There are five main criteria you will need to have accomplished before you should begin doing PPC advertising.  If you do not have most of these criteria met it becomes much more risky for you to do online marketing and you may want to consider not engaging in it at all (or any form of online advertising for that matter).  There are, obviously, exceptions for any rule but these will serve as very useful guidelines for you so let’s get started with the five criteria. 

1. Website: Do you have a clean & clear “responsive” website?
2. Budget: Do you have a budget to support PPC advertising?
3. Localization: Do you have a business that is located in a specific city or region?
4. Service: Do you offer a service versus a product?
5. Lifetime Value: Do your customers bring you a lot of value?

If you have these criteria met, you can be rest assured that you are a prime candidate for online marketing and you should setup Google AdWords and Bing account to drive more traffic to your website to generate more customers.  The first two are factors you can change within your business.  You can always change your website or give more budget for advertising, however, the last three criteria have to do with the business itself and thus cannot be changed unless you decide to ‘pivot’ your business. I will go through, in detail, what I specifically mean with each of these five criteria and how it can help you maximize your PPC efforts.

1. Website: Do you have a clean & clear “responsive” website?

When you do PPC advertising you drive traffic to your website.  Needless to say, you will want your website looking as good as possible so when users click on your ad they go to a website that keeps them engaged and makes it easy for them to convert into clients.  For this, you will want a clean elegantly laid-out website that engages users with a very clear call-to-action.  When I say ‘clean’ I mean a website that is easy on the eye and don’t get users to want to immediately hit the back button.  ‘Clear’ refers to a clear call to action so that the client knows what he or she is expected to do on your website.  You will probably want your phone number in the upper-right hand corner or at least a “Contact” page on the right-hand side of your navigation bar.  You might also want a contact form on-page to make it very clear that is the primary goal you want the client to accomplish. 

Look at the examples below:

Example #1:

Example #2:

If you look at the example above you will see that in the upper right-hand corner there is a very clear “Contact Us Now” Call-to-Action.  If you click on that orange button (which is a contrasting color to the blue themed websites) you will be taken to their Contact Page.  Further, right below the Contact Us Now (which gives the client a very clear idea of what they should do) is a phone number you can click on and will automatically call the company.  Even if they do not click on the phone number they can clearly see it and can call in using their cell phone.  Lastly, there is a contact form right underneath the banner that gives clients the opportunity to quickly fill out the form and be contacted within 24 hours.  Again the call-to-action is very specific “Call Us (415 529-5637) or simply fill out this…”

Further both sites are mobile “responsive” meaning that they change dimensions based on the screen they are viewed on.  Look below for examples:

These sites show up well on mobile devices and still gives clients a clear Call to Action!  You will want your website to be mobile responsive because users are moving more and more towards mobile devices.  Soon there will be more people surfing the web on mobile phones than computers and you don’t want to be left behind.  Further, Google recently released an update that penalizes websites that aren’t mobile responsive so you want to address this issue as soon as possible so your Organic Search Result Rankings don’t drop.  Once you have a website that is Clean, Clear, and Responsive you can begin looking at the other factors that are necessary for PPC advertising.

1. Budget: Do you have a budget to support PPC advertising?

This should be obvious but PPC advertising (just like all advertising) requires money.  It is called “pay per click” advertising because you pay every time someone clicks on your ad.  Unlike normal forms of advertising, however, where you have to pay upfront for your ad to show like newspaper, television, or radio pay per click lets you control your budget to a much higher degree.  You can basically choose whatever budget suites you. 

Other forms of advertising you pay upfront and you really don’t have any idea how many customers you will get and there is very little way to track performance.  Pay per click is nearly 100% trackable so you can find what works and what doesn’t and fine-tune your ads until you have a highly optimized advertising platform.  Again you don’t pay any upfront fees, you only pay when a user clicks on your ad and goes to your website which lets you choose the exact budget that fits for your business.  Despite the much better platform that lets you control your budget and lets your track your results PPC advertising is a platform with a steep learning curve.  Because of this it is recommended you hire a PPC company to setup your advertising so you don’t just waste your budget on irrelevant clicks and clients who won’t convert.  If you do indeed have the budget to spend on advertising you will want to see the next three criteria to see if your business with thrive with online advertising.

Like I mentioned earlier, these first two criteria (Website & Budget) can change without changing your business structure.  All you need is to optimize your website and increase your advertising budget.  In the following blog, I will go over the next three criteria that are related to the business itself and thus are much more set in stone unless you decide to alter your business internally.

In the last blog, I gave an introduction to the top five criteria you should look for to decide if PPC advertising is right for you.  I went over the first two criteria (Website & Budget) which can easily be changed based off your decision to optimize your website or allocate more budget to your advertising.  The next three criteria, however, are internal and related to your business as a whole and thus aren’t easily changed without altering your business itself.  These criteria are only guidelines, but you may want to think twice about doing PPC online advertising, or maybe even changing your business structure itself if you do not have these next three criteria met.

• Localization: Do you have a business that’s located in a specific city or region(s)?

This isn’t exactly obvious but if you have a business that serves all of America or can serve the entire world it would seem like an advantage because you have more possible customers, but the opposite is true.  Like the saying goes, “If everyone is your customer no one is your customer”.  If you service or provide products to all of America you have A LOT of competition.  This higher competition means you’ll be paying more per click when you advertise for your company.  Further, many of these companies you compete against will have outrageous budgets and would love to take you out of the business by driving up advertising costs for you.  I’ve seen this happen before where competition would spend so much money on ads, that they themselves are losing money, just to put their competition out of business.  You do NOT want to play in this kind of game without some serious thought. 

If, however, you are local, like a dentist in a city, there isn’t a company out there that can service the entire nation because you are bound by your immediate location that your office is located in.  No one is going to drive across states to see a dentist, but many people will surely buy jewelry in China if that company can offer the same value at a better price.  That is why it is a big benefit if your business operates solely in a specific location rather than nationally or internationally. 

• Service: Do you offer a service versus a product?

For the same reason mentioned above offering a service with online advertising usually does better than offering a product.  Services like: doctors, dentists, plumbers, and real estate agents do much better than selling products like clothing or jewelry because they are usually located in a specific city or region and they usually have a much higher value.   Not only do services usually cost more than products customers who like your service will usually come back to you on a re-occurring/regular basis.  An example would be every 6 month’s I see my dentist versus the one time I went to Macy’s and bought a sweater. 

There is actually a fourth reason why services outperform products.  Customers like doing business with people and not products.  You probably have a much better relationship with your doctor than you do with your clothing store outlet.  You probably aren’t very loyal to the store you buy your clothing from; however, you are most likely going to be a loyal customer to those who offer you services like your accountant, dentist, doctor, etc.  For those four reasons: services are usually local, services usually have a higher cost, services are often re-occurring and thus have a higher lifetime value,  and people prefer doing business with people offering services than selling products make services a better investment for online advertising than products.

• Lifetime Value: Do your customers bring you a lot of value?

When you acquire a new customer you are going to want to get as much value out of each new client as possible considering you will be paying to acquire them.  To see if advertising is worth it for you, you will want to establish an idea of how much each client’s “lifetime value” is and not just how much they pay for your product or service.  An example is Starbucks.  Starbucks pays to do online advertising, but you might ask why.  Starbucks only generates around $5-$10 per order and Starbucks probably pays much more than that to acquire the customer.  So why does Starbucks advertise online?  Because Starbucks is banking on the fact that each acquired customer will go back and continue to buy coffee from them.  They aren’t just looking at that one-time sale as their return; they are looking at the lifetime value of their customers who will often return weekly or daily for their ‘cup of Joe’. 

Likewise, you will want to calculate how much each client is really worth.  If you are a dentist and you acquire a customer for $200 you might not make much money on their very first appointment; you may in fact just break even.  But if you do a good job, that client will come back every 6 months for as long as they live in your city.  They may also bring their family and recommend you to their friends further increasing that customer’s lifetime value.  You will want to consider all of these variables (returning customers, word of mouth of customer, etc.) when you calculate the lifetime value of your customers.  The higher the lifetime value of your customer the more likely it is you will get a good return on investment when you advertise online.

OVERVIEW

You want to have a website that is clean and easy on the eyes so that clients who go to your website don’t immediately want to click the back button.  Your website should have a clear call to action so clients know what they need to do when they go to your website and your website should have a responsive web design so your website shows up well on computer, tablets, and mobile devices.

You will need to have a budget to spend on online advertising and enough of a budget to make learning the PPC platform worthwhile for you.  I would actually recommend hiring a professional, at least at first, to setup your account for you so you know that you aren’t wasting a lot of your money.  You don’t want to end up wasting a lot of your budget making you frustrated with the idea that online advertising doesn’t work for you when in fact it could be a big winner.

It is beneficial to have a business that is based on a local location versus one that is national or international.  Although you won’t have as large of a pool of clients to acquire your competition is drastically reduced if you are a business that is bound to a specific location. 

Services generally perform better than products for four main reasons: services are usually local, services usually have a higher cost, services are often re-occurring and thus have a higher lifetime value, and people prefer doing business with people offering services than selling products make services usually a better investment for online advertising than products.

Lastly, you will want to acquire high lifetime value customers.  Customer’s with a higher lifetime value give you much more wiggle room when it comes to online marketing.  You can afford to pay higher cost per customer acquisition if you know when you acquire a customer they bring in a high lifetime value.  There you have it, the five criteria you should look for before engaging in online marketing!

If you have any questions or comments please email me at [email protected].  Growing a business is exciting and fun and I’d love to help you.

I wish you the best of luck,

Joshua