Ben’s insights can help you utilise online distribution channels as a means to sell your own products and services.



http://www.seekcommercial.com.au/


Chapter 1: Marketing trends for business sellers

Comments by Ben Johnston SEEK Commercial

What trends and issues is SEEK Commercial seeing in the online marketing and advertising space that are relevant to business owners?

There are three main trends:

1. High quality, high quantity information

2. Mobile-friendly content 3. Email communication

High quality, high quantity information

One of the trends we’re seeing is that our audience is using us as a means of research and education.

That means they want maximum information about the business opportunity upfront in the ad. They also want lots of high quality visual content through photos and video.

What that means for business sellers is they need to provide lots of content and that content needs to contain information appropriate and relevant to the needs of a potential buyer.




Don't forget the price

We’ve seen a real change in buyer behaviour and one of those changes is that buyers want prices included in ads.

While some brokers are reluctant to put a price in their ads, our research into buyer behaviour has shown that unless there is a price, many business seekers won’t make an enquiry.

It’s similar to the real estate model at the moment. Real estate advertisements now contain far more photos and far more content than they used to, and there’s usually a price listed.

Putting in a ‘Price on Application’ (POA) to encourage buyers to make direct contact via a phone call is increasingly considered old practice.

These days people can get through a day without speaking to anyone – you can even book your restaurant table online – and that’s how many people like it, so don’t expect that call.

Content is king and part of that content delivery involves assisting a prospective buyer by providing a guide on asking price.

What’s your point of difference?

Your audience needs to understand why they should buy your business.

The business market is very competitive and we know that in the wholesale distribution sector, for example, there are numerous opportunities to purchase businesses.

You need to understand what makes your business a unique opportunity and then ensure you share that information with potential purchasers.




Mobile-friendly content

The other significant trend is the move to mobile browsing.

Many people are now using mobile phones or tablet devices, rather than desktop computers or laptops, to look at our website. They’re spending time on their mobiles on the commute to work, and even at home.

For business sellers, that means the messages in their advertising need to be presented in a concise format, in short and sharp sentences, with dot points and so on.

The information still needs to be comprehensive, but delivered in easily digestible bites.

If someone is commuting to work on a bus or a tram and looking at your ad, they must be able to understand your business opportunity quickly.

They might still decide to do some more research, but there should be enough information there that they do feel comfortable making an enquiry straight away.

Email communication

Our most recent survey of business seekers found there was a strong desire to be contacted via email in the first instance, rather than by phone.

That’s a challenge for many sellers, who like to have that initial, upfront phone conversation.

We think this desire for email communication is tied in to the mobile trend.




Mobile means people can do their research outside office hours, such as while commuting or in bed at night, and they don’t want to be bothered with calls during their work day.

Communicating via email also suits those people who, as we mentioned earlier, are quite happy to get through a day without having to talk to a human.

Do you have statistics to illustrate some of these trends?

Yes, all of these trends are backed up by surveys we’ve conducted or data collected from our website.

• Photos: Our audience on mobile devices tend to scroll through the photos first, in order to visualise the business opportunity.

• Price: Business ads that include price have a 10% better enquiry rate than those that leave price blank or put in ‘POA’.

• Mobile growth: 33% of our traffic is via mobile and tablets. Prior to launching our mobile site six months ago, mobile was only 5%; it now represents 19% of our traffic.

• Site conversion: This is the percentage of visitors to our site who go on to make enquiries. The average conversion rate for our site overall is 4%. In the first month of launching our mobile site our conversion rate was 11%. Launching the mobile site has greatly improved our site’s usability for mobile and tablet browsers.

• Email: 71% of business seekers would prefer their first contact from the business seller to be via email. 21% want to be contacted via phone first.




Chapter 2: Business sales and franchise sector trends Comments by Ben Johnston SEEK Commercial

What is happening in the business sale market?

Food still the king

Food-related businesses are number one on our site, both in terms of ads and enquiries. 38% of our enquiries and 40% of our ads are food related.

This interest in food businesses – which ranges from coffee, cafes and restaurants to convenience and grocery stores, and takeaways – has been growing for some years and continues to grow considerably.

Our enquiries have grown significantly but so have the ads, as there are more opportunities on site related to food businesses.

It’s interesting to note that if you go to many of the high streets in Melbourne, for example, you may see some retail vacancies, but you see the cafes and restaurants are still continuing to enter the market and remain.




Strong enquiries growth

Overall enquiries continue to grow across our business.

When comparing the first four months of the 2014-15 financial year (FY15) with the same period last financial year (FY14) we’ve seen 30% growth in enquiries.

Our traffic to the site for the same time period has grown by 24%.

In FY14 enquiries also grew by 30% on the previous year (FY13).

This continuing growth in enquiries is probably due to a number of factors, including the fact we have an increased number of ads on our site and we’ve also been far more proactive in driving awareness of our brand.

From an enquiries perspective food is number one, followed by manufacturing, wholesale distribution, automotive and marine.

Implications of a flat jobs market

Job ads have been relatively flat for a good 12 to 18 months, so there is strong interest in businesses from people looking for alternative employment opportunities.

When we survey people about why they come to our site and why they want to own a business, the number one reason is ‘to be their own boss’.

In the current economic climate, with limited employment opportunities, people are starting to think seriously about alternatives to working for someone and being their own boss.




Steady as she goes

In our opinion, and based on what we hear from customers, the business market is steady. Strong brands and businesses are being sold, while some of the smaller players in the market are finding it more difficult.

What are the trends in advertising and listings in the franchising sector?

Strong brands selling well As mentioned in the previous question, the strong brands with reputable names are selling well. I think in challenging times like this, when employment is difficult and you’re making a big investment in buying a business, knowing that a brand is already successful gives it more credence and makes it more attractive.

Consolidation The major trend in franchise selling is consolidation, which means numerous larger players are acquiring businesses. One example is the Retail Food Group which has acquired Gloria Jeans and the mobile coffee van business, Café2U.

Mobile business opportunities We continue to see mobile franchise options increasing, including mobile coffee vans which service business parks and various events, and mobile dog washing services.

Franchisors are coming up with those sorts of ideas because the second reason people give for buying a business relates to work-life balance. Owners of coffee vans, for example, may start their day at 7am but finish up at 3pm. These types of franchises work well for people looking for more flexibility in their work-life balance.




Investing in quality content

Another thing we’re seeing from franchisors is that they are keen to invest in their content in order to keep communicating to their audience what distinguishes their business offering from another.

That comes back to my earlier point about the fact buyers are using online to do their initial research, to compare and contrast business offerings, whether that be on our site, our competitors’ sites or their own franchisor site.

So franchisors are becoming more aware of the value of investing in content and they’re using high quality, professionally produced pictures and video to showcase why their business opportunity is more compelling than others.

A video is a really effective way to capture the essence of a business in two or three minutes and, when you think about all the how-to videos on YouTube, the audience is really used to this method of information gathering.

Franchisors can use this form of content to create a connection with people. It’s similar to corporate videos produced by employers to showcase their corporate culture and help people decide why they would choose this employer over someone else. Even on real estate websites some of the more prestigious houses now have video presentations, complete with music.




Branding campaigns

In terms of investing in quality content on our site, we’ve seen more of an appetite for display or branding campaigns coming from the franchisors.

This means a business seller can buy space on the site to highlight their brand or business via a leaderboard or banner that can be related to particular searches. For example, if someone is searching for a business in Western Australia and you’re selling a business in WA, then your banner will open on the top of their search page.

What are your 4 top tips for business owners or brokers looking to advertise in the online space?

1. Provide high quality content

Remember the audience is using online as a research tool to compare and contrast your business offering with others. Provide high quality content, such as pictures and videos, to engage your audience.

2. Clearly communicate your point of difference

Make sure you clearly and concisely communicate the most important information to your audience – that means providing a price and the reasons why it is priced at that level.

Your audience needs enough information to know why it’s worth more than some other business offering.

3. Consider and be aware of mobile users

33% of our audience are using mobile devices to browse our site.

Make sure your information is delivered in a clear, concise manner so mobile users doing 15 or 20 minutes worth of research on their journey to work can come away feeling they really understand your business opportunity. Once again, use visual stimulus as people using mobile tend to look through the photos first.




4. Consider targeted display and branding campaigns

A lot of sellers, particularly franchisors, are trying to think smarter about who a particular buyer may be and they’re being more active about targeting them.

These campaigns utilise current technology to give you more options to specifically target the audience you’re looking for and allow you to put your business opportunity in front of the right people.




Chapter 3: The online content challenge: finding the balance between too much and not enough Comments by James Price JPAbusiness Pty Ltd

You’ll often hear the internet gurus say ‘content is king’ and that in order to be successful in the online sphere you have to share lots of relevant content.

For some traditional marketers, online marketing feels like the equivalent of walking around naked in public – you’ve got to show everything!

This presents a real conundrum for business sellers because, as many of our clients know, being in business can involve dealing with commercially sensitive information.

So, at the very least, you need to ensure you have a broker or someone advising you who understands those commercial sensitivities and you need to keep those sensitivities in mind when advertising your business in an online environment.




Prepare for trade-offs

As Ben has told us, the customers – or potential business buyers – want content. They want to do their research behind the scenes, in their own time, at their own speed, until they get to a threshold position.

Providing adequate content for them requires you to share a degree of detailed information about your business online. That’s where the trade-offs begin:

• Do you share your asking price or say POA?

• Do you disclose the business name?

• Do you not disclose the name, but instead talk about what industry it’s in and what region it’s in?

• How specifically do you list the products, services and people resources?

Remember, once it’s online it’s out there forever and it can be seen not only by potential purchasers, but also by your staff and your competitors.

A marketing program that is poorly considered, particularly when you’re selling a business, can be very detrimental to the ongoing operational performance and success of the business.

A rule of thumb in our business is that you can’t sell a business by hiding it under a bushel, so we assist and guide clients through the process of describing their businesses in quite a deal of detail. In fact, we’re known in the market for providing Information Memorandums (IMs) on sale opportunities that are more detailed and more comprehensive than most.

Having said that, we will only provide a detailed IM to potential purchasers after they accept our confidentiality agreement. Before that step they can only access what we publish on our own website and digital marketing sites.




Put yourself in the buyer’s shoes

Requiring potential purchasers to accept a confidentiality agreement before learning anything about a business opportunity would definitely cost you buyers.

But publishing all of a business’s details on a digital advertising website for everyone to see carries its own risks.

So how do you find the right balance between putting too much information on a digital marketing site and not enough?

For a start, you can put yourself in the purchaser’s position and ask:

• What would I want to know?

• Is there enough information here for me to make a decision on whether this business is for me or not?

On the other side, you must consider the risks to your business of disclosing certain information online.

Get good advice

Finding that balance is something an experienced broker can help you with, because it’s important to understand the different sensitivities in each of the different marketplaces.

For example, in our role as business brokers we usually don’t advertise the price of businesses we’re marketing on behalf of clients. Having said that, in some markets advertising the price is absolutely the right thing to do and, in those cases, we’ll advise our clients accordingly.

Sometimes it’s right to advertise the brand of the business, because it’s part of the value proposition. At other times that information is something you might hold back, or alternatively talk about in a general sense until you pre-qualify the interested parties.




Pre-qualifying buyers: overcoming the email challenge

As Ben highlighted earlier, many potential buyers are unwilling to interact with sellers or their brokers during the early research phase – instead they only want to communicate via email.

This can actually be an advantage for sellers, as today’s buyers are information hungry and adept at trawling through the internet’s enormous offerings. They can efficiently pick through various business opportunities and get to a shortlist without hassling you!

Despite this advantage, email communication does create challenges for the selling process, particularly how to qualify buyers and check they are a ‘good fit’ up front.

In our business, we are happy to accept initial email contact but we quickly let interested parties know the next communication will be via the telephone.

The reason we like to talk to people is because we’re acting for the seller. It’s our job to qualify potential purchasers on the seller’s behalf, to ensure they’re worth spending the seller’s valuable time and effort on.

A credible broker will help you pre-qualify those potential buyers, not just via email, but by phone and through face-to-face discussions so you know you are dealing with someone who actually has the wherewithal and ability to buy your business, notwithstanding you still have to go through the negotiation process.




Digital marketing sites the business world’s matchmakers

Selling a business is a matching process that requires both parties to have confidence in the information provided to them.

SEEK Commercial and other digital business selling services provide a credible platform for buyers and sellers to come together for that initial sharing of information.



http://www.seekcommercial.com.au/

Selling a business - trends and issues in digital marketing

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