Localeze’s Future with Moz Local

I received an email from a fellow Local SEO a few days ago asking me my thoughts on Moz Local. My first thought was, “I’ve never heard of Moz Local”.

I head on over to the Google machine and check out the first listing I see which is from the Moz Blog.

Apparent, David Mihm and Moz have been hard at work fixing some of the most glaring issues with Local SEO, namely having to register your business or a client’s business with the 3 longstanding, major data aggregators InfoUSA (Infogroup), Acxiom, & Localeze separately.

Moz Local fixes this by giving you one platform to manage your data with all three of the major data aggregators along with Factual and Foursquare which they consider as 2 other major data aggregators. The product also has a few other interesting tools but the ability to submit to the major data aggregators simultaneously is arguably its major draw.

That’s a pretty cool product. One that I am definitely interested in.

 

Localeze?

Being well versed with Localeze and actually in the middle of trying to start reselling Localeze’s premium product myself (which they now call “True Identity“) to other Local SEO’s, I was more than a little surprised that Localeze went along with such a proposal.

I later reasoned that there was no way Moz was tapping into Localeze’s premium product. Localeze must have allowed them to tap into the free product API.

I called my Localeze rep to check in and what she told me really floored me.

Moz Local’s product includes the premium Localeze product.

Why did this surprise me? For a few reasons.

One, Localeze sells their premium product for $300 a shot. That’s a huge discount from $300 to Moz Local’s $49.

However, as we know bulk can certainly make up for almost anything, see Sam’s Club. Localeze will actually give you a bulk discount if you will sign a contract with them and pay an upfront fee. They’ll discount you down to a very affordable price if you have enough volume. So, that’s not initially surprising.

What is surprising is Moz Local’s own rate of $49. Even at Localeze’s lowest quoted price (to me), Moz Local still beats it (although just barely) AND Moz Local also packs in InfoUSA & Acxiom as earlier mentioned.

This just doesn’t make sense on so many levels.

 

Localeze’s Product Future

My first thought in all of this is that Localeze has seriously undermined their premium product. I highly doubt they had much sales coming in from the one off local businesses that were willing to pay $300 a year. I imagine they had a few but that couldn’t have been their main sales strategy.

Their main strategy had to be on the reliance of the Local SEO community knowing and understanding Localeze’s value to their Local SEO campaigns and success. This is where the contract pricing came in with a relatively hefty up front cost. However, the Moz Local price point has made Localeze’s contracts futile. The Moz Local price point is lower, doesn’t have a contract, doesn’t have up front pricing, and provides more bang for your buck with the other data listers.

There is seemingly zero advantages toward being a Localeze reseller at this point not to mention steep downsides.

So what’s the future here? Why is Localeze undermining their entire pricing structure for their premium product? What is Localeze’s thought process?

 

Sales Game

One explanation is that Localeze may be having sales issues. Whether it’s volume, staffing, or something else, this would explain a lot.

If volume is an issue, Moz’s branding solves a lot of that, especially with David Mihm’s sway and brand in the Local SEO world.

Localeze is also only one of Neustar’s products. Neustar may see the Localeze product under performing and plan on downsizing and streamlining the Localeze department down to just a few people. This would make sense as Moz Local will drive all of the sales for Localeze and all they would really need at that point is probably 1 support and a few techs. And realistically, they probably wouldn’t even need a dedicated tech at all.

Downsizing & streamlining. That’s an easy way to make a languishing product profitable.

 

Long Term

While Localeze may be having sales issues, this could just potentially be a branding issue. An interesting and highly unlikely theory, Localeze could cash in on Moz’s enviable branding machine and when Moz’s contract comes due, simply refuse to renew it and revert back to their old pricing structure and keep up their own branding. Or, Localeze could negotiate a higher price that makes more sense for them.

However, I would imagine crossing a company like Moz wouldn’t bode well for business as they are the “good son” of the SEO world.

 

Other Considerations – Profit Margin

I also am very curious about Moz’s profit margin on this. For them to make money off of a $49 product, your margins have to be pretty decent or you have to have massive volume to make up for it. While Moz can draw a lot of volume, I’m not sure there’s enough volume in the Local SEO world to go around and make this work financially. But obviously Moz has done their homework and I’m sure feel confident in it. That means, in my opinion, Localeze must be selling at pennies on the dollar.

If Localeze really is selling razor thin, consider what that means in conjunction with Moz Local’s attractive $49 price undermining Localeze’s entire pricing structure. Localeze has two audiences, the local business owner and the local SEO agency.

If I’m a local business owner, I’m saving $250 dollars by using Moz Local (not to mention all the other awesome features).

If I’m a local SEO agency, why would I sign a binding contract, pay an upfront fee AND pay essentially the same price for less product?

 

What I Do Know

At the end of the day, there are a lot of unknowns in this deal. But there is one thing I do know:

I’ve already cancelled my Localeze reseller contract.