Word of Mouth Marketing vs Search: When Top Google Rankings Are Worthless

Nov 15th

As an SEO professional it is easy to over-estimate the value of top search engine rankings. After all, we sell traffic and rankings. In some cases (thin affiliate sites, for instance) good SEO is the difference between a website worth $34 dollars and $34 million dollars, but for many service based businesses top rankings have little to no value.

Top Rankings for the Wrong Keywords Can Harm Businesses

One of my clients who sold expensive physical products with high shipping costs saw that there was a lot of search volume for their keywords using words like discount and cheap as modifiers. We ranked that site for those keywords, but we regretted doing so.

That client's business almost got destroyed through the combination of...

  • having more leads than they could possible handle (causing customer service quality to drop and them to miss some good leads)
  • Chargebacks from sleazy customers that would steal the product and then claim they never got it. (As it turns out, some leads are worth less than nothing).

When you service clients shopping on price you often end up with a negative profit margin. Unfortunately, unlike during the late 90's, you can't make up for losses through high growth by selling your company's stock to suckers. :)

Rankings Do Not Sell Intangible Items or High End Services

It is a bit of a paradox, but is something that should be discussed and explained more often than it is. About 3 years ago this site stopped ranking in Google for "seo book" because Google filtered out many sites that were aggressive with anchor text. Given that this site is linked to by SEO savvy people, the odds of it getting lots of focused anchor text aligned with the brand keywords are quite high.

In spite of this site selling a how SEO ebook, sales during the month when the site was not even ranking for its own brand name were (at that time) 85% of the all time peak in sales. Imagine seeing a site selling SEO information not even ranking for its own name, and then buying SEO information from that site...that is exactly what hundreds of people did, thanks to word of mouth marketing.

If Google banned this site we would still get lots of sales because so many people talk about us and recommend us.

Brands Sell High End Services

Branded keywords convert to sales at a much higher rate than non-branded keywords.

Many of the most valuable and frequently searched keywords are branded searches. When someone searches for a brand they show they are (typically) trusting of that brand, and highly interested in related offers.

This site has over 1,000,000 inbound links and ranks for keywords like SEO. And yet if you look at our top referring keywords, most of them are brand related.

Yes Google sends us that traffic, but that demand was created through branding and word of mouth marketing. Even if Google did not exist, most of those searchers would still find their way to this website. And those are the type of people who have a high conversion rate and are loyal customers.

Word of Mouth Sells

On a few occasions this site has been recommended on top marketing blogs like Copyblogger and Seth Godin's blog. On such occasions this site usually earns far more from that mention than it does from THOUSANDS of searchers visiting the site.

Who do You Trust?

I spoke with guys like Seth Godin, Brian Clark, and Jakob Nielsen at a multi-billion dollar hedge fund's conference about a month ago. The reason they wanted to pay me to speak (and put us up in the Ritz-Carlton hotel) is because some of the companies they invested in asked them to have me come speak. During lunch at the conference I sat next to the external legal team from the hedge fund. I said to the lawyer next to me "I bet all of your business comes from word of mouth" he replied "yes. In fact our marketing budget is $0."

Compare the value of a recommendation of a company you are invested in or partnered with to what Google recommends. Google has no problem recommending search engine submission scams and in some cases even malware. They recommend...

  • whatever is popular
  • whatever is controversial
  • whatever pays them the most per click

Google can spend a lot cleaning up their marketplace, but there will always be offers that are below radar, just within the law, just outside of the law, and ones that are only legal because the law has not yet caught up with the market.

People often want to buy scams (lose 60 pounds in a month, guaranteed!!!), and Google gives them what they want.

High End SEOs Do Not Attract Ideal Clients From Ranking

Be careful who you work for! I spoke with numerous friends who run service based SEO businesses, and they all agreed that less than 1% of the people who contact them are actually worth working for.

When a client asks for an RFP they typically are not worth working with, because they are not yet sold on you and your services and are uncertain what they want. The type of person who finds your marketing company via a search engine ranking is still a shopper, not a committed buyer. They will likely buy cheap, get scammed, and then go from there.

How to Get High Value SEO Leads Actually Worth Servicing

If 99% of leads are crap, how do you access the 1% that have value? Easy...

  • Speak at conferences - I can't tell you how many clients have said they saw me speak at a conference...but almost all of the big spenders did. The people who attend these are spending thousands of dollars on learning already...it is a much bigger jump to go from $0 to $2,000 than it is to go from $2,000 to $20,000.
  • Work for companies worth promoting & provide great service - this is a no-brainer, but as Charlie Munger says "The best source of new legal work is the work on your desk." Many of our clients have either recommended other companies hire us, or had staff move on to roles at new companies and want to hire us again.

Some SEOs speak at 20 or 30 conferences a year...existing primarily in the role of traveling salesman. They generate leads, while underwaged and underskilled people "service" the clients. Rarely do the people who know what they are doing work on the accounts, but the steady speaking engagements bring in new clients.

Search Isn't All Bad

Search rankings help build awareness, invite low risk interactions (comments, reviews, etc.) that help show social proof of value, and can be a low cost lead source. But you still have to develop a relationship and build trust to sell.

It is not that search is a poor lead channel...it is just that we trust humans more than machines, and that will probably remain true long after you and I die.

Published: November 15, 2008

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Comments

November 15, 2008 - 2:43am

Awesome post Aaron. I mostly do web development and am starting doing more IM. And I have realized that probably 98% of my business comes from word of mouth. When I used to work in real estate I learned that the Realtors that went the extra mile to service their clients, always did more business. And I realized that they understood that if they could earn the trust and confidence of their client, then they were more likely to get more clients through word of mouth. I saw some Realtors negotiate a very small commission and work their butt off, because they felt that in doing so, much bigger things would happen in the future.

November 15, 2008 - 3:44am

Yup, it's all about word of mouth. When I look at rankings for those terms, I get queezy. I just naturally like making friends, and sometimes the conversation moves to my line of work. That's when opportunity presents itself.

There's seriously more than enough work in my own city, for me to live well just by networking or having seminars here.

Good post.

November 15, 2008 - 10:37am

I'm not full time freelancing yet, but the work that I do get is far beyond the time I have available. All of it has come from recommendations too, which is great!

It does mean that I've missed opportunities to build-up my identity online though, as essentially this is where people will come to find me...but beyond brand or name searches I guess ranking for something else isn't really too necessary for me now. Who knows what down the line though...

I really do like these posts about business decisions around SEO, cheers.

Ben

November 15, 2008 - 8:05pm

I have to disagree with opting out on "cheap" or "free" related keywords. It sounds like the client needed a better on-site (or automated) way to screen and segment their leads.

A simple multi-step contact or lead form could ask questions to better qualify the lead quality, and then redirect the "price sensitive" leads to another company better suited to look after their particular hot buttons.

Partnering with another company that's slightly down-market in their niche would allow them to set up a referral income stream from their partner site. I'm sure there would be plenty of new or emerging companies in the niche that would gladly accept and try to work with those leads.

November 15, 2008 - 8:49pm

Hi Geordie
In most cases I would agree with you as well, but this company in and of itself was actually catering to a cheap "do it yourself" type category, rather than the broader premium offerings that were based more on brand...so it was hard to segment out who was who...the product would cost $500 to $2,000 either way.

Competition and increased shipping costs (due to high gas prices and an input into the raw goods) were factors that did not let margins get very large.

When a person would steal the product and do a reverse charge it was brutal. One did a reverse charge of 100% of the payment even after they were sent a partial refund for the damaged portion of their order and sent a replacement...ie: they kept 150% of goods and got 150% of their money back.

One would need to make 5 or 10 more sales to hope to make up for that type of loss...and in many cases some of those additional sales would end up having products damaged during shipping, etc.

November 16, 2008 - 10:20pm

At long last an SEO'er stating the truth (as I have done previously about word of mouth marketing). I too rank well online for competitive keyword phrases associated with SEO and get a number of online enquiries for my services. I (for ethical reasons) turn away quite a bit of web generated business as I just feel the client is only interested in the lowest price.

Having been in the industry for over 7 years with a successful portfolio why should I just end bidding for their work at the lowest prices. So I am careful who I send out to RFP's to and each poposal does NOT go into too great a detail.

I agree that speaking at conferences can help but I beleive its difficult to get in and speak at the prestigious and well attended seminars. Maybe the way is to start your own? I know quite a lot of people in the UK SEO industry but have yet to be invited to speak... I think its because I've just kept my head down and got on with my own SEO work.

On the other hand word of mouth advertising just works so bloody well, its amazing. I get more business from customer recommendations than anything else (and its so much easier persuading that kind of prospective client by showing them their contacts success with SEO services I provided to them).

Compared to the conversion rate from enquiries from the web my client referrals are way out front. It makes me very proud that my clients are pleased enough to recommend me. Shows I must be doing something right with SEO!

November 17, 2008 - 12:01am

I think the easiest way to get asked to speak is to attend a couple conferences and write a blog. But I agree that it can be a bit hit or miss.

Any way you slice it (brand, community interaction, rankings, exposure, readership, links, content quality, content quantity, etc.) this site is likely a top 10 site in the SEO space, and some conferences even wanted to do media partnerships with the site without asking me to speak.

November 17, 2008 - 5:40pm

I've learned the importance of word-of-mouth when I owned my first small business, and later, when talking to hundreds of small business owners, about what works best for them.

Everyone will tell you that word-of-mouth is key to their success, but it's hard for them to know who the promoters are, and how to invest into and accelerate WOM.

Last year, I started trustedones.com to address this problem. It is a social knowledge network (social WOM) that nurtures word-of-mouth and helps local small business. We've gone "live" about a month ago, and the small business functionality will go beta in a few weeks.

It will be interesting to see how well we can capture WOM, and help local small business.

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