If you’re in the process of setting up a directory – or maybe you already have on you’d like to revamp – determining how your directory will run is an essential component, because there is a lot of competition out there.
One of the most important decisions you’ll have to make is determining your fee structure: will you choose a paid directory where customers will pay to have their businesses listed, or will you choose a free directory where anyone can post at no cost?
There are certainly advantages and disadvantages to both approaches, and it all depends on your ultimate goals. Free directories are a great choice if you’re starting from scratch, but paid directories may offer more incentive for both you and your customers. So how do you pick?
Well, we’ve put together a few of the pros and cons of both paid and free directories to help you decide which is the best approach for your business. Let’s take a look.
Free directories are extremely common, which can be a blessing and a curse. The good news is most free directories are relatively easy to set up and come with some great benefits. Let’s take a look at some of the positives and negatives of having a free directory.
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Listing Boost. The whole point of having a directory is to get businesses to list with you and having a free directory is a great place to start.
Marketing. Offering a free directory is a great incentive you can offer your current customers. After all, everybody loves free stuff. You can go about it in a few ways: you can offer a free directory as a benefit for customers who already pay for your services (making it an exclusive bonus), or you can have a free directory open to the public where anyone can post (making your site very popular). Either way, you’re sure to entice customers with a great resource like this.
Revenue from Ads. Just because your directory is free doesn’t mean you can’t make money. Many free directories offer paid advertising slots on their sites as a source of revenue, so even if you don’t charge for posts you can still turn a profit. The great benefit of using ads is that it offers additional opportunity for businesses to advertise and spammers are less likely to submit ads.
Vetting. While getting a boost in listings is a positive thing when you’re building a new directory, it can also mean a lot more work, since you’ll need to comb through each submission for errors. One way to save time in this area is to enable automatic submissions to accept posts without needing you to approve them first, but this method has disadvantages of its own (see: spammers).
Spammers. One downside to free directories is they tend to be the ideal place for spammers, especially if your directory is set up to accept automatic submissions. Spambots can easily create accounts and post hundreds or even thousands of applications through your site on a daily basis, plaguing your directory with useless information. The only way to combat spam like this is to disable automatic submissions and to vet each listing on a daily basis, which can eat up a significant portion of your time. If you want to maintain a directory without wasting a ton of valuable time monitoring each post for spam, then you might want to stay away from a free setup.
Reputation. When developing a free directory, it can be tempting to go through the process as quickly as possible (since you’re not making any significant money on it). However, this often leaves free directories with a “cheap” look or feel compared to their paid counterparts – especially if your site is riddled with low quality links or ads. If you don’t have a good vetting process for spam, you also run the risk of listings being cluttered and precarious, which can damage your directory’s reputation.
If you’re looking to add benefit to yourself, in addition to, offering something special for your customers, paid directories are a great choice, even if they do take a little more setup time. Let’s take a look at some of the positives and negatives of having a paid directory.
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Income. Of course, one of the most obvious benefits to owning a paid directory is having an additional source of income. The fee structure of your paid directory can also offer a variety of perks for your customers. Some directories offer a one-time fee to post listings, while others offer a monthly subscription plan. For those using subscription plans, you can also add multiple payment tiers that include a certain price for temporary listings and a slightly higher price for permanent listings. Many paid directories include a free basic listing and then promote additional benefits to customers willing to shell out a few extra bucks. Whichever approach you choose, you’re making money.
Reputation. While free directories will get you immediate listings, paid directories will get you higher quality listings (even if you see fewer listings initially). What’s the difference? Well, having high quality listings not only boosts your directory’s reputation, it also comes with a few added perks like higher SEO rankings and higher approval ratings when you’re listing your site in other directories. Basically, the more high-quality listings you have on your site, the more people will want to list, because you’ll be seen as an authority.
Less spam. It’s fair to say that people respect what they have to pay for. When you offer something that requires credit card information, you’re far less likely to find spambots prowling your territory. This means that paid directories fare significantly better when it comes to having automatic submissions, which is less time spent pouring over applications to make sure everything is on the up-and-up.
Commitment. When you run a paid directory, you’re essentially running a separate business. You’ll need to deal with payment processes and customer concerns in addition to all the other setup and management required of a directory. If you really want your directory to stand out you’ll also need to invest a significant amount of time to make your website look good (which, if you’re not a designer, could cost you) and to generally market your site. If you don’t feel like you can put in the additional effort required to run a successful paid directory, then you should rethink your approach.
Which Should You Choose?
In terms of setting up a directory, choosing paid or free comes down to a few things: your level of commitment, your interest in revenue, and your desired reputation.
While free directories are easier to set up initially and can boost listings relatively quickly, they also come with a higher risk of spammers and require a bit more time for vetting. While you can still make money off of a free directory using advertisements, it will be an additional step and also comes with a certain level of commitment above and beyond the normal setup process.
But if you don’t mind vetting a few more listings and you really want to offer a great incentive as an added bonus to your business – and you feel like your reputation won’t be damaged if your site gets spammed – free directories are a great choice.
If you have a bit more time to commit to developing a more robust directory, however, paid directories offer a bit more bang for your buck. Even though the setup process is a bit more complex (you’ll need a website and a way to process payments, as well as a system to manage listings), you’ll gain a few more benefits from having a paid directory.
If you want a boost in SEO, a higher reputation in the industry, and a good additional source of income for your current website, paid directories are the perfect choice.