Good SEO Cannot Compensate for Faulty Business Models!

by Jeff Quipp November 18th, 2008 

Over the years, I've learned a large number of things about the strengths and weaknesses of search as a medium. I've learned things like:

  • search should not be thought of as a stand alone marketing medium
  • PPC (Paid Search) is better for accomplishing some goals than SEO is
  • SEO is better for accomplishing some goals than PPC is
  • content is KING
  • content is KING (did I say that already?)

Perhaps one of the most powerful of these lessons however, is that as powerful as search is, it CANNOT compensate for a faulty business model.

Faulty Business Model

Sure, in the short term a good SEO can help. Those rankings will often bring in some business. Unfortunately, those same good rankings also help to conceal problems with the business model.

What is a Good Business Model?
What does a good business model consist of? Its a direct function of the relative value:price ratio for a product or service amongst competitors, sprinkled with a whole lot of common sense.

If anything is amiss … the company is doomed for failure, expert SEO or not.

Why Are Companies with Faulty Business Models Doomed?
Companies with faulty business models are doomed for a number of reasons. Primarily however, they're doomed because search engines want to recommend sites that SATISFY searcher's needs. Almost by definition, companies with faulty business models cannot satisfy clients and searchers, because either:

  • their price is too high given the value of the product or service
  • their value is too low given the price of the product or service
  • common sense is lacking, severely distorting the value:price ratio … and I suspect this is by far the most common

Long term (in a few more years … not yet though) this means search engines will look at your friend's preferences and opinions (aka social search), and the behaviour patterns of thousands of other searchers, and will rearrange rankings based on those indicators. The result … faulty business models lose.

What Does This Mean for SEOs?
As a result, SEO companies in the future will have to make some interesting business decisions:

  • do we accept or retain clients with faulty business models?
  • how do we identify clients with faulty business models … what are the signals?
  • do we attempt to become management/change consultants too?

What Does This Mean for Businesses?
Ultimately, this means that companies must focus their time and efforts on what it is they do best. They need to ensure they've got solid defensible business models. The more sound the business model, the easier it will be to rank for relevant terms. If not, make the tough decisions, and correct the issues, or Google will!

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13 Responses to “Good SEO Cannot Compensate for Faulty Business Models!”

  1. I love that picture Jeff. I remember once seeing a "chiropractor – marriage counselor" office. While I'm sure they could rank well for the combined term, I don't think the business model worked out.

  2. This is the most true statement i have read in a long time. I have people ask me to do seo frequently because there PPC campaigns aren't working. For some reason they thing FREE traffic is going to make there websites work.

  3. paisley says:

    i've almost always gotten in trouble for saying this in an intordutory meeting.. "i can bring people to your website, but if no one wants to buy your crap, we are wasting our money"

  4. Dudibob says:

    Just curious, how would an automated system declare whether a business was successful or not? Not every website aims to make money from users, not every website displays prices on their websites.

  5. Jeff Quipp says:

    @ Mike – I liked that picture too … really drives home the point.

    @ Submit Articles – soooooo true. Search will only highlight the issues.

    @ Paisley – PRECISELY! First search friendliness, then user friendliness, now business model optimization.

    @ Dudibob – I'm intrigued by your 'automated system' statement. Can you elaborate? Also, while you're correct that not every site displays prices, once social search is integrated, user behaviour tracking will likely take more of a backseat … friend recommendations will comprise the largest portion of the algorithms. Make sense?

  6. Carrie Hill says:

    There was a prime example of this at Pubcon last week.

    A real estate lisitngs website had a poor structure & business model – they asked for site reviews at least twice – and both times were told, by entirely different people, that their goal was unattainable due to some weird domain rules & issues.

    One of the biggest obstacles I see in writing about small business – and in talking to small business owners is the lack of research and testing that should be done to determine the viability of their "idea."

    PPC ads pointing at very small & simple website is a great way to see if your idea is going to make money – before you sink a fortune into developing it.

  7. MiriamEllis says:

    This is such an important subject, Jeff, and I'm not sure I've seen it written about before. I think it can be difficult to make judgments about the effectiveness of someone else's business plan because, after all, you are an SEO, a designer, a PPC guy or whatever. You're not in the coin collecting industry.

    You try to learn what you can from what you see going on on the web, but in the end, small business owners should see a small business advisor when forming their plan, as well as doing tons of their own research. No SEO can take on this job that the business owner needs to have done themselves, long before they start hiring folks like us.

    Great article.

    And, for the weird signs pile:

    Kung Fu Veterinary Clinic

    I swear, I actually saw this once.
    Miriam

  8. Dudibob says:

    @Jeff – Friend recommendation does like the best way to track something like that, but then again, doesn't linking to somewhere work the same way? If you believe a site has value (information, good product, etc) then you'd link to it, pretty much the same as a friend recommendation but in the public face.

    Also if we were to use a friend recommendation system, such as a widget that emails a friend the page your looking at, how would Google track this? would we have to install Google tracking code onto our site? will Google start monitoring every email (similar to what could be happening in the UK)?

    Not trying to pick holes, I'm intrigued to see how Google could pull something like this off without tapping directly into our heads :)

  9. Jeff Quipp says:

    @ Carrie Hill – I couldn't agree more. We (yes we in the search industry) need to develop tools to help us identify where business models and business processes are impediments. I agree completely that research and testing is crucial. Now, you've got me thinking!!!! Thanks Carrie!

    @ MiriamEllis – agreed Miriam, though what if we could help them identify problems, and that would help. Often clients are not really strong business people … they're masters at their craft, but ocassionaly have little business sense. A little insight from a business savy third party can go a long way. We don't have to understand every nuance of their business to be able to say, you need to differentiate yourself in some meaningful way, and "we give better" service" or "we care" is not a key differentiator … everyone says that!

    Kungfu Veterinary Clinic … exactly. Another eg. from an acquintance of mine. He had a coffin shop, and to maximize all the spare time he had sitting in the coffin shop opened a rock band promotional company. So his phone system would say "press 1 for the coffin shop, 2 for Black Sabbath tickets." Can you imagine?

  10. Jeff Quipp says:

    @ Dudibob – links works something like that, but can be manipulated as we've seen on a mass scale. Its much much more difficult to manipulate friend recommendations and opinions … just imagine Google incorporating something like Stumbleupon and Delicious, or better yet more advanced social media yet be be deployed.

    Its not a matter of if … its a matter of when!

  11. It is just a matter of time before link building loses its stand. Universal search, behaviour-based search and intent-based search are coming into play by the first quarter of 2009 and this will seriously affect many SEO business which do not evolve along with the search engine.
    Anna Nguyen

  12. Links works something like that, but can be manipulated as we’ve seen on a mass scale. Its much much more difficult to manipulate friend recommendations and opinions … just imagine Google incorporating something like Stumbleupon and Delicious, or better yet more advanced social media yet be be deployed.
    This is such an important subject, Jeff, and I’m not sure I’ve seen it written about before. I think it can be difficult to make judgments about the effectiveness of someone else’s business plan because, after all, you are an SEO, a designer, a PPC guy or whatever. You’re not in the coin collecting industry.

  13. A year ago I heard on a seo forum "Some people still think that seo is html and content and everyone knows it's all about backlinks" I think in a year we could say "some people thinks it's all aboout backlinks and we know only unique content matter" :)