Staying Alive

The struggles of a business trying to survive.

Thank you to everyone who took the time to read “My AdWords Debacle” — and especially to those who left comments. I’d like to respond to some of the most commonly asked questions. So without further ado:

Why didn’t you spot the pattern sooner?

Am I just plain stupid? Not really. When I sat down to write these posts, the theme I had in mind was how difficult it was for this small-business owner to identify patterns in the blizzard of incoming data and to figure out what to do next. I hope that this idea wasn’t lost as the post changed into a story about AdWords.

Life doesn’t present itself as a tightly formed narrative. It’s my job as a blogger to turn messy reality into an entertaining and informative story. Unfortunately, the format of this blog precludes a full exploration of the many twists and turns along the way. For instance, the sales problem could have been presented as simply a random variation that is mathematically inevitable when incoming jobs range widely in size (which ours do, by a factor of 10). The sales data conform very well to this hypothesis, and that’s a pattern I have often seen in the past.

If I had decided to believe that story, then the post I wrote might have been about planning for inevitable downturns, and I could have expounded on how my cash management and backlog forecasting systems allowed me to ride out the dip without layoffs. Or the story could have been about how we were responding to incoming inquiries and what happened when I decided to completely overhaul our sales process. In fact, I did do that, and I believe that it had a large effect on our return to a profitable level of sales.

Or it could have been about how I responded to a big problem with a multi-pronged counterattack involving my marketing, my sales operations, our shop management, and my own financial planning. That’s what actually happened — I tried everything I could think of, and each change probably had some effect on the ultimate result. But that story is very difficult to tell, in particular as it is happening. It would be better suited for a book, where each thread in the narrative can be developed fully.

It’s also easy to forget that a story that took five days to recount took five months to develop. It’s hard to interpret data until you have enough to draw conclusions. And it’s hard to see how responses will work without giving them some time. It can take quite a while for a situation to develop to the point where it can be understood and even longer to see whether the fixes are working.

One commenter suggested that I could have avoided all of this by simply thinking about what might happen before I took action. Apparently, a little “scenario planning” allows one to see the future with perfect clarity. Really? I’d like to know what planet he lives on. Certainly not Earth, where even plans developed by the richest and smartest businesses and governments can go badly awry.

I’m sure that I am not the only small-business owner who tries lots of things to improve sales and operations. News flash: some of them don’t work and sometimes for reasons that aren’t readily apparent. Any plan you can think of has potential negative consequences. Sure, some plans are so stupid that their downsides would give anyone pause. For instance, I can clearly see that it would be a bad idea to heat my shop by setting my lumber supplies on fire. But then there are plans that seem perfectly reasonable, like introducing new products to see how they will do in the market. Sometimes they succeed, sometimes they fail. Sometimes the failure is complex and subtle. I can’t let that possibility keep me from trying things.

Why don’t you stop managing your own advertising and hire an expert?

Plenty of commenters took me to task for trying to run my own AdWords campaign. Oddly enough, 100 percent of them — by my rough count — were people who make their living as search-engine marketing consultants. But if I look beyond that fact, there is merit to considering the question.

AdWords, after all, is an extremely complicated program. Aside from the mysterious algorithms that drive search results and keyword quality scores, there is the incredibly complex set of controls and reporting functions that Google has provided. If I were starting from scratch today, I would hire someone to help, just as I have hired a bookkeeper and accountant to do my taxes, and a Web site developer to do my Web site. Please keep in mind, though, that I have been running the account for years and have reached a point where it is, by any reasonable standard, successful. If you measure gross sales as the metric by which R.O.I. is calculated, my return is between 15 and 20 to one. It’s worked well enough to expand the business for the last three years and, with improvements we are making to the way we handle inquiries, it should work even better in the future.

I get lots of calls and e-mails from S.E.M. consultants, even on weeks when I’m not writing about AdWords. I take the time to talk to quite a few of them, just out of curiosity. Most of them are reading from a script. “Hi, Paul. I’ve been looking at your Web site, and we think that with the proper help, we can get your search results onto the first page.” Dude, if you were actually looking at my Web site, you’d know that we are already at the top of free results for the search strings I care about.

“Hi, Paul. Did you realize that you could be saving money by optimizing S.E.O. results, which would let you turn off AdWords entirely?” No, pal, I don’t realize that because I don’t believe you, and my grand experiment last year proved that turning off AdWords was a bad idea for me.

“Hi Paul, did you know that optimizing your bids would save you money?”

“Really, that’s interesting. Suppose I’m spending $10,000 a month. How much could I save?”

“Up to 20 percent!”

“And how much would it cost me to hire you?”

“At that level of service, about $2,500 a month.” Sigh.

I had a phone meeting last week with an S.E.M. company that had been recommended by some colleagues. I had contacted them and given them read-only access to my AdWords account so they could look at whatever they wanted to look at. They commented that the campaigns were well organized and that all of the obvious things — split-testing ads, using negative keywords, separate ad groups and separate campaigns, etc. — were already in use. They suggested that I increase my budget to $15,000 a month to get more clicks. But I don’t need a consultant to tell me that increasing my spend by 50 percent will get me more traffic.

Here’s what I would want a consultant to do: First, tell me something I don’t already know about my campaign. Second, offer to provide services free for two months, so that I can see what the results are. I would happily agree to pay for those months, maybe even with a bonus, if the results were to my liking. Also, the consultant needs to be able to explain to me, up front, the thinking behind any suggested changes, and it has to make sense to me. I wouldn’t hire an accountant who believed that the government didn’t actually have the power to tax individuals, and I won’t hire an S.E.M. consultant whose view of how Google works conflicted with mine.

There’s another reason I continue to run my own AdWords campaigns — because I’m interested in it. I’ve always found that marketing is the most challenging and fascinating part of being in business. At its root is the whole concept of getting money, freely given, from people in exchange for the stuff that I have designed and built.

One of the main rewards of owning a small business is the ability to do something you like to do, and I like to think about complex problems. AdWords is just one part of a whole chain of interactions with clients that ultimately results in a sale. I need to understand it to think about how to keep the entire marketing operation working. If I outsource that piece of it, I am handing over a very important piece of our sales operation to people who neither know nor care about how the rest of the process works. There is no one better than I am, at this time, at overseeing our sales operation. I might well create a position within the company to do this, but I am not ready to outsource it.

What else did you do to fix the problem?

I did hire a consultant to examine our selling process and to recommend changes. This has been very interesting and has led to a marked upgrade in the way we respond to inquiries. I’ll be writing about this in the near future.

Are you going to diversify your lead sources?

A number of commenters were concerned that I rely so heavily on AdWords. That’s a legitimate point. In addition to beginning to explore exports and joint ventures, we are submitting (at long last) our application for a General Services Administration contract this month. If accepted, this will allow us to expand the business we do with the federal government. And I am finally beginning an organized effort to establish regular contacts with potential repeat customers. I’ll be writing about that, soon, as well.

Thank you again for your comments. Please feel free to address anything I have missed.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

Article source: http://boss.blogs.nytimes.com/2012/10/31/should-i-manage-my-own-adwords-campaigns/?partner=rss&emc=rss