1. MerchantCircle “Merchant Confidence
Index” Survey Results
December 8, 2011
MerchantCircle.com, a Reply!, Inc. property
800 W. El Camino Real
Mountain View, CA 94070
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 1

2. Survey Methodology
Fielded online November 8th through November 28th, 2011
Invitation to participate sent via email to a random sample of 100,000
MerchantCircle members (out of a membership base of 1.6 million
members)
Total responses: 2,555
– 78.0% of responses from merchants with 1-4 employees
– 12.4% of responses from merchants with 5-9 employees
– 8.0% of responses from merchants with 10-49 employees
– 1.7% of responses from merchants with 50+ employees
No incentive was offered to complete the survey
By virtue of the survey methodology (delivered via email and fielded online),
responses are expected to come from relatively more “internet-savvy” members
Merchant Confidence Index tracks track four key questions designed to
synopsize the prevailing trends among local business owners. The overall index
score is based upon a standardized five-point Likert scale.
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 2

3. State of the U.S. economy
How would you rate today’s economy compared to the
past twelve months? (n=2,555)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 3

4. Expectations for future revenue
How do you expect your sales revenues to change over the
next three months? (n=2,555)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 4

5. Expectations for holiday revenue
How do you expect your holiday sales revenues to
compare to last years? (n=2,555)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 5

6. Marketing expenditures
How do you expect your marketing/advertising expenditures
to change over the next three months? (n=2,096)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 6

7. Hiring expectations
How do you expect your company’s headcount to change over
the next three months? (n=2,555)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 7

8. Merchant Confidence Index Calculation
Question Average Normalized Change vs.
Response Score (on a Q1 2011
Score (on 1-5 100-point Score
Likert scale) scale)
How would you rate today’s 2.56 12.8 -7.9%
economy compared to twelve
months ago?
How do you expect your sales 3.30 16.5 +0.6%
revenues to change over the
next three months?
How do you expect your 2.97 14.9 -0.2%
marketing/advertising
expenditures to change over
the next three months?
How do you expect your 3.05 15.3 +0.3%
company’s headcount to
change over the next three
months?
Merchant Confidence Index Score 59.4 -6.0%
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 8

9. Marketing budget
What is your annual ad/marketing budget? (n=2,096)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 9

10. Adoption of specific online marketing services
Percent answering yes to the following question: “Are you promoting your
business with the following websites/services?” (n=2,096)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 10

11. Marketing channel preference
If you had to put all your marketing time and budget into only one
channel, what would it be? (n=2,096)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 11

12. Interest in purchasing leads in key business categories
Would you be willing to pay a per-lead fee for qualified customer
prospect information? (n=488)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 12

13. Adoption and repeat usage of Facebook Ads
Have you used Facebook ads?
(n=2,093)
Would you used Facebook ads
again? (n=496)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 13

14. Perception of Facebook Ads amongst users
Why would you use Facebook ads Why wouldn’t you use Facebook ads
again? (n=303) again? (n=181)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 14

15. Adoption and repeat usage of daily deals sites
Have you offered a daily deal with a
group buying site? (n=2,071)
Would you offer a daily deal with a
group buying site again? (n=241)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 15

16. Perception of daily deals sites amongst users
Why would you offer a daily deal Why wouldn’t you offer a daily deal
again? (n=181) again? (n=59)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 16

17. Current and future group deals adoption
Which group deals services have you Which group deals service do you plan
used in the past? (n=233) to use in the future? (n=304)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 17

18. Group deals adoption criteria
What criteria matter most to you when choosing a group buying service? (n=314)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 18

19. Mobile marketing
Describe your mobile marketing efforts today. (n=1,854)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 19

20. Smartphone adoption amongst local business owners
Which of the following devices do you use for your business? (n=1,971)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 20

21. Tablet adoption
Do you use a tablet device for your business (e.g., iPad)? (n=1,988)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 21

22. Respondent Profiles
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 22

23. Size of business
How many people does your business employ? (n=1,952)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 23

24. Business categories
Which single business category best describes your business? (n=1,952)
© 2011 Reply! Inc. PROPRIETARY AND CONFIDENTIAL 24