SEO and Saving Your Way Out Of Business
Is saving on marketing hurting your business?
Wait, wait… this article isn’t about spending a whole lot on marketing written by an agency who wants you to spend money. It’s about knowing if your spending is actually being wasted, which is way worse than spending too much.
I often work with companies that tell me “We tried paid search and SEO and nothing happened”. I hear it so often that I get disheartened at the same time being excited. My questions are always, “how long did you do it? How much did you spend each month? Did they tell you when you should see positive ROI?”. Almost always, it was a small amount of money, for a limited time, and they had no idea of when the program would start “paying them back” because the agency gave them a “deal” to get them started (sound familiar?).
If you are in business, you likely spend plenty of time explaining why what you sell might not be the cheapest in the city. However, there are always reasons. SEO and website builders run into the same issues. We see the same emails you do, promising new sites for a couple hundred dollars and getting you to the top of the search engines for $199! The issue is that everyone pretty much sounds the same for what they say they “do”.
However, real website ranking, the kind that allows you to “own” a market and get a real return on your business is not cheap. In fact, for many small businesses we talk to, we actually advise them to avoid the SEO strategy altogether and take market share from others in smaller ways to start out.
For companies that want dive into the deep end of the pool, we actually create a roadmap for them that actually shows them exactly how much it will be to be “number one” for the terms they will make money with and exactly how long it will take.
Usually, it shows 3 things. First, getting a real return is more expensive than they thought they would be spending. Second, it’s almost always less expensive than hiring someone in-house to handle marketing (even someone out of school). Third, it shows them that an actual plan pretty much guarantees they will get a positive return on their investment.
Let’s Do Some SEO Math…
We like to look at investments and returns on an annual basis because organic SEO takes time to ramp up.
Attorneys and Air Conditioning companies are hyper-competitive in the online world. A DUI attorney or air conditioning company will make a thousand dollars off a new client in many cases. This means that to break even, they may have to get just over one or two clients to pay for the SEO services that are filling their inbox with leads.
When you do SEO math, you look at your market, who is currently number one, and how hard you’ll have to work to get near them. From there you need to look at your leads and current close ratios for you or your sales staff. This gives you a realistic “cost” for what you can pay for a new customer. Then you back into a number that you can spend and make good ROI. You also have to dig into your (and Google’s) analytics and see where people are buying from and what keywords are actually profitable.
From there, you have to look at how long it will take you to rank for those keywords and what low-hanging fruit is available now. This will help you figure out if a campaign is actually worth it. There are also some methods for local businesses we use for free piggybacking on a competitor spending a lot on paid search (yea, it’s not illegal or “black-hat”).
If you spend $20,000 a year in SEO but only can project to make $18,000 in profit from the new business, you should avoid the spend altogether and come up with a new strategy that does work.
This is where SEO companies fall down, they give you a “deal” at $10,000 a year of effort for the campaign (the one you can’t even make money at $20,000 a year). When you fire them about 10 months in for getting no results, you’re left with a bad taste in your mouth.
What happened is that you wildly underspent and the SEO firm let you, and just took your money.
More SEO Math for Growth
Also, SEO math also helps you look at profit if you need to scale to meet demand. This way, you are looking at your situation as a business equation, not just trying to save some money on “doing that SEO stuff”.
When you engage with an agency that wants to do your SEO, you need to be talking about several things;
What do you need to do beyond “ranking”? – We typically build out sales “funnels” that help maximize close rates (yes, even for attorneys and other professionals).
Will you need to hire or train more people to handle leads? – Does it make financial sense, or do you need to adjust how you handle leads? This is where the power of those funnels comes into play.
The fact that this should be an annual program. – It’s not about locking you in a contract (which our agency doesn’t), but understanding that you might see your entire return in the last 8 months of a campaign. This is where that blueprint and ROI roadmap that told you that comes in.
What communication is expected? – This is a partnership where you can be pretty hands-off except to follow up on leads. However, you should always know what’s going on. You are pretty much paying for effort, and results will flow from that.
When should the program start paying back? – This is the big one. You should know when things start to really kick off and you should see results. You and your agency should be having discussions about this on a monthly basis and they should be able to tell you how on-track they are to make results happen.
Every business out there seems to be selling you the next big “thing”. It turns out that some of these things actually work. However, no matter what they say, that one “thing” won’t likely “revolutionize” your business like many promise and allow you to retire on an island counting your money.
Marketing costs money. It’s like anything in your business, inventory, time, equipment. However, marketing should be a profit center and not an expense. You get there with good metrics, hard work and great communication.
It’s not how much you spend, it’s how much it pays you back.