You Can Lead a Horse to Water

Very recently we had a very popular Retailer come to the Exceed offices to discuss pay per click.  We discussed the average cost per click of typical keywords.  We then defined potential revenue based on the current performance of their website and clearly defined all the benefits and opportunity associated with a pay per click strategy (landing pages, quality score etc…).  As soon as we finished, one of the owners of the Retail chain began to explain the extremely tight margins along with the huge overheads to manage the business.

“Times are tight, and every penny counts.”   This is nothing we haven’t heard before, but with the recession, it is more topical now than ever, and the Retailer would not let us forget it.

Once the Retailer painted this extremely bleak picture, he said they will not proceed with the pay per click option.

Once the meeting was finished, I began to think about their situation, and wondered, if this is how the retailer rationalises all marketing and new business communications.  If so, then how does he justify the costs associated with radio and print advertisements in the NZ Herald (they spend on average $20k to $30k per month on these two mediums)!?

The answer?  We are dealing with a mind set (a way of thinking) which is hugely flawed.

Despite our efforts the Retailer did not understand the key concepts of online business growth through Pay Per Click:

Push vs Pull.  There was no appreciation of the “Push” and “Pull” marketing concept.  This Retailer lives in the world of Push advertising and has done so for many years.  It becomes increasingly difficult to have them gain an appreciation of a new concept like Pull, when they have believed in a certain concept for so many years.  This requires a major cultural shift in their business growth philosophy.

Competitive Advantage.  The Retailer has four locations based in Auckland, a very competitive offline market.  The Retailer did not understand how pay per click, if done properly, can quickly become competitive advantage.  This opportunity was clearly evident once we reviewed the state of pay per click conduct for their competitors online.

Customer Acquistion.  The Retailer was told about the opportunity in acquiring new customers through this channel and recognising the lifetime value of an online customer can easily become far more valuable than an offline customer.  The concept of lower acquisition costs via Pay Per Click was not properly digested as well.

Growth via unbranded keyword terms.  Simply put, if the website can drive needs driven visitors (visitors who type their intent into Google vs someone typing in a brand name) to the site and turn them into customers, in the future they become brand loyal customers.  Other than SEO (which is very limiting for unbranded traffic), pay per click is the only true method in driving unbranded traffic to the website.

Driving unbranded traffic combined with making sure the website converts, is the key element in online business growth.  Did Amazon spend any money on Newpaper and Radio advertisements to grow their business??  Amazon grew by converting needs based visitors (people looking for a book, not a brand) into loyal customers through a customer centric website, brilliant customer services and efficient delivery systems.

Sounds convincing!  You might be saying to yourself, “Greg must be a horrible sales person!  How could anyone not understand the value of pay per click and how it can build an online business?”  Firstly, I am a horrible sales person!!  But you do not need to be a sales person to talk common business sense.

The issue is not in the delivery of a sales pitch, it is on the old school culture which is alive and well in New Zealand Retailers.  They are conditioned to believe the old methods of communication to their market is the most effective way to grow business.

This belief still remains strong despite the downward ROI trends for this offline approach.  They all know its happening, they just don’t want to change.

We don’t have time to try and convince old school Retailers the business rules have changed.  We are too busy making our existing clients lots of money.

Exceed has the tools and methods to open the flood gates.  It’s not our job to lead a horse to water, we just need those who are thirsty.