Comcast is the Worst Company Ever

By Mike Myatt, Chief Strategy Officer, N2growth

In our area Comcast has a virtual monopoly on communication services in that they are the only vendor that provides a true bundled solution comprised of Internet, telephone, and cable. What’s more, they are aware of their dominant position in the market and truly abuse the situation. There are good companies, bad companies, and then there’s Comcast…Comcast is probably the worst company I’ve ever done business with, and is a perfect case study in how not to operate a business enterprise. Comcast finally hit an all time low with me this morning, and in today’s post I’ll share their most ridiculous and insulting tactic yet…

Comcast and customer service are not synonymous. Over the years I have experienced excessively long hold times, and incredibly rude technicians and other employees. The following links to YouTube videos show the frustration that I and countless other subscribers feel as a result of our dealings with Comcast:

  1. Comcast Customer Service – Business As Usual
  2. Comcast’s Solution to Long Hold Times
  3. Comcast’s Stellar Employees 

As if the above videos are enough of a testimony as to the problems at Comcast, at about 11:00am this morning I happened to glance out my window and notice a solicitor approaching my front door. Since there was no knock, or ring of my door bell, curiosity got the better of me and I went to the door to see what was left behind. While it was no great surprise that I found a very well designed piece of marketing collateral hanging on my door, what was a surprise is the text that was written on the door-stuffer…Comcast had left me a very slick, four color brochure stating the following:

“Sorry we missed you…A Comcast technician stopped by to check your service and ensure it is working to your total satisfaction. We are making the rounds to answer any questions our customers may have regarding Digital Cable TV, High Speed Internet, Comcast Digital Voice.”

My problem is that the brochure was not delivered by a Comcast technician, and they didn’t miss me…they intentionally avoided me. Since the solicitor (not technician) didn’t knock or ring my bell, they really didn’t show much of a desire to check on my satisfaction, the quality of my service, or answer any questions that I might have. They were not “sorry they missed me” as they never intended to speak with me…Does this strike you as wrong, disingenuous, or just an outright lie?

Comcast is an organization that is leadership and management challenged. They don’t seem to value their customers, and based upon my experience today, they certainly don’t value ethical business practices. Comcast is a poorly run company and proof of why monopolies are not good for the consumer. I can’t wait for my next rate hike… 

Secondary Markets 101

By Mike Myatt, Chief Strategy Officer, N2growth

With the meltdown in credit markets over the past several weeks I thought it may be insightful to look beyond the typical cries of mutual greed on the part of lenders and borrowers alike to some of the lesser known underpinnings associated with this debacle. I’m not disputing for a second that many lenders have pushed the razor’s edge with aggressive, perhaps even in some cases predatory lending, and that many borrowers were (and still are) all too willing to accept potentially disastrous loan terms in an attempt to create a short-cut in the wealth building process. However my suspicion is that most of you reading this post don’t have clear visibility to the fact that there is a third head to the greed monster which I’ll reveal in today’s post…

The sad reality is that mercenary investors and rating agencies (their co-conspirators) will always be willing to make a market and arbitrage the greed factor exhibited by lenders and borrowers. As I mentioned above, it is really only the lender and borrower sides of the three headed greed monster that make it into the mainstream media, and as such constitute the public veneer on what is actually a much deeper trough of gluttony. Those reading this post not familiar with capital markets need to be aware of the behind the scenes conflict of interests and greed mongering that takes place in the form of the roles played by investors and rating agencies in order to have the third head revealed and possess a full picture of what caused this most recent meltdown.

The three primary global rating agencies are Standard and Poors, Moody’s and Fitch Ratings. These three rating agencies and a hand full of lesser known agencies (A.M. Best, Baycorp, Dominion, UK Data, etc.) assign credit ratings for issuers of debt obligations which allow them to be placed into securitized pools and sold into secondary markets transferring the balance sheet risk from the original lender to the institution purchasing the structured credit product in the form of an asset backed security.

In order to further explain and expand on the above paragraph let’s start with a bit of history…If we roll back the clock we can easily point to a time when loans were underwritten by the institution that was going administer and service the debt for the life of the loan, which means that all risk associated with loan performance was born 100% by the institution that originated the debt. You see all lenders were once upon a time portfolio lenders holding all credit obligations on their own balance sheet. This meant that lenders tended to be more conservative in their underwriting guidelines because it was them, and only them, that stood to suffer in the event of a default.

Okay, so you may be asking what do investors and credit agencies have to do risky loans? The answer is virtually everything. In today’s era of modern lending which came on the scenes in the late 1970’s and early 1980’s, and whose proliferation has only gained momentum since then lending practices have shifted focus from portfolio lending to off-balance sheet loans, the main profit center in lending has shifted from the retail side of the table to the wholesale side. In today’s market loans are rarely structured to be held on balance sheet by lenders. As opposed to the old-school lending practices described above, most lenders now sell a majority of their debt to third party investors. By creating a secondary market for lenders to sell into, they are able to improve liquidity, increase loan production, and transfer risk. It all sounds quite reasonable on the surface doesn’t it?

The problem in my opinion begins when lenders begin to underwrite to a different standard (aided by the rating agencies) with the sole intention of moving their loans off balance sheet. You see when lenders sell their loans into secondary markets they are transferring default risk by selling the future value income stream for net present value fees. When this process of transferring risk to investors in exchange for a fee occurs, lenders are really no longer lenders, but in fact become little more than brokers as they have no long-term qualitative incentive inherent in their lending practice. When a chief credit officer becomes a chief investment officer the emphasis is clearly on making markets not quality underwriting. 

The bottom line is that loans don’t stand on their own merit today. Rather they are propped-up by a broad array of financially engineered synthetic derivatives and credit enhancement techniques which should never substitute for sound underwriting. Artificial market making run amuck for fee generation does have the impact of boosting short-term revenue and profit. This is all well and good until the tires come off due to poor underwriting standards. The plot has only thickened of late as the Federal Reserve seems to have expanded its domain from fiscal oversight to financing private M&A transactions, and underwriting and making markets in the purchase of the very asset backed securities that started this problem to begin with…

If there is a bright side to this debacle it is that this most recent shake-up is really nothing new as we experienced something similar during the last credit downturn…does anyone remember the Resolution Trust Corp? As memories have faded, financial engineering has evolved, and the role of rating agencies has not been properly governed, the problem we experienced in the 1980’s has just remanifested itself on a grander scale and on a global stage. A major difference between underwriting debt for a securitized mortgage pool and underwriting a loan to be held in the lender’s own portfolio is that, in the former case, the emphasis is on cash flow whereas in the latter case the emphasis is more on value. The reason for this is that the capital markets require above all certainty of cash flow to service securitized debt. The failure to pay debt service on time will immediately impact the value of the securities in the secondary market, causing loss to investors selling prior to maturity (i.e. the recent collapse of Bear Stearns). By contrast, traditional balance sheet lenders normally do not continually adjust the values of their portfolio loans but rely on their initial underwriting to assure the loan will be repaid either by the borrower or through a foreclosure.

From the retail borrower’s perspective, along with securitized lending comes a total lack of accountability in mortgage servicing. Because the originating lender no longer services the loan post-closing, borrowers are now forced to navigate a complex world of master servicers, sub servicers, and special servicers when they have an issue with their loan. Borrower’s facing a challenge often cannot even determine who it is that they should contact about their loan. Making matters only worse is the fact that many of these agencies won’t even speak to a borrower unless the loan is in default.  

So what’s the answer? It all begins with regulating the rating agencies. I’m clearly not against the many intended benefits that secondary markets afford which have been described above, but I vehemently oppose the manner in which these markets are governed. I made earlier mention of rating agencies being co-conspirators with lenders, and until the rating agencies become something more than a codefied self-regualtion scheme then problems will continue to exist. A great first step in this process was the Rating Reform Act of 2006 signed into law by President Bush, however the operative phrase here is “first step”.

Until the rating agencies set underwriting guidelines based upon managing default risk and prevention of predatory lending, as opposed to participating in a pay to play environment bent on maximizing value, we are going to continue to run into problems. Moreover don’t think that this problem only exists in the sub-prime lending market. We are quite likely to see further proliferation of the credit crisis as these same problems spill over into traditional mortgage, commercial mortgage, and business lending arenas. Our capital markets are very fluid and very sophisticated, but they are nontheless very scary as a result of flawed logic, a lack of accountability, and a system that places profit incentive above sound risk management. Get prepared for the meltdown ahead…

Mid-Market Capital Opportunity

By Mike Myatt, Chief Strategy Officer, N2growth

Today’s post will focus on the analysis of mid-market capital providers, which I believe provide the most significant opportunity for companies seeking funding in today’s tight credit markets. If on one end of the spectrum you’ve recently been given the cold shoulder by a bulge bracket lender, or at the other end of the spectrum been rebuffed by a smaller financial player, you’re not alone. In the text that follows I’ll lead you to the pot of gold at the end of the rainbow…the mid-market capital providers.

The tightening of lending and investment guidelines all but have the smallest and largest capital providers sitting on the sidelines engaging on only the most coveted opportunities. In today’s market small banks are hesitant to even come close to brushing up against loan-to-one restrictions, or maximum legal lending limits. At the same time, bulge bracket players (the largest 10 investment banks – Bear Stearns, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley, and UBS) are largely still licking their wounds. With only the rarest of exceptions both ends of the capital markets are closed for new business.

This presents a veritable land grab scenario for the mid-market players who are not bashful about exploiting the opportunity afforded them by the absence of their smaller and larger competitors. The simple reality is that it is much easier to get a $50MM or $100MM deal done than it is to swim upstream with a $5BB dollar transaction or to swim downstream with a $5MM dollar play. In addition to mid-market firms being well capitalized, they are also stealing talent from the larger I-banks who have recently made tremendous cut-backs in staff. It is my opinion that what your seeing in the capital markets represents the perfect storm for companies whose capital needs sink up with mid-market underwriting guidelines.

Regardless of what level of the capital stack your looking to fund, focus your efforts on the mid-market investment banks, regional banks, private equity firms, hedge funds, and foreign banks. Who knows…maybe you can even attract a bulge bracket player who is slumming and wouldn’t ordinarily otherwise consider a smaller play but for current market conditions. Happy hunting…

How to Create a Powerful Tagline

By Mike Myatt, Chief Strategy Officer, N2growth

Are Unique Selling Propositions (USP) different than Taglines? The correct technical answer is absolutely yes, but you’d be surprised at the number of people (even marketing types) that don’t know the difference. However the truly sad part is not just in the lack of understanding, but in the missed applicational leverage and lost opportunity costs associated with the lack of understanding. In today’s post I’ll define the difference between the two, as well as how to use each of them to their maximum benefit…

Unique Selling Proposition: A USP is a value statement that communicates what sets your business, product, or service apart from the competition. A USP is not only valuable in helping potential customers to make a buying decision but it is also critical in helping your company align its strategy with regard to positioning and execution. 

Tagline: A tagline is an actual piece of marketing copy written to sum up what you do, or what you want your prospects to know about your product or service. It can also reflect a key benefit they will reap if they purchase your product, service, or solution. A tagline is the new media version of a company slogan. It can be a mantra, company statement, or even a guiding principle that is used to create an interest in your company, product or service.   

I like to think of a USP as strategic and a Tagline as tactical. USPs define, while Taglines summarize and sell. Now where things really start to get interesting (and powerful) is when you learn how to combine the two into what I refer to is a Core Marketing Message. The best Taglines actually include the USP, and when implemented properly create a memorable and lasting enhancement to your brand. Following are a few examples are combined Taglines that include USPs:

  • Circuit City’s tagline is: “Just What I Needed” and the USP is Choice
  • BMW’s tagline is: “The Ultimate Driving Machine” and the USP is Quality
  • Amazon.com’s tagline is: “Earth’s Biggest Bookstore” and the USP is Choice
  • McDonald’s tagline is: “I’m Lovin It” and the USP is Experience
  • Skype’s tagline is: “The Whole World for Free” and the USP is Low Price

Other than not having one at all (which in my opinion is better than having a bad one), the biggest mistakes made by amateurs is using a tagline to just explain what they do. For example, how many times have you been driving down the street and observed a contractor’s truck that says something akin to ABC General Contractors – “Serving all your contracting needs”. While this clearly states that you are a master of redundancy it does nothing to separate you from the competition and it adds no value whatsoever.

The last point I want to make is that great taglines are memorable…they not only catch your attention, they hold it. Great taglines appeal to, or reinforce basel emotions. The best taglines make bold statements, are provocative, engender trust or confidence, are extremely creative, and they support a brand promise.

Bottom line…If you’re going to use a Tagline make sure you take the time to think it through such that it adds to your brand equity rather than dilutes it. 

Learning from Eliot Spitzer

By, Mike Myatt, Chief Strategy Officer, N2growth

The recent debacle surrounding New York Governor Eliot Spitzer has dominated the media headlines in the last few days. While I have long made it a point not to sit in judgment of others as it is very difficult to properly connect the dots from afar, it is my belief that there is something to be learned from any gross error in judgment. In today’s post I’ll attempt to stay away from personal accusations and will provide you with my thoughts about what can be learned from such a tragic and public mistake…

Regardless of how you feel about Governor Spitzer and his recent actions, he is still after all more than a businessman and politician he is a human being who is a husband, father, and community member. Even when the facts stack-up against someone and there is no doubt as to fault or guilt, I always find it tragic when people’s lives are reduced to gossip and innuendo. Humans are imperfect creatures, and I have yet to come across any business leader or politician who can’t rattle off several decisions that they wish they hadn’t made. It just so happens that some mistakes are more public and tragic than others, and for most people it is much easier to point the finger at those who have been in the spotlight rather than to deal with their own private indiscretions.

It is also important to note that there are indeed at least two sides to every story, and that what often times appears in the media as hard news can actually be editorial commentary that may, or may not, portray the reality of a given situation. Furthermore, just knowing someone who knows someone will rarely provide you with accurate information relating to the actual events of a situation…especially one veiled in controversy.

Okay, I’ll climb down from my soap box for a moment and provide you with some perspective surrounding Mr. Spitzer’s activities over the past few days. While some of my comments below specifically address my thoughts regarding Mr. Spitzer’s mistakes, I would encourage you to take a step back and read the following commentary with the bigger picture in mind As you read the following comments think about your perspective on people as well as about how you choose to view life in general:

The Facts: Wrongdoing is certainly wrongdoing, and even the best of intentions don’t justify deviant behavior. That being said, good intentions had nothing to do with Mr. Spitzer’s actions. If the allegations in play turn out to be substantiated (which appears to be the case), federal crimes were committed, the public trust of his constituents was violated, and his family has been devastated. Whether or not he is prosecuted is not really the issue here…He will resign or be impeached, his dream of someday becoming President of the United States has gone up in flames, his reputation has been harmed, and worst of all he has emotionally and psychologically hurt his wife, three teenage daughters, and his extended family as well.

Why this Happened: From my perspective this is not just a simple case of sexual addiction. While his personal indiscretions appeared to have gone on for years, through my lens of observation this appears to be a case of poor decision upon poor decision, further compounded by an out of check ego, pride, arrogance, an addiction to power, an quite possibly an extreme case of narcissism bordering on sociopathic behavior. When all is said and done, I believe you’ll find the consensus opinion to be that Mr. Spitzer felt himself to be above the law. Wealthy beyond means, Princeton and Harvard educated, a political crusader with his eyes set on the White House, Eliot Spitzer felt invincible.

What We Should All Take Away From This: Nobody is invincible or above the law…Some notable quotes also seem to apply here: “pride comes before the fall”, “don’t let your ego write checks you cannot afford to cash”, and “your sins will surely find you out”. In this media and technology driven world nothing will be kept a secret for long. Whether recorded in audio, video, IM files, phone records, credit card history, e-mail archives, personal testimony, or any number of other forensic audit trails, NOTHING IS TRULY PRIVATE. Therefore, my suggestion is that you consider your thoughts and actions carefully when decisioning anything of consequence. I would recommend putting any meaningful decision up against the following litmus test:

  1. Perform a Situation Analysis: What is motivating the need for a decision? Who will the decision impact (both directly and indirectly)? What data, analytics, research or supporting information do you have to validate your decision?
  2. Subject your Decision to Public Scrutiny: There are no private decisions Sooner or later the details surrounding any decision will likely come out. If your decision were printed on the front page of the newspaper how would you feel? What would your family think of your decision? How would your shareholders, constituents, and employees feel about your decision? Have you sought counsel and/or feedback before making your decision?
  3. Conduct a Cost/Benefit Analysis: Do the potential benefits derived from the decision justify the expected costs? What if the costs exceed projections and the benefits fall short of projections?
  4. Assess the Risk/Reward Ratio: What are all the possible rewards and when contrasted with all the potential risks are the odds in your favor or are they stacked against you?
  5. Assess Whether it is the Right Thing To Do: Standing behind decisions that everyone supports doesn’t particularly require a lot of chutzpa. On the other hand, standing behind what one believes is the right decision in the face of tremendous controversy is the stuff great leaders are made of. My wife has always told me that “you can’t go wrong by going right” and as usual I find her advice to be spot on Never compromise you value system, your character or your integrity. Do the right thing… 
  6. Make The Decision: Perhaps most importantly you must have a bias toward action and be willing to make the decision. Moreover you must learn to make the best decision possible even if you possess an incomplete data set. Don’t fall prey to analysis paralysis but rather make the best decision possible with the information at hand using some of the methods mentioned above. Opportunities and not static and the law of diminishing returns applies to most opportunities in that the longer you wait to seize the opportunity the smaller the return typically is. In fact, more likely is the case that the opportunity will completely evaporate if you wait too long to seize it. 

Lastly, here is some food for thought…It has been my experience that those most critical of certain behaviors likely have their own issues they’re trying to distract attention from (case in point, Mr. Spitzer aggressively prosecuting prostitution crimes). What we should all be concerned with is not judging others, but rather how we treat other individuals in general during both the best of times and in worst of times. Don’t allow yourself to be a fair weather friend, a gossip, or insensitive jerk Rather understand that most of us are not privy to the inner thoughts of others and their motivations. We need to keep in mind that all people make mistakes and that mistakes don’t necessarily make you evil they just make you human.

Thriving During a Recession

By, Mike Myatt, Chief Strategy Officer, N2growth

Recession are we, or aren’t we? While the economists and pundits are arguing about whether or not the US is in a recession, my opinion is that we are. The classic definition of a recession is a decline in GDP for two consecutive quarters. However, it is important to keep in mind that economic data and statistics are reported on a historical basis, and by the time the economic data is released to confirm that the economy has fallen into a recession, the recession has already taken hold. In today’s post I’ll share my thoughts on how to successfully lead your business through an economic downtown

As I mentioned in the opening paragraph, lagging economic data is not the information you should use to make strategic business decisions. Don’t wait until there is a formal acknowledgement of a recession to start planning how you’ll navigate tough times. Rather, use the many present warning signs of the slowing economy (slowing job growth, declining Dollar, constricting availability of capital and credit, slowing retail sales, lack of consumer confidence, stepped-up Fed intervention, correcting stock market, growing inflationary trends, etc.) to adjust your strategy and tactics while maneuvering is still a bit easier.

The lack of astute, decisive, and proactive thinking by your executive team in a slowing economy can make it much more difficult to survive the large challenges that likely lay ahead. I can’t even begin to tell you how often I’ve heard statements like: “I’m concerned about the stability of the market, and want to wait and see how everything shakes out over the next few months before I make any decisions”, or “I’m cutting back on marketing expenditures until I see how bad the economy is really going to get”. This type of thinking is akin to driving your car toward a brick wall and watching the brick wall get closer and closer, yet doing nothing to alter your course. My advice is simply not to hesitate change course now while there is still time to avert disaster.

Let me state that I realize that many CEOs and entrepreneurs have only seen growing, robust, and even frothy markets, and that for many chief executives this is the first time they’ve had to face the test of a strong economic correction. That being said, there is good news The simple truth of the matter is that more tangible, enduring wealth and market dominant positions are created in declining markets than in advancing markets. Significant rewards exist for those smart enough to move forward and strategically leverage their business model to exploit opportunities while their competition pulls back and braces for tough times. The following business principles will help your business thrive regardless of the state of the economy: 

  1. Don’t Stop Growing: Get very aggressive while your competition pulls back, starts slashing costs, and is asleep at the helm. While it is certainly necessary to reduce extraneous expenses, resist the temptation to slash expenses across the board, and especially resist the temptation to cut budgets in the areas of sales, marketing, and business development. Let it be noted that I am a strong advocate of sound financial governance and the prudent implementation of cost containment measures. However not when applied in a vacuum irrespective of the ripple effect across the enterprise. An enterprise can have all the cost containment in the world, but without revenue what does it matter? Remember that cost containment is not a business strategy. The strength of your sales funnel, and your ability to create revenue will never be as important to your business as when you face the reality of a slowing economy. Use the caution of your competitors to your advantage so that by the time the economy starts its recovery you will have created a huge gap in market share and brand equity.
  2. Improve Communications: The frequency and the quality of your communications, (both internally and externally) needs to be at an all time high. The genesis of most business mistakes can be traced to poor communication, or worse yet, no communication at all. While strong markets and bullish economies are forgiving of management errors, down economies are not. Make sure that all employees have a clear understanding of mission and vision, that all stakeholders are inside the communication loop, and that you err on the side of over communication.
  3. Leverage Technology: Use technology and business automation to provide increased leverage and a platform that embraces cost-effective scalability. Strategic investments into process improvement and business accelerators will allow you to shorten cycle times, bleed out system inefficiencies, and create needed economies of scale. If your enterprise replaces innovation with caution and extreme cost cutting, you will not only find survival more difficult, but if you’re still around when the economy starts to recover, you’ll find yourself at an operating deficit compared to more savvy competitors who did not make the same mistakes.
  4. Outsource, Outsource, Outsource: Be very strategic about head count acquisitions, only making key hires that produce immediate and significant impact. It has been proven time and again that the most chaotic and cost prohibitive implementations are conducted with organic efforts. The failure rate of internally implemented initiatives as measured against initial expectations show failure rates in excess of 75%. There is significant leverage in outsourcing implementations to competent subject matter experts (SME’s). Outsourcing frees your internal resources to focus on highest and best use activities that allow for continuity of mission critical agendas. Outsourcing to SME’s will offer the following benefits:
  • Shorter time frame to implementation.
  • More cost effective implementation. 
  • Access to existing toolsets and solution sets that have a proven track record of success.
  • Access to a more diverse base of skill sets and core competencies. 
  • Access to best in class human capital within the area of domain expertise required. 
  • Reduction of investment into infrastructure expenditures. 

Velocity to market is critical in the success of any business. In a down economy the stakes are higher, the money and resources are tighter, and the decision-making ability of your management team will be the difference between success and failure. If your management team can streamline operations, facilitate solid strategic planning, conduct flawless tactical execution of business initiatives, and recruit, motivate and retain best in class human capital, your business will gain ground while your competition is “down-sizing” or “right-sizing”.
 

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Keyword Analysis 101

By Mike Myatt, Chief Strategy Officer, N2growth

Today’s Myatt on Monday’s question comes from a marketing executive who asks: I hear a lot about keyword optimization, but what is this specifically, and how important is it really?” If you want to be successful on the Internet, understanding how to leverage Keyword and Keyword phrases is imperative. While understanding the art and science behind keyword analysis is only one part of search engine optimization, it is nonetheless a critical component. In today’s post, I’ll provide an overview that will help readers understand how keywords impact search engine marketing…

Your keywords serve as the foundation of your Internet marketing strategy. If they are not chosen with great precision, no matter how aggressive your marketing campaign may be, the right people may never get the chance to find out about it. So your first step in plotting your strategy is to gather and evaluate keywords and phrases. Search engines (Google, Yahoo, MSN, Ask.com, etc.) use algorithmically based programs referred to as “search-bots” or “spiders” to crawl your website reading meta-data. Your keywords and keyword phrases comprise a subsection of your website’s meta-data. If they do not exist, are improperly selected, and/or not correctly supported by on page content, your website will be virtually invisible to the search engines, and therefore virtually invisible to those potential purchasers of your products and services.

Put simply, search engines are the vehicles that drive potential customers to your websites. But in order for visitors to reach their destination – your website – you need to provide them with specific and effective signs that will direct them right to your site. You do this by creating carefully chosen keywords and keyword phrases. Think of the proper keyword optimization as the key ingrediant in the secret sauce of the Internet. If your keywords are not relevant, incorrectly structured, too general, or too over-used, the possibility of visitors actually making it all the way to your site – or of seeing any real profits from the visitors that do arrive – decreases dramatically.

You probably think you already know EXACTLY the right words for your search phrases. Unfortunately, if you haven’t followed certain specific steps, you are probably WRONG. It’s hard to be objective when you are right in the center of your business network, which is the reason that you may not be able to choose the most efficient keywords from the inside. You need to be able to think like your customers. And since you are a business enterprise, and not the consumer or end-user of your products and services, your best bet is to go directly to the source.

Instead of plunging in and scribbling down a list of potential search words and phrases yourself, ask for input from as many potential customers as you can. You will most likely find out that your understanding of your business and your customers’ understanding is significantly different. The consumer is an invaluable resource. You will find the search terms you accumulate from them are words and phrases you probably never would have considered from deep inside the trenches of your business.

Another great source of keyword information is to look at the competitive websites that rank highly under coveted keywords.  Simply conduct a keyword search for a keyword or keyword phrase that you would like to indexed under. Click on the top organic listings of the websites that comprise the top returned searches. When you land on one of the competitive home pages, right click your mouse, and then click on view source which will reveal the source code for that webpage. Near the top of the page you’ll find the sites meta-data including a list of all their keyword and keyword phrases. By reviewing the keyword structure of competitive websites that rank successfully, you will have better clarity of what you should do on your website in order to be competitively positioned.

Only after you have gathered as many words and phrases from outside resources should you add your own keyword to the list. Once you have this list in hand, you are ready for the next step: evaluation. The aim of evaluation is to narrow down your list to a small number of words and phrases that will direct the highest number of quality visitors to your website. By “quality visitors” I mean those consumers who are most likely to make a purchase rather than just cruise around your site and then take off for greener pastures. In evaluating the effectiveness of keywords, bear in mind three elements: traffic, relevance, and intent.

Traffic: Popularity is best guaged by traffic. If a search term produces no traffic it has little value. Traffic is the easiest to evaluate because it is an objective quality. There are many tools (free and paid) that will rate the popularity of keywords and provide search counts for phrases.  Tools such as WordTracker will even suggest variations of your words and phrases. The higher the number this software assigns to a given keyword, the more traffic you can logically expect to be directed to your site. The only fallacy with this concept is the more popular the keyword is, the more competitive it is, and thus the more difficult it will be to attain a high organic ranking, and the more costly it will be to compete for paid placements. The bottom line is that if you don’t have page one visibility on search engines for important keywords, you really have no visibility at all.

Relevance: Popularity isn’t enough to declare a keyword a good choice. You must move on to the next criteria, which is relevance. The more specific your keyword is, the greater the likelihood that the consumer who is ready to purchase your goods or services will find you. Let’s look at a hypothetical example. Imagine that you have determined that taffic rankings for the keyword “automobile companies” is very high. However, your company specializes in bodywork only. The keyword “automobile body shops” would rank lower on the traffic scale than “automobile companies,” but it would nevertheless serve you much better. Instead of getting a slew of people interested in everything from buying a car to changing their oil filters, you will get only those consumers with trashed front ends or crumpled fenders being directed to your site. In other words, consumers ready to buy your services are the ones who will immediately find you. Not only that, but the greater the specificity of your keyword is, the less competition you will likely face making your search initiatives more affordable and efficient.

Intent: The third factor is intent or consumer motivation. Once again, this requires putting yourself inside the mind of the customer rather than the seller to figure out what motivation prompts a person looking for a service or product to type in a particular word or phrase. Let’s look at another example, such as a consumer who is searching for a job as an IT manager in a new city. If you have to choose between “Chicago job listings” and “Chicago IT recruiters” which do you think will benefit the consumer more? If you were looking for this type of specific job, which keyword would you type in? The second one, of course! Using the second keyword targets people who have decided on their career, have the necessary experience, and are ready to enlist you as their recruiter, rather than someone just out of school who is casually trying to figure out what to do with his or her life in between beer parties. You want to find people who are ready to act or make a purchase, and this requires subtle tinkering of your keywords until your find the most specific and directly targeted phrases to bring the most motivated traffic to you site.

Once you have chosen your keywords, your work is not done. Your on page content must be written around the keywords and keyword phrases that you have selected. The algorithms’ used by the search-bots assess both the relevancy and redundancy of your keywords. You main keywords should be represented in the URL, the page title, Alt and image tags, at the beginning of the first paragraph, 5 – 7 times throughout the page itself, and should be linked to other pages within your site. This is the killer combination that makes everything come together.

You must continually evaluate performance across a variety of search engines, bearing in mind that times and trends change, as does popular lingo, and the search engines are constantly updating their algorithims as well. You cannot rely on your log traffic analysis alone because it will not tell you how many of your visitors actually made a purchase. Luckily, some new tools have been invented to help you judge the effectiveness of your keywords in individual search engines. There is now software available that analyzes consumer behavior in relation to consumer traffic. This allows you to discern which keywords are bringing you the most valuable customers.

This is an essential concept: numbers alone do not make a good keyword; profits per visitor do. You need to find keywords that direct consumers to your site who actually purchase your products and services, fill out your forms, and download your information. This is the most important factor in evaluating the efficacy of a keyword or phrase, and should be the sword you wield when discarding and replacing ineffective or inefficient keywords with keywords that bring in better profits.

Ongoing analysis of tested keywords is the formula for search engine success. This may sound like a lot of work – and it is! But the amount of informed effort you put into your keyword campaign is what will ultimately generate your business’ rewards.