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Business Owners: Diversify or Die

by MattMcGee Founding Gooru(October 2007) (rank 7th)
 
 
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Business owners: You must diversify.

Earlier this year I was intrigued by a thread on WebmasterWorld about a small business owner who’s laying off employees for the first time in 8 years because organic traffic from Google is down 50%-70%. The writer explains:

“Most all of our losses have come from our long tail keywords.”

At the risk of looking like I’m criticizing this business owner (I’m not), I do think there are a couple very important things for business owners to think about here.

1. You can’t rely so heavily on one source of traffic/customers.

The author of that post mentions having e-commerce sites with 200k products. I hesitate to say this without seeing the site, but there’s a good chance a high percentage of those product pages have landed in what Google used to call its "supplemental index." It’s difficult for any business owner, no matter how big or small you are, to optimize that many pages and get enough quality links to stay out of the supplemental index. A business plan that relies on free traffic from an outside source you don’t control is no business plan at all.

2. Natural search traffic is great, but it’s never enough.

Andy Hagans wrote a terrific post earlier this year on the idea of defensible traffic. It’s about having a variety of traffic sources so you can survive the whims of any one traffic source, such as an algo change, or the introduction of “quality score” into PPC, or whatever else might come next.

As I said in my last Gooruze article, hope is not a marketing strategy.

The small biz owner who was laying off employees has been doing business online since 1998 and a WebmasterWorld member since 2001. This isn’t happening to a newcomer. It can happen to anyone.

Diversify to succeed. Diversify to survive.

 
 

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Re: Business Owners: Diversify or Die

cgoward
Vote:

March 2008

It's more than just advertising advice, Matt, you're talking about business strategy.

Any dependencies you have on uncontrolled third parties for business-critical functions is a risk that needs to be minimized and managed. It also applies to product suppliers, infrastructure services (ie. hosting, utilities), financing sources, etc.

Businesses can't avoid all risk but, as you've said, it can be managed by diversifying.

Only the paranoid survive.
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Re: Business Owners: Diversify or Die

rene-lemerle
Vote:

October 2007

very true matt...it's not just about defending your business against potential downturns. If you're traffic sourcing isn't diversified...then you're potentially forgoing valuable business - NOW!. Given the variety of ways to generate website traffic available, both free and paid, then lack of diversification is unforgivable...think about it, outside of SEO and paid search advertising (PPC), there's also - ad networks, paid links, blogs, video, bookmarking sites, feed advertising, etc etc...see - no excuses.
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