PPC Blog

Are you thinking of starting a web business? Starting a PPC Management agency? Setting up your own site and selling things, or building a web publishing empire?

Before you start, ask yourself the following eight questions. The advantage of this Q&A is that you can quickly see if the idea you’re going to throw your money and soul into is likely to work.

1 . What Do You Do?

Define what service the business provides. Many entrepreneurs make the mistake of trying to be all things to all people. They may well have a wide range of skills, but resources spread too thinly often leads to failure.

Try to focus.

McDonalds could, no doubt, provide up-market meals, but they focus on selling quick, cheap food.

That is what they do.

2. Who Do You Do It For?

Who are your customers?

Create a mental image of your typical customer. Make a note of their income levels, and particularly their “itch” i.e. that problem they really need solving, and will gladly pay money for you to solve.

3. What Makes You Different?

What is your unique selling proposition?

If your customers can buy the same services for less elsewhere, or more easily, they will. Your customers will compare you against others. What is that one thing you can do, that offers considerable value, that no-one else can do? What makes you special? What makes you remarkable?

There is a tendency to model yourself on others. To copy existing models. Try to avoid doing so. The people who come up with these models are probably already onto the next stage i.e. refining their service, changing direction, heading somewhere else. You’ll always be the person in their rear-view mirror, one step behind. Why be Bing when you can be Google? 🙂

This is not to say doing something wildly new or different is any guarantee of success. One winning strategy is to take a successful business model, and twist it a little. You have the ready-acceptance of a proven model (safe), and the opportunity to talk about something a little new (interesting). For example, Steve Jobs did not invent the PDA, but he put a new twist on it in the form of the iPhone. He took something that most people were already familiar with (safe) and made it more approachable (interesting).

4. Do You Know What Cashflow Is?

This point is so important, it really should be number one. Cashflow is the movement of cash into or out of a business. It sounds like the dullest thing in the world, and many budding entrepreneurs overlook it, but it is the one thing most likely to kill your business.

Businesses may have great ideas. They have customers signed up. They execute well. They’ve even sent the bills out. Growth is happening, and all is well with the world.

Then the bank manager calls.

The overdraft has hit its limit and you can’t meet payroll this week. You can’t make rent. At this point, you’ve out of runway.

Running out of cash stops you dead and makes you utterly vulnerable. Address cashflow from the start. How much capital will you need? How much overdraft will you need? How long will it be before client money appears – cleared – into your bank account? How much do you need to operate each week?

There is no fooling cashflow. The score of any business is the bank account balance.

5. What Employees Do You Need?

Will you be doing all the work yourself? If you’re doing the work yourself, when will you have time to sell new work? Should you be wasting time doing menial clerical tasks?

Consider outsourcing all non-core tasks. Whilst you may be able to do everything, often it doesn’t make sense to do anything other than the things that bring you the most money.

6. How Will You Manage Customers?

Keeping existing customers is a lot cheaper than finding new ones. How will you manage your customer relationships? How will you structure your activities to ensure repeat business? Do you have a process whereby you can find out customers wants and needs?

Create a process that allows you to adapt to your customers.

7. What Are Your Goals?

Set company goals. Set personal goals. How much do you need to earn, and in what time frame? How will you exit your business? Who will you sell to?

Use the SMART system when setting goals. Using the smart system, goals must be:

S = Specific
M = Measurable
A = Attainable
R = Realistic
T = Timely

For example, a goal might be “to gain 20 new customers in one year”. The specific, measurable nature of the goal means your planning will be more effective. Specific goals beg questions i.e. “Where will I find 20 new customers”? and lead to specific actions.

Failure to be specific results in vague goals such as “to operate a successful business” or “to be happy”. It’s difficult to decide on actions that will lead to such goals.

8. Do You Really Want To Run Your Own Business?

Having gone through these questions, you’re may be a) raring to go or b) feeling a little overwhelmed.

Ask yourself why you want to be in business for yourself? It’s more work than being a staffer, there is more risk involved, the money is non-existent to start with, you swap one boss for many bosses, and each new contract becomes a job interview.

On the plus side, it is enormously satisfying, you are responsible for your own destiny, and all benefits return to you.

Taking one hour to consider these questions can save you a lot of time, money and grief if you jump in unprepared.

Jump in. With due consideration 🙂

Those who have made it through your first year of business, what things do you wished you’d considered before you took the plunge?

Whether we work for ourselves, or we work as part of a bigger business, we should always be accountable for what we do. Clients, bosses, and bank managers will always want to see us demonstrate that we are working steadily towards achieving goals.

Project management has become a specialized task in it’s own right. Dedicated project managers delegate tasks, ensure people complete those tasks, and generally keep projects on track. However, project management should permeate all we do. We’re all project managers, especially those of us involved in long and complex tasks, like PPC campaigns.

The principles of project management are simple. A complex task is broken down into a series of manageable, measureable steps leading to a desired outcome, achieved in an acceptable timeframe. If we manage ourselves – or others – well, we free up time, and save ourselves a lot of grief.

Here’s how to manage a PPC project:

Define The Outcome

Whether you’re dealing with a client, or undertaking your own project, you have to know exactly what you’re aiming to achieve.

Write the objective down down, as clearly and succinctly as possible. If a client is vague about outcomes, it’s best to push them to get clarity at this point. Once a project is underway, it becomes difficult – and time consuming – to change course.

Define The Process That Delivers The Outcome

Once you have an outcome – a destination – defined, you should now plot a high-level course showing how you’ll get there. If the project is short i.e. a day or two, then your don’t really need to define a process. However, if the project takes a while – and most PPC campaigns do – then a process becomes important, because the client will want to see you demonstrate that progress is being made.

The benefits of having a clearly-defined process is that it shows the client what is involved, and when things are likely to happen. It reassures the client that things will happen in an orderly, accountable fashion i.e. there is less chance of being surprised, and that the client is in control of the process.

For example, a PPC process might look like this:

• Establish and define objectives
• Create written reporting plan, setting out milestones. Client to approve reporting plan and milestones.
• Report on each milestone. Client to review and provide feedback at each stage.
• Deliver final milestone. Provide final project report.
• Sign off

Break The Project Down Into Steps

Climbing a mountain begins with a single step. And then another. And then another. Eventually, we’ve scaled the mountain.

Likewise, a project is made less intimidating if broken down into a series of small steps. The client doesn’t need to know each technical step. However, the steps lead to each milestone.

The benefits are two-fold. One, a complex task becomes a lot more manageable. Two, reporting is built into the process. Clients almost always appreciate progress reports, which also provides you with an opportunity to seek valuable feedback and clarification.

Say What You’ll Do, Do It, And Tell Them You’ve Done It

If you do what you say you’ll do, even if it’s a small thing, you will build trust.

Sometimes, it’s easy to think that because you know what you’re doing, that the client will automatically perceive it. This isn’t necessarily so. Demonstrating competence, at regular intervals, is often required in order to build trust.

Integrate Feedback

No matter how well we plan at the early stages, there will always be tweaks and adjustments that need to be made.

By integrating multiple opportunities for feedback, we can also alter and add steps we may have missed, or didn’t define clearly enough.

Focus On The Next Step

After the first step, comes the next step, and so on. At each stage, we keep the client informed, integrating feedback, redefining and adding tasks as necessary. Each stage leads us closer to our goal, and everyone is clear about what needs to be done, and what the outcome will be.

Repeat

Repeat the steps/reporting/integrating process until the desired outcome is achieved.

Tips:

Consider making the first milestones easy-wins, especially if the client is new. This helps create trust, which may be needed if other milestones become difficult.

Make a note of which tasks require other people, and get buy-in from them as soon as is practicable. In many ways, other workers are like clients in that they benefit from feeling they have an element of control.

The more complex a project – especially projects that require multiple people to hit time targets before others can start – the more useful project management software becomes, however a lot of project management software is simply overkill for PPC.

No surprises – for anyone 🙂

Should you hire an external PPC consultant? Or can you do the job better and/or cheaper inhouse?

Large companies – companies with over 1,000 people – typically have less need to outsource than smaller companies. Existing in-house teams can often adapt in order to provide extra services, with a little extra training required. Smaller companies typically benefit the most from outsourcing, as the overheads for each added employee can be considerable. However, the decision whether to outsource really comes down to a cost benefit analysis, regardless of size.

Which option would suit your company best? Let’s take a look at the issues.

PPC Outsourcing:

Consider the following:

Data security – PPC data is valuable. If your business is driven by marketing, particularly internet marketing, then how comfortable are you with this data being in the hands of a third-party?

Control – If the internet marketing function brings in a significant chunk of your business, then your choice of partner is critical. For some, the risk cost will simply be too high.

Incentives – ensure that the performance incentives are appropriate. For example, some PPC agencies bill a percentage of spend. The problem with this model is that it encourages high bidding for clicks, which are only ever likely to increase. The incetives should align with your business case. Be sure to implement a means of tracking PPC traffic to measurable business goals.

Low Spend – small campaigns are relatively straightforward to manage in house if you have existing marketing resource i.e. spending in the thousands per month. The function is typically a part time role, and the time cost can be minimized further by using third-party semi-automated campaign management software and tools.

A PPC agency starts to make sense when the monthy spend is in the tens of thousands and higher, as such campaigns can quickly become complex and/or can be regularly optimized to drive down total campaign cost. We’re talking about good PPC agencies, of course. There are plenty of lousy ones. Which brings us onto…

Management Overhead – third party suppliers need to be managed. They need to have objectives set. They need to report on a regular basis. Performance needs to be monitored. This is also true of inhouse PPC management, of course, however the proximity of an inhouse employee, and the fact they’re engrained in the culture and process, often makes this function easier.

Business Knowledge – any marketing function needs to be closely aligned with business goals. Tyically, PPC managers work on multiple accounts and have a tendancy to focus on numbers, as opposed to wider company objectives. This remoteness can make external consultants less effective than someone who lives and breathes your business and culture each day.

PPC Inhouse

Expertise – PPC management is specialized and ever changing. This requires on-going training and adaptable employees who can wear hats of both marketing and technical expertise simultaneously. PPC agencies are specifically geared for this task.

Lack Of Resource – PPC takes time, and your existing employess may not have it. PPC invariably grows more and more complex, especially if the return on investment grows. Whilst it’s easy to manage basic campaigns – low budget/low numbers of keyword terms – it can become time consuming to manage large campaigns. PPC agencies use economies of scale and specialized tools that may not be readily available elsewhere.

Poor Results – If you’re new to PPC, then you may not have adequate benchmarks to quantify performance. An external agency may have years of experience in your market sector, and be able to provide a wealth of market data.

High Costs – not only is there the cost of hiring extra staff, there is the opportunity cost of having that staff not focus on something else. Obviously each businesses cost structure is unique, but generally the bigger the PPC spend, the more value you’ll get from outsourcing to a good agency.

Summary

Consider inhouse PPC if:

• You require high levels marketing/business integration.
• The function can readily be absorbed using available staff and management resources
• The level of complexity is manageable. Typically, campaigns in the tens of thousands per month featuring thousands of keywords are best managed by a dedicated specialist.

Consider Outsourcing PPC if:

• You have a high level of spend i.e. in the tens of thousands per month and above
• You don’t have readily available resources
• The PPC function is not a mission critical part of your marketing mix.

In a market downturn, there is always pressure to cut your prices. Trouble is, the same pressure applies in an up market, too!

Can you ever win? Either the client won’t pay what you’re worth because of tight budget constraints, or so many competitors enter a flush market that there isn’t enough money to go around.

Here are some ideas on how to achieve premium pricing for your PPC services.

1. Focus On Sales

As we discussed in a previous post, What Is The Key Skill Of The PPC Consultant, apart from search marketing expertise sales is the most important skills an independent PPC consultant can possess. Without sales, nothing else can happen.

How do you generate sales leads? How many leads do you have right now?

If you have few leads, then you need to put a lot more effort into sales, and think about increasing the channels by which you market i.e. PPC, conferences, cold-calling, agency partnerships etc.

You should always strive to generate far more leads than you ever use. This way, you’ll have your choice of clients, and won’t feel under pressure to cut your prices. Of course, this is easier said than done, but the important thing to think about is how much effort and resources you currently devote to the sales side of your business.

If you’re a sole operator, you may not have much time to devote to sales. One way around this problem is to partner with marketing and advertising agencies. Small agencies may not have enough work to be able to hire a dedicated search marketing specialist, but would certainly like to offer such services. If you sign up three of four such agencies, they’ll do much of the selling for you – typically to their existing customer base – and take a commission on your work. This commission usually works out to be way cheaper than hiring dedicated sales staff yourself.

2. Make Your Client Money

If I said to you “For every dollar you spend on my services, you’ll make three“, would you hire me? How about if I said “For every dollar you spend on my services, you’ll save three” would you hire me?

Of course.

ROI – return on investment – is a very powerful sales tool. In your proposal and pitch, demonstrate exactly how you will provide ROI. For example, you might approach businesses who market only on radio and demonstrate how PPC can generate more leads/visitors/responses for the same spend.

No business will turn down a positive ROI proposition, no matter what the state of the economic climate. The economic climate is actually in your favour at the moment – money is moving out of traditional media channels, such as television, newspapers and radio, and onto the web. This is soely due to the positive ROI proposition offering by internet marketing.

3. Carve Your Own Niche

Are there too many generalist PPC consultants?

How about owning a niche, such as travel, construction, clothing, retailing etc?

Look for businesses in niches that predominately use traditional marketing channels to advertise their goods and services and construct proposals that compare the ROI of PPC vs these traditional marketing channels.

The niche needs to be big enough for you to make money, but small enough to have escaped the attention of bigger marketing agencies. Big agencies with high overheads often avoid small niches because they are too small for them to service and still make a profit. Such niches provide rich pickings for the independent consultant who typically has lower overheads and can adapt quickly.

4. Become “The” Guru Of Your Niche

People like dealing with people they perceive as being notable experts. If you’re already known to your potential clients, or can point to independent validation of your guru status, then you have a massive advantage over unknown consultants.

This is also a reason why focusing on a niche can be such a great strategy for the independent PPC consultant. The world is awash with PPC gurus who have been plying their trade for a long time, speaking at conferences, writing articles for major publications etc. Instead of competing with them directly, choose a niche and become a superstar in that niche. There will be many trade publications that have NEVER had a PPC consultant write an article for them.

Why don’t you become the first?

5. Provide More Value Than The Next Guy

Always be on the lookout for areas where you can add more value than what the client pays you to provide.

For example, say you have an interest in usability. You note that the client has a few usability problems that could be easily solved. Write up a detailed report and give it to the client as a bonus. View the time spent on this report as a marketing cost i.e. you’re trying to forge a deeper relationship that will lead to ongoing business.

Clients will never fail to be impressed by value-added services.

Under promise and over deliver.

If you’re great at PPC, then why would you sell those skills to others? Why wouldn’t you become an affiliate marketer, or set up your own site selling goods and services? What’s the point of working for a string of new bosses as an independent PPC consultant?

There are a few reasons why becoming an independent consultant can be a great idea. Lucrative, too.

1. You Get To See Deep Inside Other Businesses

Market research – good market research – can cost a fortune, but the consultant gains an intimate knowledge of their clients market. Not only do you get to see the data, you get to see the marketing and business processes that you can then apply elsewhere. Not so much spying as a valuable apprenticeship and research opportunity, for which you get paid.

2. Flexibility

The independent consultant gets to choose their own hours and projects. Unlike an employee, the independent consultant can choose their “bosses”. Don’t like the boss? “Fire” the client.

You can also choose your hours of work, when to take holidays, and where you work.

3. Focus On Core Skills

Crafting solutions can be a lot more fun than implementing them. Delivering goods or services can be a hassle, and require a lot of back-end processes.

PPC is mostly a high level marketing function, and the responsibility typically ends once the visitor moves to desired action.

The Big Problem With Consultancy

The world is chock full of PPC consultants!

Anyone can call themselves a consultant, so many people do. Assuming the consultant can do the work to a high standard, the most critical skill of the independent consultant – entering a saturated market with no barrier to entry – is the ability to sell.

How do you sell your services?

1. Identify Your Client

Do you want to work with big organisations or small? The approach you take will differ depending on your target market.

Small businesses tend to like dealing with other small businesses, as they appreciate the direct level of contact. Big business have larger budgets, but can be harder for the new consultant to engage – many large firms will work with preferred suppliers, and with established agencies.

Tailor your pitch and approach accordingly.

2. Craft A Point Of Difference

Why would they choose you? You may be great at what you do, but how do you convince others of your worth?

Points of difference can include:

• Geographic locality i.e. you can go and see clients in person.
• Industry vertical i.e. specialize in one particular industry
• Experience – have you got unique experience that you can highlight? Have you worked with people/clients of note?
• Awareness – if people have seen you name before, you stand a better chance of landing deals. This is why consultants speak at conferences, write blogs, write op-ed pieces for newspapers and other publications.

3. Demonstrate And Offer More Value Than Your Competitors

What are your competitors doing? More importantly, what are they not doing? Are there areas you can provide more value to clients than your competitors do?

Think about the points of resistance for a client. Put yourself in their shoes. One major point of resistance for the new independent consultant is perceived risk. Without a track record, the risk proposition for the client is high.

One idea for getting around this perceived risk is to give your services away for free.

Huh?

One local consulting agency I know of sold out to a competitor for a a tidy sum. When they started, they decided they needed a client list, so they offered their services, for nothing, to a list of preferred clients. The agency viewed this as a marketing cost. Once they had proved their worth, clients tended to stay on their books, and at very least, provided valuable experience and referrals.

Of course, you can’t work for nothing/discount rates over the long term, but such a strategy works well if you need to get a few good names – preferably industry leader names as opposed to unknown small businesses – under your belt.

4. Say What You’ll Do, Do It, Then Tell Them You’ve Done It

Actors often say you’re only as good as your last movie. In consulting, you’re only as good as your last gig. A bad reputation can be gained easily, and persist for a long time. So when you execute, stay focused on delivery.

The most effective selling method, by far, is good word of mouth. Each new gig gives you a chance to increase good word of mouth.

I hope this article provides you with a few ideas on selling your services.

The techniques you use very much depend on your own skills, history and ability. If you’re new to PPC, in terms of operating as a business, it’s often a good idea to work for a PPC agency before going freelance. This gives you valuable insight into the business of selling search, experience, and the opportunity to build up contacts.

Look at any competitive PPC area today, and you’ll notice many of the ads are selling the same thing.

This is a fundamental problem.

No matter how great you are at PPC, it the product or service you’re selling is flooded with competition, the more your margins will be squeezed. The more your margins are squeezed, the less you will be able to spend on advertising.

Long-term, that isn’t a recipe for success. Those with the deepest pockets will eventually win.

The Need To Differentiate

Theodore Levitt, an American economist and professor at Harvard Business School, said “There is no such thing as a commodity. All goods and services are differentiable”

If you’re pitching very similar products to those offered by other advertisers, you need to find valid points of difference that encourage visitors to choose your product.

If you have control over the product/service you’re selling, you have a number of options available to you. You could differentiate based on an emerging consumer trend. For example, some people are concerned about the origin of food. If you were selling coffee, you could draw attention to the source of the coffee as a valid point of difference. You could use fresh imagery to breath life into an old product, like celebrity endorsement. You could reduce price.

Simple stuff, conceptually.

If you don’t have control over the product, your options are more limited, but you can still differentiate. You could offer a different level of service. You could bundle the product with something else. You could leverage your existing reputation in another area.

The problem is that even if you’re successful with your differentiation, people will soon copy you.

What do you do?

Three Choices

At the point where copyists move in – and this happens fast on the internet – the vendor faces three options:

• Lower the price and accept lower profits
• Maintain the price, but lose market share, and ultimately profits
• Find a *new* point of differentiation and maintain price

Option three is going to be most preferable.

The Need To “Innovate”

You can see this at work on the likes of Clickbank.

Clickbank facilitates the selling of the same old get-rich-quick schemes that have been around for years. But “new” products keep selling, and the way vendors do that is by using new imagery, descriptions and context, and leveraging off older product lines. The price – typically $97 – has been maintained for years. The big selling vendors are often the same old faces who have been selling via that channel since it began.

The lesson here is this:

In order to maintain long term profitability, you cannot rely on your current advantage being maintained over time. Copyists will errode it.

Instead, always be in search of your *next* advantage. You can achieve this by constantly adding value, and/or new valid points of differentiation.

Keep in mind the value of “the new”. Or more precisely, the perception of the new.

There are many examples offline. Car companies introduce new models. These models are pretty much the same as the last model, but if they package them up a little differently, they have a new point of differentiation, and a new story to tell.

Soft-drink companies, like Coca Cola, leverage off their existing brand reputation to introduce new lines. Again, these new lines are bubbly sugary drinks, and aren’t really radically new or different.

The fashion industry changes every season. Microsoft introduce yearly – well, almost – versions of Office, even though a word processor hasn’t really changed much since the 80’s.

Notice a pattern?

Consumers love the new.

Notice another?

This stuff isn’t really new at all!

It’s just perceived as being new.

Being new is an easy point of differentiation to implement and thus maintain strategic advantage, so long as you have a plan to always introduce the new. When we consider that the new isn’t really new at all, and comes down mostly to cosmetic or subtle changes, it becomes even easier.

Do you have a plan to introduce the new as a point of ongoing differentiation? This might be something to consider if your competition is offering all offering the same thing, and stuck in a rut.

Take you product or service and give it a new twist. And have a long term plan to do so regularly 🙂