I went to the Business Start-up event at Olympia on Thursday, and got talking to an SEO guy.
It seems like most people have an interest in SEO these days, and I’m no exception. Even though there’s a huge number of books on the subject you can usually pick up a few anecdotes or tips from someone working in the field.
How not to manage online adspend
He was telling me about one of his clients, who had purchased a franchise selling health supplements. The client paid to have a website made, but was disappointed when it only ranked number 600 in Google search results. The situation stayed like this for a few weeks, with the site doing little or no business. What are most people trained to do in a situation like this? Pay for Google ads of course!
This is what the guy did. He set his budget at a few hundred pounds, expecting it to last a month. Initially there was very little traction, and the man decided enough was enough - he’d take a break for a few days. When he checked it again over a week later, he realised that he’d gotten 60 hits. But sadly, the conversion rate was zero …
And to make matters worse, all of those hits were generated via Google ads. In the space of a week he’d blown hundreds of pounds, with absolutely no return. Yikes!
I’m sure this happens all the time, but franchises must be more susceptible than other businesses. There could potentially be a hundred other franchisees, all playing the same game. Of course he was never going to be high in the rankings!
In terms of the conversion rate problem, the guy should have taken an entirely different approach. He should have identified the relevant communities online, and tried to build a relationship that way. Once he had some traffic (and hopefully a non-zero conversion rate) then he could have made a more informed decision about the effectiveness of ads. If he had a 20% conversion rate, and average profit per transaction of £5, then to pay more than £1 per click would be insane.
Even if the strategy was to build up a customer base, it’s still a flawed approach. The aim of a new business must be to protect its cash flow, otherwise it’ll go bust (especially in the health supplement market, where there isn’t any VC money sloshing around).
Know who your customer is
I took away another lesson - engineer your website from day one to perform well in search rankings. There’s no point being a generic company with no USP. In order to optimise for SEO you need to have a very clear idea of who your customer is, and then tailor the content appropriately. It isn’t rocket science - but it’s something that is often overlooked.