Using Search To Mitigate/Reduce Business Risks

by Jeff Quipp October 6th, 2008 

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Talk to most people and ask why they engage in search and they'll answer … "because it gets results". There's no question; search is a very important part of the marketing mix.

That said, many people and businesses do not necessarily understand all the inherent benefits of search. Consider for example, the ability of search to mitigate or reduce certain types of business risks. Accordingly, the remainder of this post will assess the numerous ways that search can help mitigate or reduce business risks. In particular:

    1. Marketing Channel Diversification: the more marketing channels bringing in positive ROI (return on investment) to a company, the better. If a company relies too heavily or just one or a few channels, that really is not a solid foundation for a successful business model (consider Porter's Model below). The company's bargaining power is ultimately reduced.

    Porters 5 Forces Model

    2. Economic Risk Diversification Often, economic conditions in one country or region are not the same as in other countries or regions. For companies marketing their wares/services in but one country/region, all their proverbial eggs are in one basket so to speak. Consider the possible fate of a company marketing its services only in a small mining town dominated by one employer, when the employer pulls the plug on the mine. Instead, the company could have anticipated this probability, and started promoting its services via search in other surrounding towns in advance of the closure.

    3. Regulatory and Compliance Risk Diversification Sometimes, political decisions can have catastrophic impacts on companies eg. the U.S.'s embargo against Cuban products. If you were a Cuban cigar distributor at the time of the introduction of the Helms-Burton Act, and the U.S. was your only market … you would have been in financial trouble. But now imagine, if you were already marketing Cuban cigars in 50 other countries around the world, which search makes infinitely easier. The impact would have been dramatically reduced.

    4. Reputation Management Risks Occasionally, negative press surfaces about companies, and while sometimes meritted, other times its completely unjustified. Often, this type of press or negative mentions appear for your business name in the search results. When this occurs, or often even in advance of this possibility occurring, search can be used to reduce the probability that these results will ever be seen.

    5. Staffing Issue Risks In industries requiring specialized knowledge, it can be difficult to attract resumes from qualified individuals using standard approaches. All to often, you're drawing from a very limited pool of individuals, or from expensive headhunters. Obviously both methods dramatically increase the cost of hiring and paying qualified individuals. More and more however, attracting strong candidates occurs online, and search can play a big role. It can also help to keep the employment prospect funnel full at all times.

In order to determine if search can help you mitigate business risks, I'd encourage most business to do an introspective analysis of such risks, identify what your risks are, the probability of each occurring, and then devise (simple) solutions to mitigate those risks both with and without search.

If you know of other business risks that search can help mitigate, please let me know in the comments, and I'll add it giving you full credit.

Hopefully, this post can act as a good launch pad for this risk mitigation process.

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11 Responses to “Using Search To Mitigate/Reduce Business Risks”

  1. Utah SEO says:

    Great post Jeff. Economic risk is highly important and probably one of the most overlooked things.

  2. kouji says:

    can't think of other forms of risk to add. it looks like search has an overall positive effect in the sense that it creates yet another avenue for a firm to do the things it normally does, and this diversification generally reduces most forms of risk.

  3. Michael D says:

    "many people and businesses do not necessarily understand all the inherent benefits of search" I'll be quoting you on that. I think you nailed it be explaining the more channels the better odds at ROI. I find myself frequently educating others regarding the importance of more than just a website. The single channel approach stinks and I think using the term channels is a good way to explain opportunities to none search savvy business owners.

  4. Thanks for the informative read! Not everyone will keep all those factors in consideration though.

  5. Great post Jeff, I desperately need to take this on board especially as the credit crunch is hitting us hard in UK!

  6. Goongee says:

    Nice tips. I especially agree about the diversification. If it wasn't for that, I would have ran into problems a long while ago.

  7. Eva White says:

    Great Post. I think in today's online situation its the new entrant competition that is the most portent force to deal with.

  8. Good post, Jeff. We have done online reputation management for many companies and this is an important aspect in a business brand. Addressing and tackle the problems or negative results early can minimize the risk to a business.
    Rif Chia

  9. Great post, really informative, I like the image in the middle :D

  10. Great post Jeff! Just shared your article with my colleagues. Will be of great help to those who are starting up fresh.

  11. I like the picture for number one, and how it shows that more marketing channels can bring in a positive return on the investment made.as far as the staffing issue risks, online methods to obtain individuals sure have served positively.