shakeout search marketing | Fearless Competitor

This afternoon I spoke to another Search Marketing CEO I’ll leave nameless.

I asked him how was business “Great. Exceeding expectations.” I asked him where leads come from. He said “Virtually all our leads come from referrals.” I then asked what he was doing in demand generation. The answer: Nothing.

Welcome to a young and red-hot market — where the number of prospective customers greatly exceed the number of vendors — at the moment. Unfortunately, it is not going to last. Easy money attracts competitors like ants at a picnic.

When revenue is easy, people don’t have to be great at marketing — they simply have to show up. Unfortunately, not every company is in this comfortable situation.

Even when they are very comfortable in one place — like the UK, they find a completely different environment in another place, like the United States. This is why so many struggle to expand around the globe. They simply cannot deal with these differences.

Yours truly came from the school of hard knocks — where one had to work for leads. In most tech companies, leads happen when you go out and make it happen — they don’t fall in your lap as they do in the search marketing busienss today.

Someday soon the search marketing business will slow dramatically and CEO’s will have to get religion — fast! Most won’t and will get swallowed up by companies like Getupdated.

If there is one thing I’ve learned in decades of business, it is this:

There is no such thing as long-term easy money.

Let’s look at some past “sure things” — in which we were told the money was easy:

“Housing prices are going to go up and up. You’ve got to buy ASAP.” (As recently as 2007)

“Tech prices are going through the roof. Buy now or you’ll miss out.” (Late 1990′s)

“Hedge funds are a license to manufacture money.” (Until this Spring)

Now I hear from CEO’s of search marketing firms “We’ve grown x hundreds of percentage points in the last three years. We’re doing great.”

Well, I’ve got news for you — within three years eight out of ten of you will be bankrupt or purchased. While that seems dire, let’s look at the reality:

Easy money breeds competition just like food scraps draw ants.

As I have observed, one cannot swing a cat today without hitting four or six search marketing firms. Picture a massive explosion of search vendors chasing a finite number of prospective customers.

Look at the naive marketing approaches of search marketing firms. Nearly all are run by technology geeks. Browse through their websites and you will find they all say the very same things. Almost all are very product centric — with “post and pray” websites and they hire “smile and dial” salespeople. (See earlier post on why the founders sell and no one else can. This is a symptom of bad management.)

Keep in mind that all of these search firms are calling the same prospects with the same product, product, product messaging. Prospects are fed up. Something has GOT to give.

Someday, someone in the search marketing industry will awaken and say “I’m mad as hell and I’m not going to take this anymore.”

They will focus on customer-centric marketing, business value and they’ll retrain all their salespeople. They’ll redo their websites and start tracking Digital Body Language. They’ll finally get “demand generation.”

But the vast majority won’t and they’ll go the way of the dinosaur.

Good luck and good selling. http://www.jeffreyogden.com/