Archive for January, 2008

Pay-per-click vs. Organic Searches

Thursday, January 24th, 2008

In one of the trade magazines that I get, there was recently a “debate” about which was better for internet advertising, pay-per-click or organic searches.  I say “debate” because it was really two columns written by people with divergent view points but there was no analysis and no common ground. 

Not surprisingly, the woman who owns a company that sets up pay-per-click advertising felt that ppc is absolutely the best way to go. While a web designer felt that organic is the only type of search that matters.  Personally, I think the reality is in the middle.  Yes, you need good organic searches.  But, I think you also need pay-per-click. 

The ratio of the two will vary by business and objective but I really think you are leaving money on the table if you don’t have both.  Building organic search status takes time.  Time is a premium that most companies don’t have. They can’t wait months (or in some cases years) to move up the organic rankings.  They need a return on their investment now.  That is where pay-per-click excels.  You can be a brand new company, with a brand new, poorly-optimized website and have just as much exposure in a pay-per-click campaign as a company that’s been in business for years with a perfectly optimized website. 

But, pay-per-click is costly and time-consuming.  If you rely exclusively on ppc, your ad budget will be much larger than it needs to be.  Organic searches, once you have the website optimized, are free.  It costs you no more to get one organic click than 1,000 or 100,000.  That’s obviously not the case with pay-per-click.  And, while organic page rankings will need to be tweaked as the market changes and key word searches change, that happens fairly slowly. 

On the pay-per-click side, changes happen hourly. And, you need to be on top of it.  If you can’t be, then you have to hire someone and that’s an additional expense. As I’ve noted in other blogs, Google pay-per-click, for all of it’s really good aspects can also be a brutal place to learn and very unforgiving of mistakes.  Organic searches are much more forgiving.

So, if you want to truly optimize your on-line advertising, you need to have both organic ranking and a pay-per-click campaign.  To learn more or to get help with optimizing your website for organic page rank or a pay-per-click campaign visit www.mohawklakes.com.
 

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Discrimination against certain customers

Friday, January 18th, 2008

I went on Ebay recently to purchase a birthday gift for my husband.  I was looking for something very unusual and I thought if any place would have it, Ebay would. I was right.  I found one seller offering it.  I didn’t have a choice of sellers so I was happy when I saw that this seller had a 98% rating.  I looked through the first few reviews and they all said something to the equivalent of “fast shipper, good Ebayer”.  So, I bought the item. 

I sent the seller the money within minutes via Ebay’s sister company Paypal.  I’ve had problems with Paypal in the past, many problems actually, so I contacted the buyer so make sure the money went through.  He confirmed it did. So, I waited.  And waited.  And waited.  After 10 days of waiting, I contacted the seller.  He sent me a reply the next day.  He’s “been sick” and would ship it out that day.  So, I waited.  And waited. 

And, while I was waiting, I did some investigation.  Even though I’ve been an Ebayer almost since the beginning, I only buy a thing or two every year or so.  I don’t have a lot of feedback.  And, what I discovered while investigating is that every person like me, that didn’t have a lot of feedback, this seller would delay shipping.  The cutoff seems to be 50.  People with over 50 feedback ratings rave about how fast the shipping is.  People with less than 50 complain that they wait weeks for the product.

But, here’s the interesting thing.  Only one of those people gave him a neutral rating.  Everyone else gave him a positive rating and then blasted him in their commentary.  Initially, I wondered about this. But, what I decided is that people with just a few ratings are unwilling to blast someone (even if it’s justified) at the risk that person will leave them a negative rating.  A negative rating affects someone with less than 50 feedbacks much more than it does someone with 500.  So, for whatever reason, this seller has a policy of holding onto the product of “Ebay newbies” for weeks while shipping the more experienced Ebay users’ orders right away.  And, I will emphasize, he’s had the money now for weeks. 

It made me decide that in the future, I will pay much closer attention to what all of the feedback says not just the first few. And, I will read what people say much closer instead of relying on the ranking of good, neutral or poor.  The product didn’t arrive until after my husband’s birthday.  And, no, a box with a piece of paper saying this is what you are getting is not nearly the same as actually getting it. 

All of this made me think of the age old problem of discrimination of buyers in all forms.  The jewelry stores and car dealerships that only talk to customers who look like they can afford the expensive stuff.  Racial discrimination.  Sexual discrimination both in the form of not dealing with one sex and with taking advantage of one sex.  Stores who target young people whose employees don’t help people over 30.  People who are being discriminated against know it.  It doesn’t matter what form the discrimination comes in whether it’s overt or more subtle, it’s bad for business.  It’s bad for the business that does it.  It’s bad for the other businesses as well.  Because even though this was one seller, I now look at all sellers on Ebay a little differently.  You’re most likely a company that doesn’t discriminate.  But, if your competitors do, it could reflect poorly on you.  Something to think about as your next customer walks in the door.

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Where do your new customers come from?

Friday, January 11th, 2008

I know a real estate agent who handles high-end properties.  Several years ago we were talking about his business when he mentioned that he needs to have a very personable receptionist with a great voice because he spends $500 to get each new client to call or walk in the door. 

Initially I was impressed that he knew this. But, when I questioned him further, I realized he had no idea which of his marketing dollars brought the customers in.  He advertises in high-end magazines.  He sponsors events.  He runs ads in real esate brochures.  All of this costs him $X each year.  And at the end of each year, he tallies the number of new clients who have called or walked in the door and divides $X by that number.  He is usually around $500 per new client.  With the commissions on the homes he is selling, he can afford $500 per new customer. 

Most of us don’t have that luxury so we have to pay closer attention to where and how we spend our money.  What amazes me about this real estate agent is that he could very easily find out which of the areas he spends money on brings him the clients.  All he has to do is have his receptionist ask a very simple question, “May I ask how you heard about us?”  Some people might give you a useless answer such as “I don’t know”.  But, most people are perfectly willing to tell you. 

To me, this is especially important in industries like real estate where word of mouth is so powerful.  If, by asking everyone where they heard about him, the real estate agent finds out that 75% of his new customers are referrals, he can drastically cut back on his marketing budget.  Or, maybe he’ll find out that most new clients found his name by driving by a house for sale and seeing his sign. This costs the agent nothing.  Even if he finds out that the customers he is getting are coming from his marketing budget, he’ll be able to better use that budget if he knows what percentage of people find him in which places.  If 50% of people find him in the magazines, spend more money there. 

Maybe you own a business where you don’t speak to your customers directly.  Maybe they buy from your website.  You can still get this very important information from them.  Sometime during the checkout process, have a mandatory dropdown question that asks how the person found your website.  On dropdown questions, you will get a percentage of people who will leave it at the default (the equivalent of “I don’t know or care to tell you”) but most people will answer honestly.  That will help you to wisely spend your marketing dollars in the places where it is most effective.  For more thoughts on running a small business, visit www.mohawklakes.com

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