Wednesday, September 12, 2012

The Power Combination

To drive traffic to your website, you'll need to speak to your prospects and customers in a language they understand. This means finding and using keywords that your customers are looking for. It also means using keyword terms that few competitors have caught onto yet. This is really a pretty simple concept, like selling water in the desert. However, before you roll up your sleeves and haul your water jugs to the Sahara, you'll want to calculate the cost versus benefit of your proposition. You'll want to know how much money you stand to make by using any given keyword, and you'll want to factor in your time to market in taking advantage of this opportunity. I call this concept Keyword Economics, and it's not all that difficult to understand. It's even easier to put into practice. Here's what you need to do.
Begin With SEO:
Use Google's free keyword research tool to get good suggestions for keyword terms to use on your site. Check the number of monthly searches and compare this to the number of results found using the Google search engine. (As you check the number of results, make sure you put the term in quotation marks.)
When you divide the total number of Global Monthly Searches by the number of Search Results, that number can be expressed as a percentage. I call it my Blue Ocean Index or BOI. It shows you how much or how little competition there is for your chosen keyword. You want a result that's better than 30%. If your result is anywhere above 100%, then you've got a hungry market on your hands
BOI = Global Monthly Searches / Results
Let's say you get terribly lucky and identify a term with a 500% BOI. Even with that, you still may find yourself with very few customers in the marketplace. Just because a keyword term has a relatively high ratio of searches to results, or a high BOI, that doesn't necessarily equate to a large volume of sales. For example, if your chosen term has 10,000 searches a month and there are only 2,000 results on the whole of the Internet, you have a 500% BOI, but you may wind up with only 15 customers a month, even with an optimized website.
Keyword Economics: Calculating Your Return Per Keyword
How can you tell how much money a given term will bring you in hard dollars? The answer is easy. It's Keyword Economics. I've come up with a formula for analyzing your opportunity for any given keyword term. Here's what that looks like.
Keyword Economics makes a set of assumptions, and these are scalable. They'll work for any term you use. The assumptions, however, are a little grand - that is they involve work, and the work is up to you. Keyword Economics assumes the following:
A) You've done your homework, and you've identified keywords to use in your website domain, site content, social media, and/or any other marketing venues that are routinely crawled by the search engines.
B) You have managed to come up in position 2 or 3 on a Google search for your chosen keyword term. Coming up Number 1 is dicey to pull off - aspirational if you will, and hard to guarantee.
C) You have a click-through rate from the Search Engine Results Page of 15%. That means out of 100 people searching, 15 are clicking on your link.
D) You have a 1% conversion rate. Of the people who do click through, 1 in 100 are buying your product.
E) The average profit for each product you sell is about $20. This figure is completely arbitrary, but it's manageable enough that it works consistently with our formula.
When you blend all of these factors together and mix them up just right, you get a figure of 3%. Keyword Economics is always 3% of Global Monthly Searches when all of these 5 assumptions have been met. That means when you find a keyword term with 10,000 Global Monthly Searches, you can gauge that your opportunity for that term has a monthly Keyword Economics factor of $300. It's an educated guess, and it's a great place to start.
KE = Global Monthly Searches * 3%
The better job you do getting onto Page One of a Google Search, the more likely it is that you'll score. It all starts with activity. It all starts with you and what you do next with these formulas. The good news is, most people will not act on this powerful combination. Will you be one of them?