Small business owners are upset (again) at Merchant Circle over what the business owners are calling “fishy” marketing tactics, “an obvious scam,” and a “sneaky way of doing business.” They’re venting in the comments of a Merchant Circle post I wrote in September, 2006, which described the strange, automated marketing calls Merchant Circle was making.

This blog isn’t the only place small business owners are reporting such marketing calls. An old John Battelle post about Merchant Circle has a running commentary that details the types of calls Merchant Circle makes to small businesses. You can start here to read comments left within the past month.

The Merchant Circle Call

Based on comments from small businesses, it appears Merchant Circle has a couple different types of marketing calls. On John Battelle’s blog, Carla G. reports:

“They said the business I work for had a bad review and to go to a certain site and enter your work phone number to view it. I did that to see what the negative review was and it turns out that they just wanted me to sign up my company on their website…. I tried to pull up this bad review on the web, but there was none.”

That’s the same technique I wrote about back in 2006 — a warning that someone had just left a negative review about your business, and an encouragement to visit merchantcircle.com to claim your business listing and respond to the negative review. Except there were no negative reviews to be found.

But there are other calls being made, too. Here on this blog, Fran says:

“I received a call this morning from merchant circle and they have the same message but they took out the ‘negative comment’ part and just said that someone has left a review about your company.”

But it’s not just about positive or negative reviews and comments. Readers Tom C., Dino Kokotas, and YZ Consulting all say that Merchant Circle is using Google’s name/clout to get businesses to claim their listing. Here’s how Dino Kokotas described it:

“I also received an automated call stating that someone found our business via a google search and was wondering if we are a valid company.”

And it’s not just phone calls. This past December, Mike Blumenthal reported getting emails from Merchant Circle that said his business had received two ratings … ratings he was unable to find on his business profile.

When asked to comment via e-mail on the recent outbreak of upset comments from small business owners, a Merchant Circle spokesman refused to discuss the company’s marketing tactics, only giving this response: “MerchantCircle is dedicated to helping local merchants get their businesses online. We provide simple, affordable services for local business owners to attract new customers online.” The e-mail then listed several positive testimonials from Merchant Circle customers.

Why? It’s All About the Signups

Merchant Circle has been anxious to tell the world about its growing number of registered businesses. The home page boasts 450,000 such businesses today:

That number is up substantially over recent months:

• A September 26, 2007 press release refers to “more than 200,000 local merchants.”
• Less than a month later, on October 23, 2007, another news release mentioned “MerchantCircle’s 250,000 merchants.” The growth led to $10 million in new funding in November, 2007, and a partnership with IAC (owners of Ask.com, CitySearch, Ticketmaster, and others).
• Most recently, an April 3, 2008, news release claims “more than 385,000 members.”

Perhaps Peter Krasilovsky put it best in November, 2007, when he reported on the new funding and IAC involvement at a time when Merchant Circle claimed 250,000 registered businesses:

“…the claim of 250,000 registered businesses, while impressive, should be sliced and diced for exactly what it is. The vast majority may have been duped into registering by an aggressive telemarketing campaign that strongly implied these businesses had a negative review, so they should go online and check it out. To see their ‘review,’ they first had to register.”

All the way back in October, 2006, when the original dust-up over their marketing tactics hit, Merchant Circle said they were calling off the cold-calling campaign: “In response to merchant emails, the contact campaign in its current form has been ended.”

Based on the latest round of upset small business owners, the contact campaign is alive and not-so-well.