Making money has never been more important. Proper Search Engine Optimization mixed with a digital marketing plan, including customer search insights and a healthy portion of proper keyword strategy, is our recipe for success at Rich Benjamin & Associates. Vendors know that the web holds the key to their success. Unfortunately, the vast majority of said vendors are uneducated in Web and Social Marketing and may not be prepared for what they have ordered. Meet Rachel Brown, owner of the small Need a Cake Bakery. She became a victim of the old adage, “Be careful what you wish for, you might just get it.” More than 8,500 people took Rachel up on her Groupon offer of a 75% discount on a dozen cupcakes, forcing her to make over 100,000 cupcakes to fill all the orders. In the end, Brown lost almost $20k. “We take pride in making cakes of exceptional quality, but I had to bring in agency staff on top of my usual staff, which had nowhere near the same skills, to fill the orders. I was very worried about standards dropping and hated the thought of letting anybody down. My poor staff members were slogging away at all hours — one of them even came in at 3 a.m. because she couldn’t sleep for worry,” she told The Telegraph. “We are still working to make up the lost money and will not be doing this again.”
It gets worse… Rachel is from a town just outside of London, England; therefore the $20k quoted above is in pounds. She actually lost out-of-pocket almost $40, 000 in US currency to honor her contract with Groupon and their buyers.
Today’s economy has business people grasping at straws, so unsure are they of correct decisions. It only makes sense that people who have a business model that is laden with labor and materials costs will fail if they utilize a service like Groupon. Please understand I feel that Groupon is a good and valuable company, they provide an excellent service for some companies. However, they are in business to make money just as we all are, and their sales people are paid and have great incentives to get new products to sell online.
I feel for Rachel. I sat through a Groupon proposal with a previous company and it is easy to get swept up in the excitement. They never actually say, “You will be selling your product or service for 75% less than normal.” What they told me was, “We will increase your traffic; more customers equal a great opportunity to grow your customer base, and if your product is good, you will be able to make them a steady customer. We do all the marketing to get people through your doors by running a great offer at 50% off, then we split the proceeds 50/50. And we will cut you a check immediately. This offer will only run for (xyz) period of time. If no one buys, you’re not out anything.” Now 50% of 50% = 25%. That is what you will gross, per sale, before expenses. Can you still make money is the question? This type of deep discounting has been referred to as a “Fire Sale”. Is that how you want your company image to be portrayed?
Don’t get me wrong – there are businesses that can really do well with the help of a program like Groupon; a business or a product with fixed/low labor costs that can increase flow or service without adding to its overhead. Those are rare: a Zipline experience is a good example: fixed material and labor costs. Your labor is standing there whether the product is at low capacity or high capacity; it is a fixed operating cost. If you run 1, 2, or 25 people through, the operating expense is the same. But if your material and labor fluctuate as product is produced, and you do not account for it in a profit and loss projection this type of program is a recipe for financial disaster.
It is simple: Know your operating expenses which means know how much labor cost is per item and how much material cost goes into each item produced. If you sell a product for less than it costs you in materials and labor to produce, you will go out of business – FAST. As for increasing traffic to your store, you will only see the opportunistic customer one time…. just long enough to take what you freely give. If that customer does come back, they expect the product at the low price. Why not? You have conditioned the consumer and cheapened your product. If a cupcake is really good, the baker has a great personality, and we bond, I will gladly pay $4.00 for the experience. Think about it: a cup of coffee with a squirt of chocolate syrup and a splash of cream is almost $5.00 at Starbucks. My wife used to ask me “Why do you pay $5.00 for a cup of coffee?” My response was this, “I do not pay $5.00 for a cup of coffee, I start my day by going into my favorite Starbucks and as I walk through the door I am greeted with a smile and a friendly, ‘GOOD MORNING, Rich’… That is what I pay $5.00 for. The coffee is an added bonus.” Service is the secret ingredient in any successful business. Sure the product has to be of a certain quality, but I believe for the most part we buy into people before we buy into products.
Instead of trying to offer your product to everyone in a desperation sales technique, how about sitting down and coming up with a sales and marketing plan that focuses on the consumer who is actively looking for your product? At RB&A our first move when we acquire a new client is to understand their product, how they operate and how, why, or what their possible consumer is interested in.
In Rachel’s case, I would start my consumer Keyword Search with the term “Need a Cake” the name of Rachel’s business. There are 22,200 monthly searches for this term on average, with roughly a 20% competition for the word or term. You can write several articles in a blog and very quickly rise to the top for this term. However this term is what I would consider a (Global) term, meaning it can be used or found virtually anywhere in the world and would not do Rachel much good. Depending on the type of business and the product or service a company offers, I believe there should be a prioritization of search terms into one of the following 3 categories: Global, Regional or Community terms. After Global search terms come (Regional) terms which are a specific geographic region or area on the globe, such as individual states, i.e., Florida, or countries, like England, are good examples of Regional search terms. The most specific of the three levels would be the (Community) level search terms, these terms would be specific towns or communities. Rachel sells cakes and cupcakes; but she is not a global producer like Dolly Madison, so she should be looking for business in her region or her immediate community. Let’s narrow our search. Rachel is from Reading, Berkshire England 15-20km outside of London England, lets search
” need cake London“
As you can see by narrowing our keyword search from a Global term to a Regional or Community term we have found 9 incredible new KEYWORD search terms that with little creative writing effort will yield Rachel all the new business that she could want or handle. Ten minutes of research can open new doors that previously she had only dreamed were possible. Better yet is the fact that if we keep writing for these terms she will soon become a very trusted authority on the subject of cakes in London. Now put some sprinkles of Social Media Marketing and a good frosting of E-mail campaign and she will most definitely have a recipe for success for her business.
Loyal consumers don’t just buy a product, they buy into an experience. Consumers love to feel connected. This is the art of true sales and marketing. People want to believe, they want to be part of something. We love to be entertained in the process. Stand your product tall and shout, “Here I am and you do not want to miss out on this experience!” People will come to see what you have, and you had better make sure your product is good; or your company will suffer a quick death.
And this is why SEO/ Search Engine Optimization is the Solution! Now go out there and HAVE FUN at what you do! And for goodness sake, remember – simple math works best in 99% of cases. If you KNOW what you have in a product, you will KNOW where you can set a discounted price to maintain a healthy profit margin. Do the math before you sign anything. If your findings come back negative and the sales person keeps pushing for the sale, do not be afraid to say, “No thank you, I appreciate you taking the time to offer this opportunity to me, but it just does not fit our business model. Thank you for your time.” Then politely slide their paperwork back toward them and end the meeting with a handshake and a smile.
To read the entire conversation related to Rachel’s story CLICK HERE