Is 1 Keyword Worth $100,000 In Sales Revenue?
KEYWORD RANK & THE SERP LOTTERY
If I asked you to buy a $100 raffle ticket for a 1 in 1000 chance to win $100,000 in cash, would you do it? As you consider the probabilities and grab your checkbook, you are probably fantasizing about the shot at cashing in on the investment of a lifetime. But when it comes to local business owners investing in the opportunity to rank important keywords that produce hundreds, thousands, and even millions of dollars in sales revenue - it just isn't quite as sexy a proposition. We'll break down the numbers in more detail in just a bit, but for moment, let's wrap our heads around the importance of keywords and search engine rank pages (SERPs).
For prospective customers to find your business in local search, your website must rank for the keyword they entered. For example, a customer will either type or speak a keyword like 'carpet store sacramento' and a search engine such as Google, Bing, or Yahoo will spit out a list of local results. If your carpet store does not rank for that specific keyword or a similar variation, your website will not appear in organic results. Let's be clear, the only SERP we care about is good, ole number one. Page 2 and beyond in Google should only serve as a rank for how badly you're losing the game. More importantly still, only the top 3 businesses according to the search engine bird nest of algorithms are listed in what's known as the Snack Pack. Missing out on page 1 of Google and the Snack Pack can easily result in thousands of dollars in lost sales.
There are two essential marketing and advertising strategies to move your business to the top of page one in search engines - Search Engine Marketing (SEM) and Optimization (SEO) and Pay-Per-Click (PPC) Advertising. They are best explained in the analogy of a teeter-totter. Although the two can and should be used in conjunction as a best practice, when your investment into SEO increases, the investment into PPC Advertising should effectively decrease over time. Further, SEO is a longer term, stabile investment that creates massively valuable ROI in the long haul. Conversely, PPC Advertising is more of a short term investment with some risk involved. Although it can produces ROI quickly, it is only sustained by continued investment.
MINIMIZING RISK TO MAXIMIZE REWARD
Now, back to the math of things. Let's throw a few more examples into our raffle and see how you feel. Then, I will show how the investment into Local Business Search Engine Marketing will have you feeling like Warren Buffet at an annual meeting for Berkshire Hathaway shareholders.
Just for shenanigans and giggles, here are three more examples of a ticket I want to sell you for three separate but equally enticing raffles. Assuming you have to buy a ticket for one raffle, which one do you feel the most compelled to invest in?
A. One $100 raffle ticket for a 1 in 1000 chance to win $100,000.
B. One $1000 raffle ticket for a 1 in 100 chance to win $100,000.
C. One $10,000 raffle ticket for a 1 in 10 chance to win $100,000.
Which one did you choose? The psychology behind the decision is really what's interesting here because the answer for most people depends on how much they are willing to lose instead of the odds of winning. If you selected (A), then it is likely you are willing to accept the tougher odds (0.1%) of winning because of your willingness to lose $100. If you selected (B), then you might be feeling good about the 1% chance of winning 100 times your money, offset by the risk of losing $1000. But if you selected (C), then you are a logic-based high roller willing to invest more for a far better chance (10%) at a big time reward ($100,000).
The reason I like to go through that situational exercise is to demonstrate the difference in gambling on and investing in the success of your business. When you gamble on your business, despite all the great hunches and intuition, you are still assuming a considerable amount of risk even though the reward is good. But investing in your business implies you have researched the situation, the odds, the risk versus reward, and then, you make an educated decision to place your money in a channel where the potential for return on investment (ROI) is very solid. Further, you understand this investment has a residual positive effect even if the immediate return is less than planned. When you consider the options, doesn't it make sense to invest rather than gamble?
SALES AND RETURN ON INVESTMENT
So, here is the situation. We are in pursuit of $100,000 in sales of your products or services. The period of time is less important right now, but we will touch on that as well. Depending on the suggested retail price of your product or service, $100,000 in sales could be a daily, weekly, monthly, or yearly target. And let's not forget that your investment into earning those sales can also dictate the speed in which it happens (the more you spend, the faster it happens).
When you desire to stop gambling on your business and start investing in your business, you will then understand the importance of search engine marketing (a component of digital marketing). As we discussed earlier, your efforts to invest will involve removing risk and improving reward. Enter keyword rank, and our mutual friend in business, the search engine. Search engines like the most widely used Google, and the lesser used Bing and Yahoo platforms, hold within their algorithms a treasure for local businesses. Let's crunch some numbers and provide some real world examples.
Let's revisit our search for carpet and various related products and services in the Sacramento, CA area. After some keyword research for 'carpet store sacramento' we find it and associated variations averages anywhere from 400 - 800 monthly search queries. For simplified math, we can jump into the middle and use 600 average monthly searches. That is the equivalent of 7200 searches per year for a very focused set of keywords that indicate a high level of interest in carpet in and around the Sacramento Metro area.
We are going to make some common sense assumptions here so our math exercise will be easier to swallow. Feel free to argue the opinions all you want, the point being made is real and factual, and it's pretty easy to see the opportunity for local businesses when they use digital marketing and search engines for lead generation tools.
Considering 7200 annual search queries, let's be rambunctious and throw half of them out. We will chalk that half up to duplicate searches, competitor research, and weirdos who enjoy scanning the Internet for varying grades of berber carpet. That leaves us with 3600. Carpet ranges in price from roughly $2 per square foot for the cheap stuff up to $8 or more per square foot for premium material. Again, we will grab the middle and use $5 per square foot. Home sizes and floor coverings vary wildly depending on the area you live in, so we will use 1000 square feet as a general guideline for a baseline carpet installation job. Please note for this example we are not calculating the actual installation cost. Many carpet stores subcontract the installation to flooring contractors which then veers off into another keyword search category we can talk about at another time.
Now, here comes the fun part...
- 3600 annual searches (300 per month)
- 1000 square foot carpet jobs
- $5 per square foot retail
If my math serves me well, that means each carpet sale is potentially worth $5000. At 3600 annual searches, that brings us to a grand prize total of $18M. Yes, you read that right. 18,000,000 dollars. That number works out to $1.5M per month in splendiferous carpet sales!
For the Sacramento area carpet store owner and sales staff to find their keyword valuing $100,000 in monthly sales, they would only need to latch onto about 7% of those monthly searches! Before you start screaming about variables, and your hometown economy, and wacky numbers - just slow your roll. Of course, no system is perfect. There is no way to guarantee evenly distributed monthly sales, or industry trends that challenge retailers, or how politics and economics will affect the day.
But let's go back and think about the raffle tickets I was offering above. If you decided to buy the $100 ticket, then you were willing to face 1 in 1000 odds (0.1%) of winning the $100K grand prize. What you were actually admitting is you were willing to lose at a low cost, rather than win. It's time to change the way we think!
For our carpet store owners, sales managers, and marketing department managers in the Sacramento area, they are eyeballing $18M in annual sales that is up for grabs. But instead of gambling on minuscule odds for a chance to win it all, there is a way to beat the odds and play for the big win every single month. It's called Local Business Search Engine Marketing service from BridgeHouse Marketing.
Listen folks, this is not a gamble - it is an investment. And the return on investment comes via sales from prospective customers seeking to spend money on the products and services offered in your area. If you are not willing to pay digital marketing experts to manage this service (a damn shame, because you have better things to do), then I wish to throw myself on the mercy of the court and plead that you at least take a moment to consider learning the SEM game and the impact it will have on your business.
THE LEGACY OF WINNING IN BUSINESS
The bottom line is that in a field of ten competitors in a niche business (let's stay with the carpet stores), the top third are going to hustle and focus their digital marketing, sales, product selection, and service offering efforts on dominating the business scene in their area. The middle third are likely satisfied where sales are currently and willing to play a reactionary game, meaning they will make a move to increase sales only when it is clear recent sales are trending downward. The bottom third probably feel they don't have the economic firepower to reach the top third, or they could just be in a state of blissful ignorance regarding the state of business affairs.
There is plenty of room for any single business to make a bold move upward, to fight for more sales and profit, and elevate their brand status for the greater good of its owners, managers, and staff in general. But here's the real winner - the customer! If your product or service is better than the competition and provides more value to the customer, then they will always be eager to trade their hard earned cash for your offerings.
The question left to answer is, which business owner or department manager are you?