How to Explain the Value of search engine marketing to Executives — Whiteboard Friday

In at the moment’s episode of Whiteboard Friday, Seer Interactive’s Larry Waddell discusses how one can translate the search engine marketing work you do in your purchasers into how executives consider worth — particularly, enterprise worth.

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Video Transcription

Good day, Moz neighborhood, and welcome to a different version of Whiteboard Friday. I am Larry Waddell, EVP of Enterprise Technique for Seer Interactive, and at the moment I wish to speak to you about tips on how to translate the good work you do in your purchasers into how they consider worth, particularly enterprise worth.

So let’s leap proper in. Now to do it, I will overview two frameworks or two methods of pondering. One is the worth pyramid. That is the place we’ll begin. However then we’ll transfer from there to the 4 types of enterprise worth, and I am going to stroll you thru that.

So beginning with the worth pyramid, and that is one thing I’ve used at Seer for years, and I’ve had the good privilege of main the Analytics staff at one cut-off date, the search engine marketing staff, thanks Wil, and the Paid Media staff, thanks, Crystal, and thru all of that, I’ve used a quite simple assemble. As you possibly can see, there’s nothing terribly fancy right here, however it’s a manner to assist our groups perceive the work that they do and to know the work the purchasers are asking us to do.

So to start out, it is a pyramid like every other, 4 completely different layers, and for search engine marketing you possibly can take into consideration the underside layer as one thing like hyperlink constructing. It is one thing crucial to do, extraordinarily necessary, however maybe on the backside of the pyramid. Hyperlink constructing we get rankings. With rankings, we get visitors.

Site visitors will get us engagement on the web site. However we do not cease there after all. Engagement on the web site and visitors, now we wish to deal with conversions. Now we get these conversions and relying on what our conversion worth is, that will get us to income. So actually nothing earth-shattering there. However I wish to introduce a pair different ideas. So that you may wish to take into consideration titles at your purchasers.

So for those who’re down right here, maybe on the backside of the worth pyramid, possibly it is hyperlink constructing, possibly it is different low-level however crucial duties, you is likely to be coping with any person who’s a specialist or a supervisor at your consumer day after day. As you progress up this pyramid, the place you are speaking about issues like income and you’ve got been in these conferences, you’ve got had these individuals be a part of your QBRs or they pop right into a weekly name or a month-to-month name, they usually have titles like director or VP or CMO.

Each on occasion, you may get a director of finance or a CFO in these conferences. You may additionally have seen that these conferences are usually extra strategic. They are usually specializing in issues aside from the nitty-gritty tactical that you just is likely to be grinding out day after day together with your supervisor on the consumer.

These of us are fearful about enterprise issues. They’re fearful about issues which can be impacting the trajectory of the general enterprise, of which search engine marketing performs an important half. Down right here, maybe much less visibility into these issues on the consumer, however down right here we’re centered extra on search engine marketing issues, rankings, how a lot visitors are we getting, what are our conversions, content material on the positioning, load speeds, and people kinds of issues.

It is not that these of us do not care about that. They’re simply maybe faraway from it, they usually do not essentially perceive how any of these things down right here impacts the stuff that they care about except now we have a whole lot of rationalization and we have all been there. So what will we do with one thing like this? Nicely, we will begin to consider a speculation round worth.

What if there’s larger perceived worth on the a part of these of us on the consumer, the upper up this pyramid you occur to be? So down right here, once more, necessary however maybe much less perceived worth than strategic conversations that relate to enterprise issues at your consumer. So what are the issues to fret about down right here?

There’s really quite a bit to fret about down right here. So in my expertise, you probably have engagements that are likely to focus totally on speaking about, reporting on, and reviewing exercise on the backside of the worth pyramid, you may get locked into simply doing that in your consumer.

The best way I like to consider it’s that is the massive children desk or the adults desk maybe. How will we get a seat at that desk? Once more, in my expertise, if these of us do not see a approach to translate what you do into what they care about, you form of get relegated down right here.

Once more, there’s nothing fallacious with it. However the issue is, if we have a look at payment competitors, it tends to be the case that there is larger payment competitors down right here than there’s up right here. There tends to be extra rivals down right here. There’s much less differentiation between suppliers down right here. You are extra prone to being ChatGPTed, for instance.

You are extra prone to getting large information out or automated out. You have seen some nibbling across the edges round issues that you just may characterize as tactical. Increasingly of it’s turning into automated or ok automation. Possibly it is not good, however it’s ok. Then I can avoid wasting cash as a result of down right here there’s excessive payment competitors.

You possibly can see the robotic there coming to get us. So the factor that we have to do is consider how we transfer up this pyramid, each within the work that we do and the way we speak in regards to the work that we do with purchasers. So, once more, that is transferring up the worth pyramid and tying extra of our work to the enterprise issues that these of us, VPs, CMOs, administrators, CFOs care about.

One other manner to consider this too is profession development. So for those who begin off in search engine marketing, you may begin down right here. You may begin doing content material audits, and also you may begin doing hyperlink constructing and issues like that. Once more, crucial issues to do. However then over time, this additionally creates a path so that you can kind of take into consideration the place you possibly can go as you begin to unpack a little bit bit extra of how progressively extra refined work you may be doing for purchasers interprets to worth for these individuals, as a result of it seems these individuals management the finances.

So you may additionally have found that when it is time for renewals or pitching work, that oftentimes there is a large boss and that large boss sits up right here, sometimes not down there. In order that will get us to worth. Now, after we take into consideration conversions and we’re enthusiastic about income generated from our work on a consumer web site, we are likely to deal with the income of that, and income is extraordinarily necessary.

We won’t get wherever if we’re not producing income or extra income for our purchasers. So income for the win. You possibly can see it proper there. Nicely, sure and no, and that will get us to the 4 kinds of enterprise worth. So there are no less than 4.

There is a fifth that I am going to contact on briefly in a second. However for probably the most half we will enhance income, however ah, not so quick, gross revenue. We are able to scale back price. We are able to do one thing which is known as price avoidance. We will help our purchasers keep away from price. Then there’s insurance coverage worth.

In my time at Seer, I’ve discovered us in initiatives that do a number of of this stuff, oftentimes with out our staff even realizing that they are creating this extra worth. Now down right here there’s a little bit little bit of an economics lesson, and that is known as a utility curve.

I am going to get to why that is necessary in a second, and it will assist me clarify why a few of these issues over right here create worth, how that really occurs. However let’s return to rising income, gross revenue. So questions you possibly can take into consideration for those who’re centered right here. Are you producing extra income in your consumer, or are you stopping at income?

I recommend we take a pause to essentially think about that. We have had conditions the place we is likely to be producing extra income for the consumer, however it seems that the unit economics are such that on the gross revenue stage, the consumer is likely to be shedding cash on every little thing we assist the consumer promote. So despite the fact that every little thing over right here has been geared in direction of up and to the appropriate, higher rankings, extra visitors, larger engagement, extra conversions, extra income, all for naught if the factor we’re promoting has loopy delivery prices and the delivery prices are turning out to be a loser for the consumer.

This particular person may not concentrate on that, however these individuals may. So that you form of see how understanding a little bit bit extra of what occurs at this stage will help you place what you are doing right here in larger context. So once I discuss gross revenue, gross revenue is mainly income minus price of products bought or COGS typically talking.

That is gross revenue. The factor to remember is that gross revenue pays the lease, not income. You continue to must pay for the price of the factor that your consumer produces, and what’s left over is what really covers different bills. We do not typically assume that manner after we’re doing search engine marketing initiatives, and we’re strictly centered on income.

Would possibly wish to take into consideration gross revenue or asking these sorts of questions, which is a sign. In order that’s the opposite factor about this. We do not have to develop into specialists essentially in our purchasers’ companies, however possibly asking higher questions as soon as we’re within the conferences up speaking about these things with these those that indicators, “Hey, I do know your enterprise. I perceive that there is extra happening than simply the search engine marketing.”

Subsequent is decreasing price. So decreasing price will increase worth, and that is the place this is available in. It is a quite simple idea and well-proven that the achieve that one may get from a little bit bit extra of one thing would not really feel pretty much as good as shedding a bunch actually stinks.

In order that’s known as loss aversion. So it really works in such a manner that including a little bit bit extra revenue makes the consumer higher off. Shedding revenue can damage quite a bit. It is a idea that is going to be useful and let me kind of step you thru it in additional element.

So for those who scale back price and we make suggestions to our purchasers on a regular basis. We do not at all times notice that these purchasers essentially are saving more cash from what we do. It is a helpful factor, however all of our charts over right here must go up and to the appropriate. We do not essentially report on how a lot cash I saved you.

We are likely to report on how a lot income I generated. However there are typically conversations and proposals that we will have with the purchasers that may very well be both new instruments they will procure, or possibly there are issues that we may be doing for a consumer, like content material creation, that we will do at a decrease price than the consumer can do at one other company and even with an inner staff.

So I gave a fast instance right here. So think about you’ve a consumer that occurs to be valued at 10 instances their web revenue to illustrate. If we save that consumer $1,000, that is likely to be, “Oh, nice.” One little factor I threw into an replace on the finish of the month as I am speaking in regards to the income I am producing, however the CFO will instantly acknowledge, “Oh, I am valued at 10x. They only elevated the worth of my enterprise by $10,000.”

That may not be one thing that ever enters into the dialog if we’re simply enthusiastic about the search engine marketing work that we do, however we simply created a whole lot of worth for any person. The opposite one is price avoidance. It is a difficult one. However this mainly means what are the suggestions we will make for a consumer that may permit them to not spend cash on one thing sooner or later.

Fast instance, a while in the past we had a consumer that was confronted with a selection. They had been operating a m-Dot web site and their dot-com for desktop, they usually maintained them each. But it surely got here time to improve their CMS, they usually had two choices. One, they might improve each programs and proceed to take care of a separate cell and desktop expertise.

But when they did that, they must rent extra builders and one other company to take care of each websites. The opposite choice was to have a totally fluid web site, a dynamic web site that allowed them to keep away from all that price. We helped them perceive which is likely to be higher for his or her search engine marketing, however utilizing this framework, additionally which is likely to be higher from an expense standpoint.

They selected to do choice quantity two. They averted all that additional expense, and that was price avoidance. The rationale why that is difficult is as a result of it is arduous to show the counterfactual. We do not know what they actually would have spent had they achieved each websites, however we all know what they budgeted and we stated, “Hey, by following this different advice, you averted having to pay this.”

That is really finances financial savings. Funds financial savings means, again to our utility curve, that their revenue went up, made them higher off, probably additionally allowed them to extend the worth of their enterprise. Lastly, there’s insurance coverage, and that is one that isn’t terribly intuitive till you concentrate on it.

So think about you’ve a consumer that’s considering a web site relaunch. They’ve an inner search engine marketing staff, they usually’re very assured of their talents, however they may not have a whole lot of expertise or possibly not as a lot expertise as you in a migration or the positioning relaunch. So your consumer may interact you to have a short-term venture to assist increase the capabilities of their inner staff, possibly verify on issues, possibly be there the night time of the conversion, and people kinds of issues.

Now it is a further expense. So this particular person right here may say, “Oh, I do not know if I can get one other company by means of procurement as a result of we have already got an inner staff serving to us on our migration.” However the CFO may say, “Oh no, that is insurance coverage. I’ll gladly pay an insurance coverage premium to keep away from an enormous loss if this web site is producing a whole lot of income or gross revenue for me,” as a result of they try this on a regular basis. If you concentrate on all of the insurance coverage {that a} enterprise may spend cash on, explaining that search engine marketing venture or that technical search engine marketing assist venture within the context of insurance coverage may make a ton of sense to them for those who’ve been invited to that desk and you’ll clarify what you do inside that context.

So right here, I will not get into the small print, however what I’ll present you is that you’ll gladly pay this little little bit of premium, in different phrases, your contract to assist their inner staff. The consumer may gladly pay that to keep away from the potential for a big loss. So that you simply must persuade the consumer that your presence will really stop that loss.

That is insurance coverage and that is worth in your consumer. In order that’s about it. To recap, take into consideration the work that you just do and tips on how to translate that into the enterprise challenges that these of us are grappling with. So they may simply pop into your QBR or pop into your month-to-month assembly. They may not perceive Penguin and BERT and ChatGPT or any of that stuff, however they do perceive what is going on to make me more cash, gross revenue, what is going on to avoid wasting me cash, what is going on to assist me keep away from some nasty prices I’d actually slightly not pay, and what is going on to insure me.

How are you going to observe my again and forestall some bigger loss later? So mainly again to the place I began, how do you translate your search engine marketing experience into the language of your consumer executives? Thanks very a lot.

Study extra about creating worth for purchasers here. 

Video transcription by Speechpad.com