Platt Perspective on Business and Technology

Online store, online market space – part 21: vetting and brokerage as business expansion -2

Posted in startups, strategy and planning by Timothy Platt on April 11, 2012

This is the 21st posting in a series on building an online store as a new business (see Startups and Early Stage Businesses, postings 20 to 33, 35, 37, 40, 55 and 90 for parts 1-20.) I wrote and posted Part 20: vetting and brokerage as business expansion -1 in follow-up to a discussion with a friend and colleague who markets other entrepreneur’s businesses through her own business’ web site and both as means of providing extra value to her own clients, and in developing new revenue streams from partner businesses that she so helps with their marketing. I continue the discussion I began there, with this series installment. And I begin by picking up on a detail I mentioned more in passing in Part 20, here stating it more boldly.

Consumers have come to rely on online and crowd sourced reviews in making their own purchasing decisions. But businesses do not always simply passively stand by while the marketplace shares word about them and their competition from its collective experience. More and more often, business people seem to be reaching out to game the system of review sites, and both by posting bogus positive reviews concerning their own businesses, and at least occasionally by posting bogus negative reviews about their competition. (For information regarding negative false reviews in this context, I cite Trolls and Other Antisocial, Disruptive and Divisive Social Networkers – Part 1 and its Part 2 continuation.)

Review sites still hold value and even when they primarily post anonymously sourced reviews where a reader does not know what if any relationship the poster might have with the business under review. But it is becoming more and more important for consumers to have access to vetted, reliable sources of review insight too. And this brings me to the starting point for this posting.

Anyone can post advertising notices to sites such as Craigslist or Yelp and many, many do and every day. Anyone can post reviews online, and in this I cite Yelp and also partner business reviews for businesses that sell through sites such as There are a seemingly endless number of places where people can post or read crowd sourced reviews. And the major sites involved in this see tremendous levels of participating site visitors, many going there to post and many, many more going there to read what has been added.

• I began this discussion in Part 20 with consideration of what businesses to partner with, and market for – and with your own business, your clients and customers, and potential partner businesses and their needs in mind.
• I turn here to issues of visibility and I begin by noting that this is a situation where the Pareto principle applies and most traffic and activity go to a small percentage of the participating sites involved in supporting this type of online content. Mathematically, the distribution of crowd sourced reviews and postings online, going to specific sites in this arena follows what is called a power law.

If I were to leave this posting with this, I would be leaving it with a strong presumed message conveyed that a site in as powerful a position as Amazon or Yelp should do very well as a broker and a source of vetted insight – as they are the sites people will go to in by far the greatest numbers to read and act upon online reviews. And smaller, long tail-end of the curve sites will gain at most just nominal value from this. But that argument leaves out a very important modifying and even controlling factor: marketplace partitioning.

• When you build a business and a clientele, and a reputation built on direct customer experience and the word of mouth and viral marketing value that they bring, you create a market partition. This is bounded by your areas of expertise and experience and by what you offer in products and services that reflect that. This is bounded by the demographics and range of your marketing reach. The partition you operate in might be numerically fairly circumscribed and small – but still be fiercely loyal and reliable for repeat business. And these people will go to your site and read and respect the reviews and recommendations that you include there.
• The businesses that you partner with in posting marketing material, recommendations and links may also work within marketplace partitions that are limited in absolute size. But unless their clientele base exactly coincides with your own, brokering access to them will expand the partition reach for both your business and theirs.

And this brings me to a very important detail: reciprocal links. In principle, you could simply link to partner business sites and have that a one way relationship. But it synergistically enhances all parties when they reciprocally link to each other through their business web sites. The synergy comes in from a variety of sources, but one I will focus on here holds the potential of expanding the overall partition and effective marketing reach for all involved businesses still further. Search engine sites such as Google hold their search results prioritization algorithms as closely guarded trade secrets. But it is clear that all of the major search sites seek to give higher quality scores for any given search query to sites that meaningfully include content related to those search terms and expressions. And through iterative mathematical processes, web sites that are linked to by other sites with high content value scores achieve higher scores themselves as a result, from this inter-site recognition of quality. Reciprocally linked sites that have well written, meaningful content reciprocally improve each theirs search engine results scores for the search terms relevant to what they have content on – their businesses and what they do and offer.

So this is more about the quality of the business to customer relationship than it is about the quantity of these relationships per se, and about starting with high quality and customer loyalty – and building the numbers from there as from a strong foundation. Working in this way with partner businesses can be an effective way to do that, improving both quality and quantity of marketing reach and business scale.

I am sure to come back to the issues of online stores in future postings, adding more to this series and to other, related series as well. Meanwhile, you can find this series and related postings at Startups and Early Stage Businesses and also at Business Strategy and Operations and its continuation page Business Strategy and Operations – 2.

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