A founder I will call Priya emailed me last spring with a question I get roughly twice a quarter, phrased slightly differently each time. Hers was: “We have budget to list our SaaS on five platforms. Two are directories, three are marketplaces. Where do we put the money?” She had already paid for one of them. She was about to renew. She wanted a second opinion before she did something expensive twice.
This article is the long version of the reply I sent her, with the numbers anonymised and a few principles I have since refined. If you have ever stared at G2, Capterra, AppSumo, and a regional B2B directory wondering which of them is actually doing work for you, this is the walkthrough.
The client question that started this
A SaaS founder’s listing dilemma
Priya runs a project management tool aimed at architecture studios. ARR around $480k, average contract value $1,200 per year, sales cycle about three weeks from first touch to paid plan. She had an active Capterra listing (pay-per-click), a free profile on a niche AEC marketplace, a free listing on Jasmine Directory, and she was being pitched aggressively by two more vendors. Her marketing lead wanted to “be everywhere”; her CFO wanted to know which line item to kill. Both were partly right, which is the worst configuration for a decision.
The first thing I asked was whether she could tell me, per platform, how many trial signups came from each. She could not. The second thing I asked was whether she knew the difference, operationally, between the platforms she was paying. She paused. That pause is the whole problem.
Why “just list us everywhere” backfired
“Be everywhere” sounds like risk management. It is actually the opposite. Every listing has a maintenance cost (screenshots, pricing updates, feature descriptions, review solicitation, response time on inbound messages) and when you spread that effort across eight platforms, none of them get the version of you that converts. The Seamless.AI write-up on directories puts it bluntly: most SMBs do not have the manpower to stay on top of every database they are on. I have seen this fail when a founder lists on six platforms and lets three go stale; the stale listings then rank for the brand’s own name and present 2022 pricing to a 2024 buyer.
Priya’s Capterra listing was current. Her marketplace profile had a screenshot from a previous product version. That alone was probably costing her trials.
Mapping intent before mapping channels
Before I will recommend a single platform to anyone, I want to know the search intent of the user who will find them there. On a directory, the user is usually in evaluation mode: comparing options, reading reviews, building a shortlist. On a marketplace, the user is closer to purchase intent: they have a budget, they want to transact, they may even want to do so without leaving the platform. These are not the same person on the same day.
The Jasmine Directory simple guide describes directories as business directory, which I think is the cleanest framing I have read. A directory is the 2 AM plumber search. A marketplace is the “I am buying a drill bit and I want it tomorrow” search. Same person, different mode, different platform, different conversion behaviour.
Walking through the directory versus marketplace fork
What changes when transactions happen on-platform
This is the single biggest functional difference and most founders miss it. A directory lists you and points the buyer at you. A marketplace lists you, holds the buyer’s payment, processes the transaction, often handles dispute resolution, and in many cases owns the buyer’s contact details forever. The Wikipedia entry on business directories is careful to note that Wikipedia’s entry on business directories, and I would add: they are also not transaction systems. They are signposts.
The implication: on a directory, you can email the lead next year about a new feature. On a marketplace, you often cannot, because the buyer’s identity is intermediated.
Trust signals: reviews on a directory vs ratings on a marketplace
Reviews on a directory like G2 or Capterra are long-form, qualitative, and frequently edited for “balance” by the reviewer. They are written by people in evaluation mode, often comparing your product to two or three others in the same review. They function as social proof for shortlisting.
Ratings on a marketplace, like the five-star number under an Amazon listing or a Fiverr gig, are post-transactional. They reflect fulfilment more than fit. A user who got their package on time gives five stars; a user who hated the product but received it promptly might give four. The Jasmine Directory guide notes something I have found to be true in practice: a 4.6 rating with three hundred reviews often ranks below directories’ algorithmic preference compared to a perfect 5.0 with three. Volume and authenticity win over perfection.
Myth: A higher star rating always means a better-converting listing. Reality: Review depth and recency outperform raw averages on most directories. A 4.5 with 200 detailed recent reviews routinely beats a 5.0 with 8 thin ones, both for algorithmic ranking and for human shortlisting.
Lead ownership and who controls the customer relationship
On Priya’s Capterra listing, when a user clicked through, she got the email address, the company name, sometimes the phone number. Her sales team owned the follow-up. Her CRM was the system of record. If Capterra raised their CPC by 40% next quarter, she would still have those leads in her database.
On the AEC marketplace, by contrast, transactions were processed through the platform. The buyer’s billing details belonged to the marketplace. Renewal communications went through the marketplace’s email system, which meant a percentage of her revenue was effectively rented from a landlord she did not own. This is fine, sometimes. It is also a structural risk that no one models until the marketplace changes its terms.
The fee structure tell
If you want to know quickly whether a platform is functionally a directory or a marketplace, look at how it charges. Flat annual fee, pay-per-click, or pay-per-lead is directory behaviour. Commission on transaction value, payment processing fees, or take rate on completed orders is marketplace behaviour. There are hybrids (G2 charges for premium listings and also sells aggregated review data back to the SaaS companies being reviewed, which is a fascinating dual-sided model), but the dominant revenue mechanic tells you almost everything about how the platform will treat you.
Did you know? The world’s first telephone directory was issued on 21 February 1878 by the New Haven District Telephone Company in Connecticut, according to Wikipedia’s entry on business directories. Specialised directories predated it: the London and Provincial Medical Directory has been running since 1847.
Running the numbers on a real listing decision
Now to Priya’s actual figures. I pulled six months of attribution data out of her CRM, cross-referenced it with platform dashboards, and built a small spreadsheet. Numbers are rounded for clarity but the proportions are intact.
Directory cost: $340/year, 47 inbound leads
The smaller directory listing (not Capterra; a niche AEC business directory with a flat annual fee) had cost her $340 for the year and had delivered 47 inbound leads tracked through a UTM parameter. Of those 47, 11 started trials, 4 converted to paid, and the average contract value was $1,200. So $4,800 in first-year revenue against $340 of platform cost. That is a 14x return on the platform spend, before you count the team time it took to maintain the listing (probably another $200 in loaded labour).
Marketplace cost: 18% commission, 112 transactions
The AEC marketplace was different. No annual fee. 18% commission on every transaction. Over the same six months, she had processed 112 transactions through the marketplace, totalling $58k in gross billings. The marketplace had taken about $10,440 in commission. Her net revenue from the marketplace was therefore $47,560, against a “platform cost” of $10,440.
Calculating effective CAC for each channel
Customer acquisition cost is where the comparison becomes honest. On the directory: 4 paid customers at $340 platform cost plus an estimated $400 in sales follow-up labour equals roughly $185 CAC per customer. On the marketplace: 112 customers acquired through commission spend of $10,440 equals about $93 CAC per customer. Half the unit cost.
But the marketplace customers had a lower lifetime value, because Priya could not easily upsell them. The platform owned the renewal communication channel and pushed competing products into the same inbox. Her LTV on directory-acquired customers was roughly $3,400 (multi-year, with expansion). Her LTV on marketplace-acquired customers was about $1,400 (single-year, mostly).
| Metric | Directory channel | Marketplace channel | Which wins |
|---|---|---|---|
| Platform cost (6 months) | $340 | $10,440 | Directory (absolute) |
| Customers acquired | 4 | 112 | Marketplace |
| Effective CAC | $185 | $93 | Marketplace |
| LTV per customer | $3,400 | $1,400 | Directory |
| LTV:CAC ratio | 18.4 | 15.1 | Directory (narrowly) |
| Lead ownership | Vendor owns | Platform owns | Directory (important) |
Why the marketplace looked worse on paper but won
Here is where I have to admit I changed my mind during the engagement. My instinct, from the LTV:CAC ratios alone, was to recommend doubling down on directories and pulling back from the marketplace. The directory ratio was better. The lead ownership was better. The customer relationships were richer.
But absolute volume matters when you are pre-Series A and burning runway. The marketplace delivered $47k net in six months against the directory’s $4.5k. Priya could not pay her engineering team out of the directory channel’s superior ratios. She could pay them out of the marketplace’s lower-ratio, higher-volume cashflow. We kept both. We renegotiated the marketplace commission down to 15% by committing to an annual minimum. We doubled the directory budget. We killed two other platforms that were neither directories nor marketplaces but some confused hybrid that delivered nothing.
Quick tip: When you have a directory channel with a great LTV:CAC and a marketplace channel with mediocre ratios but high absolute volume, do not pick one. Pick both, then negotiate the marketplace fee down using your volume as leverage. Most marketplace account managers have 200-400 basis points of discretion they will use to keep a steady seller.
Principles I pulled from this engagement
Directories sell visibility, marketplaces sell completed deals
This is the principle I now lead every founder conversation with. A directory’s product is attention; you are buying the chance to be considered. A marketplace’s product is closed transactions; you are buying access to a buyer who has already decided to spend money today. These are different goods, priced differently, and they belong on different lines of your marketing budget.
If you are early stage and you cannot survive on attention because your conversion machinery is not built yet, marketplaces are usually the better first bet. If your conversion machinery is good and you want to compound brand presence over years, directories are the better long-term investment.
Margin tolerance determines which model fits
Marketplace economics work for sellers with gross margins above roughly 40%. Below that, an 18% commission is the difference between profitable and not. I have watched a furniture maker friend take 22% margins on a $900 chair, list on a marketplace that charged 15%, and discover that after platform fees, payment processing, and the platform’s mandatory free-shipping policy, he was netting about $40 per chair. He could have made more money taking a weekend job.
Directories charge flat or per-click; the cost is fixed against your revenue, not proportional. A high-margin SaaS does not care about a $340 annual fee. A low-margin physical product seller cares enormously about an 18% commission.
The discovery-to-purchase distance test
Ask: how many steps lie between a user first seeing your listing and them paying you? If it is one step (click, buy, done), you are in marketplace territory and you need that low-friction transaction infrastructure. If it is six steps (read review, compare features, request demo, talk to sales, negotiate contract, sign), you are in directory territory and the platform’s job is to start the conversation, not finish it.
Myth: Marketplaces are always better because they bring transactions, not just leads. Reality: Marketplaces are better when your product fits frictionless purchase patterns. For considered B2B purchases above roughly $5k, the transaction-on-platform model often confuses buyers who expect to talk to someone before they spend that much.
How the call changes under different constraints
The Priya answer was specific to her: SaaS, $1,200 ACV, three-week cycle, decent gross margin, pre-Series A. Change any of those and the recommendation shifts. Here is how I would think about it under four common constraint scenarios.
graph LR A[Tight budget <$500/mo] --> B[Marketplace first] C[Regulated sector] --> D[Directory primary] E[Two-week launch] --> F[Marketplace audience] G[High ACV $40k+] --> H[Directory + demo] B --> I[Reassess at 90 days] D --> I F --> I H --> I
Tight budget under $500/month
If a founder has less than $500 a month for listings, marketplaces almost always win for the first six months, because most marketplaces charge nothing upfront. You list, you wait, you pay only when you sell. Directories with flat annual fees are technically affordable at this budget but the per-channel concentration risk is high. I would suggest one free directory listing (where the Library of Congress’s Consultants and Consulting Organizations Directory is a useful starting point for finding free, credible options) and one or two relevant marketplaces. Save the budget for the moment you have proof a particular channel converts.
A regulated industry like legal or medical
Marketplaces struggle in regulated sectors because the transaction-on-platform model bumps into compliance, disclosure, and licensure requirements. A solicitor cannot really be sold like a pair of headphones. Medical directories have been around since 1847 for a reason: regulated professions need editorial gatekeeping, verification, and credentialed listings that survive auditing. In legal or medical, I push clients toward directories almost every time, with one exception (lead-gen marketplaces that pre-qualify and route enquiries, which behave more like directories than transactional marketplaces).
This is also where curated business directories with an editorial standard earn their keep; a listing that has been reviewed by a human carries weight that an algorithmically aggregated profile does not.
A two-week launch timeline
Two weeks is too short to build directory presence that performs. Directory listings need to season; they accrue reviews, they gain ranking, search engines pick them up as trust signals for local search only after they have been live and consistent for months. If the timeline is two weeks, you want a marketplace that already has traffic; you are renting an audience, not building one. Pay the commission, get the volume, and reassess in 90 days.
What if… you launched on a marketplace for the first 90 days to generate cashflow and customer reviews, then used those reviews as content for a directory profile launched in month four? The marketplace seeds your social proof; the directory captures it for the long game. I have used this sequence twice and both times the directory ramped faster than it would have cold.
Selling a $40k product instead of a $400 one
High ACV products almost never sell well on transactional marketplaces. No one is putting $40k on a credit card in three clicks. The buyer wants a salesperson, a security questionnaire, a procurement process, a contract redline. Directories support that. The platform’s job becomes positioning your firm credibly enough to earn a demo request, not closing a sale. For enterprise software, professional services, complex industrial equipment, a curated directory plus targeted content beats any marketplace I have seen.
Did you know? The Consultants and Consulting Organizations Directory lists more than 26,000 firms and individuals across 14 fields of consulting activity. Specialised directories at this scale exist for almost every B2B vertical; the problem for most founders is not finding directories but choosing between them.
What I’d tell a founder asking tomorrow
The three questions before you list anywhere
Before any platform decision, I want a founder to answer three things in writing. First: what is your gross margin per unit, accurately, including support and hosting? Second: where, in the buyer journey, does your product get chosen (during browsing, during shortlisting, during procurement)? Third: do you have the operational capacity to respond to inbound within one business day, every business day? If the answer to the third question is no, do not list anywhere yet. A neglected listing damages your brand more than no listing does.
kanban
Evaluate
[Map buyer intent]@{ priority: 'High' }
[Check gross margin]@{ priority: 'High' }
[Audit inbound capacity]@{ priority: 'Medium' }
Test
[Run 90-day UTM tracking]@{ assigned: 'marketing' }
[Pull CRM lead source report]@{ assigned: 'marketing' }
Decide
[Pick directory or marketplace]@{ priority: 'High' }
[Negotiate commission rate]@{ priority: 'Medium' }
Cut
[Kill stale hybrid listings]@{ ticket: 'Q3-review' }
I have watched founders skip these questions and then complain that “directories do not work for us”. They worked fine. The founder did not.
Where hybrid plays make sense
The two-platform combination (one directory for compounding visibility, one marketplace for cashflow) works for a lot of B2B SaaS in the $500-$5,000 ACV band. Capterra plus a vertical marketplace. G2 plus AppSumo for a launch burst. A regional business directory plus a procurement-driven B2B marketplace. The directory builds the brand asset, the marketplace pays for the engineering team this quarter. Both are real. You are allowed to want both.
For founders shortlisting curated directory options, I tend to recommend looking at a mix of broad business indexes and vertical-specific ones. The Jasmine Directory is one of the curated general-business options I keep on my shortlist when an editorial review process matters; for vertical-specific directories the choice depends entirely on the industry, and the NYPL’s research guide on business directories is a surprisingly useful starting point for finding sector-specific options that have been around long enough to have actual authority.
Signs you picked wrong and should switch
There are four signals that tell me a founder is on the wrong platform mix. One: the listing has been live for six months and you cannot attribute a single closed deal to it. Two: the platform’s traffic profile (which you should check in your analytics) shows visitors bouncing within 20 seconds, which usually means search intent mismatch. Three: your cost per acquired customer through the platform is rising quarter on quarter while your conversion rate is flat. Four: you find yourself dreading the platform’s monthly invoice, which is the founder’s gut telling you what the spreadsheet has not yet confirmed.
If two of these four are true, switch. If three are true, you should have switched last quarter. If all four are true, you are paying tuition for a lesson you have now learned.
Myth: Once you have picked a platform you should commit to it for at least a year to give it a fair chance. Reality: A well-built listing should show measurable signal (impressions, click-through, lead quality) within 60-90 days. If the platform is delivering nothing by day 90, another nine months will not fix it. The “give it a year” advice was invented by platform sales teams.
If you want one piece of homework before you spend another pound on a listing, do this: open your CRM, filter your closed deals from the last twelve months by lead source, and rank the channels by net contribution after platform fees. If you cannot run that filter because your lead source data is incomplete, fix that first. The platform decision is downstream of the attribution discipline. I have never seen a founder make a good listing call without it.
