Category Archive: Business Strategy

The State of SEO: OODA Loop Implications

SEO and the OODA Loop

Understand & Make Money

Can you still make money with SEO?  Have Google’s latest actions driven the final nail in the coffin?  Or is there more opportunity than ever?

Read on, and find out.

Over the last two years, the pace of change in the SEO world has been fast and furious.  Internet marketers are giving up in droves as many of their sites are hit by penalties like Panda, Penguin, and the EMD update.  Cries that SEO is dead, particularly for small business, can be heard more than ever.

But it’s not SEO that’s dead, it’s the old ways of doing it that no longer work.  Things change.  They always have, and they always will.  Being able to adapt is key.  And if you can adapt as the competition gets slaughtered, there are more profits to be had than ever.

Here’s how you can use a concept developed by a military strategist to make sure you stay on top.

The OODA Loop

A colonel in the US Air Force, John Boyd developed the OODA Loop concept to apply to combat.  Make no mistake, there is a war going on between Google and the rest of us.  Naive or ill-informed SEOs may not realize this (at their own peril), but it nevertheless is true.

Webmasters want their sites to rank well in search results, and in the face of global competition for the top 10 spots, doing so requires understanding search engine algorithms and giving them what they want.  “Giving them what they want” is a nice way to say manipulating them.  Google doesn’t want to be manipulated.  They want to manipulate you.  The war is on.  And there is carnage.

Google and its foot soldiers (pandas, penguins, and untold others) are slaughtering websites and webmasters at a pace that’s pure crazy.  High quality sites and small businesses that get in the path of these maniacal beasts are acceptable collateral damage to Google’s war machine, and the government isn’t going to stop them.  We’re on our own, friends.

In the face of constant assaults by Google’s monsters, we must adapt in order to survive and prosper.  The OODA Loop provides a framework for doing so.

Observe – Orient – Decide – Act

OODA is an acronym for observe, orient, decide, and act.  In the face of change, we first observe the change.  It takes time to orient ourselves to the new reality.  Only after orienting ourselves to the new reality can we make a decision based on it.  And we can’t act until we decide how to do so, based on that new orientation.  The tricky part in this war against Google is that when Google is at the last phase of the OODA Loop, acting, they’ve forced us into the observation phase.  This leaves us 3 steps behind.

Let’s look at an example:

One day you’re walking along, doing just fine.  All of a sudden a panda jumps out and shoots you right in the face.  It’s rather shocking.  Most people do one of three things in such situations:

  • They fall down and die.
  • They freeze (in fear) right where they are, and the panda slaughters them or they bleed to death while frozen.
  • Since they’re not dead yet, their brains have them keep doing what they were doing…a natural survival response…which doesn’t work very well against deranged pandas and penguins.  They get slaughtered to, just a little bit later, as the panda runs behind them and shoots them several times in the back.

The Solution: Default Response

There’s one way to dramatically increase your chance of survival in the face of a vicious assault.  You need to have a default response.  A default response is an action that gets triggered by an aggressive action against you.  So when you get attacked, rather than getting stuck three steps behind and dying one way or another, you instantly act.  This action in the face of an attack forces the attacker into the observation phase, putting you instantly 3 steps ahead.

Unfortunately, it’s not quite so easy with Google, as we rely on our opponent’s monopoly position in search for our income.  And because Google is such a huge monopoly, our action isn’t really going to kick them back to the observation phase, with us instantly on top.  But in order to survive, you still need a default response.  You need to move to a safe fall-back position from which to observe, orient, decide, and act with good and effective strategy.

Fall-Back Position

It may take some time before you figure out why that panda shot you in the face.  You’re going to need medical supplies and a safe place to hide while you orient to this new reality and decide how to proceed.  And, once you decide to act, the game may continue to change in front of you.

This means you either need enough savings to hold you over, or additional income sources.  Those income sources can be other websites not slaughtered by Google, or businesses/jobs that don’t depend on SEO traffic for income.  Having both savings and multiple sources of income is, of course, ideal.  In this day and age, where SEOs are in a full-on war with Google, having only one income generating site and no savings is a recipe for painful death by one of Google’s soldiers.  It doesn’t matter how good your site is, or how many people love you.  Google doesn’t care.

From your safe fall-back position, it’s time to fully observe, orient, decide, and act.

Strategic Pause

Taking a strategic pause from active web development, giving yourself time to observe the new playing field and orient yourself to it, can be of huge benefit.  Look at sites that were hit vs. sites that weren’t hit.  What are the differences?  Look deeply into your analytics.  What date were you hit on?  Does that date correspond to a known/confirmed penalty date?  Were you hit only for certain keywords or pages, or were you hit across the board?  Once you move to your fall-back position, still in good condition due to your savings or additional sources of income, take whatever time you need to observe and orient as best you can.

See What Sticks

If you’ve attempted to observe and orient with little success, you may have to send out spies to get more intelligence.  Don’t risk your best assets.  Every serious SEO should strive to have a number of sites with different types of content (quality, quantity, text, video, static vs. interactive, etc.), different types of link building (quality, quantity, frequency, anchor text variety and distribution, etc.), and different traffic sources (search, paid, social, offline marketing, etc.).  Once you’ve got a network of sites, you can use them to test the waters.  Throw enough at the wall, and something will stick.  When you know what’s sticking, build on it.

A Time to Fight, A Time Not to Fight

Know that there is a time to fight, and a time not to fight.  If you come to the conclusion that a site, page, or method is dead, don’t fight it…move on.  This may require giving up on a site (it may come back in the future as algorithms change and penalties expire), moving content to a new domain and starting over fresh, or deleting pages with “bad” links pointing to them (allowing them to 404 so the bad links are killed off).

OODA Lag

It takes time to observe, orient, decide, and finally act based on that new information.  Many of your competitors will die right after the initial assault, without defaulting to a fall-back position with a plan.  There will be a vacuum, where sites rank with little effort, simply due to active webmasters being taken out.  If you’ve got a number of test sites or back-ups in the ready, you may be able to take advantage of this vacuum.  Due to the time lag, it may seem like nothing works.  But something will.  It just takes time to figure it out.  For those that do, there will be less competitors and more to gain, as web use still continues to grow year after year.

The 4-Hour Workweek Review: Lessons and Comments

4-Hour Work Week

The 4-Hour Workweek

I recently read “The 4-Hour Workweek” by Tim Ferris.  Obviously, I’m late to the party here as the book has been popular for years.  I’ve seen plenty recommendations for it, but a friend that read it (and said he really enjoyed it) had told me there was no point in reading it as I already live it.  However, I was walking through a book store a couple of months ago, passed the newest version, and figured I’d give it a shot.

First, I’m not exactly living it.  I work a lot more than 4 hours each week.  And actually I think the chance of you working 4 hours a week and making enough money to survive is highly unlikely.  I also seriously doubt Tim Ferris works anywhere near as little as 4 hours a week.

Apparently Tim built an e-commerce site in 2001 or so, selling nutritional supplements.  Back in 2001, if you were so lucky as to have realized that possibility, you could have made a ton of money with relative ease too.  I started my e-commerce site in 2005, and there was nearly no competition compared to these days.  Anyway, Tim was able to outsource most of the operation of his site.  Doing that, I can see how it’s possible to work 4 hours a week.  But that would require you to be lucky…to have seen, had the time and knowledge for, and seized an opportunity very early on.  Most of us aren’t quite so lucky.  Most of us, if not all, did not start an e-commerce site where all operations could be effectively outsourced back in 2001.

For Tim to suggest that because he did it so early on, you can do it NOW…is a little misleading in my opinion.  He’s written at least 2 books since then, promoted them everywhere, etc.  There is no way he’s doing that and working only 4 hours per week!  So that’s my primary complaint about the book.  The main premise is misleading or not applicable to the vast majority of people.  However, there are some excellent lessons in the book.

Retirement Is A Worst Case Scenario

This may have been the most valuable concept in the book.  Most people (particularly in the US) spend their best years working hard as hell, taking only two weeks vacation each year, in order to enjoy themselves when they retire.  But this thinking is really backwards.

First, it takes a LOT of money to retire and maintain or increase your quality of life.  When most people retire, they downgrade their lifestyles due to having less money to live off rather than more.  Second, when most people do retire they’re not in the shape they were in earlier in life…where they can physically enjoy what they missed in their younger years.  They’re not as likely to fly as far, walk as far, or even able to eat and drink as much as they previously could.  If you wait, you may not get the chance, both due to your finances and your health.

Retirement also assumes that you want to retire, that you don’t like your work.  And that begs the question, why are you doing something you don’t like?!?!  You should strive to do something for work that you enjoy.  If you’re doing that, then there will be no reason to retire, other than being physically or mentally incapable.  And that, as Tim writes, leaves retirement as a “worst case scenario”.

Instead, he advocates what he calls “mini-retirements”.  These are 1-3 month vacations you take every few months.  Although I very much agree with this concept, and my wife and I do it, I do have a couple of issues with it.  Some people won’t be able to take 1-3 months off regularly because of the type of work they do.  And some people won’t want to do it even if they can.  I can take 3 months off, almost anytime I like.  But I really don’t like to be on vacation for more than a month.  My preference is to take one or two month-long vacations each year, with a couple of week-long vacations here and there.  People with kids will also have more trouble with this than single people.  But it’s a great concept.  Enjoy yourself NOW.  You only live once, and if you wait, you may not get the chance.

Time Management

Tim writes a lot about the 80/20 rule, where 80% of your profits come from 20% of your customers or 20% of the work you do.  If you can cut the 80% that’s responsible for only 20% of your profits, you free up 80% of your time and keep 80% of your profits.  Then, you can either not work during that time (which is the only way you could even come close to 4 hours per week!), or you can focus more of that time on the 20% of activities that are bringing in most of your profits…dramatically increasing your earnings.  It’s a nice idea, and you may be able to apply it to your work to some degree.

Obviously though, most people, from doctors and dentists to street sweepers and house maids, cannot cut out 80% of their work…because their time is in large part all spent on equal value/necessary pursuits.  But if you’re working on the web, it’s likely you are working on things that don’t really make you much money…things that you can cut out in order to be more productive.

The difficult thing here is that we don’t always know what efforts will produce profits.  For example, I have one site I made in a single day, four years ago, that makes $10K per year in Adsense income, every year.  I do no work on that site, whatsoever.  But I have other sites I spent weeks building that make nothing at all.

Sometimes it’s true that 20% of your work is responsible for 80% of your profits.  But you don’t know which 20% that will be until it’s all said and done!  So apply the concept where you can.

Email Management

This is a part of the book that has already improved my life.  I’ve wasted a lot of time with poor email management.

For years, I wrote the same responses to the same 10 or 20 questions I’d get from my e-commerce customers, over and over and over again.  I knew I should create template responses.  I kept telling myself I was going to do it.  But I never got around to it.  Until I read “The 4-Hour Workweek”.  As soon as I got to the part of the book about standardizing email responses, I wrote about 20 different email templates.  Now, when I get these common questions, all I have to do is select the template and click send.  Over.  It’s already saving me lots of time and mental effort.  If you’re running a business where you have customers or users asking the same questions regularly, minimize this window, install something like Quick Text (I use Quick Text with Thunderbird), and make your templates.  Do it right now.

The other advice Tim gave on email management, is to only check your email twice a day, once at 11AM and once at 4PM.  He then goes on to say you should minimize that to once a week if possible (by outsourcing work email responses).  That’s another great lesson for me.  I used to check my email first thing in the morning, and I’d often get bogged down with it.  Hitting my to-do list first, without even reading my emails, makes me about 10x more productive.  In addition, I no longer leave Thunderbird open.  So I don’t get notifications every minute that I’ve gotten a new email.  If you’ve got 20+ email addresses you monitor, believe me, this is HUGE.  The lack of interruption is really nice on your quality of work and life!  I wish I had taken that advice years ago.

Multi-tasking & Working In Batches

No matter how much you think you can, you cannot multi-task.  Or, maybe you can, but the quality of your work is going to suffer, along with your mental state.  I’ve known this for a long time, but I don’t always practice it.  Tim writes about the problems with multi-tasking, and why we shouldn’t do it.  He’s right.  Do not multi-task.  Do one thing at a time, and don’t allow yourself to be interrupted.

Doing repetitive tasks in batches is another great idea in the book.  If you do some repetitive task regularly, decreasing the number of times you do it, doing it less frequently but in longer bursts, is going to save you time.  It also takes our minds time to shift from one task to another.  So you’ll spend less time in total by batching a single repetitive task, and the quality of your work will be better.

Should You Get The Book?

There are several more great points in the book.  While I did disagree with the premise, and I’m not sure how applicable many of the concepts will be to most people, I do think it’s valuable and worthwhile especially if you’re working online, working for yourself, or would like to.

Why You Shouldn’t Follow The Herd

It’s been a while since my last post.  I’ve been very busy with a combination of work and travel, but things should slow down for a while now and I’ll have more time to post more frequently again.  I picked up a Time magazine in an airport a few days ago, with a few interesting interviews.  One was with Apple’s new CEO, Tim Cook.  In it he said:

I’ve never thought going the way of the herd was a particularly good strategy.  You can be assured to be at best middle of the pack if you do that.  And that’s at best.

Outstanding advice.  It’s advice that all of us should keep in mind.  And it applies to both business and life.

I’ve been pretty good about not following the herd.  But when I started working online back in 2005, knowing very little about making websites, selling online, and building traffic, I initially copied what everyone else was doing.  It was a costly mistake, and I quickly learned my lesson.  I started putting it this way: Just because everyone else is doing something doesn’t mean it’s worth doing.  That may be obvious to most people reading this blog…in life…but it’s sometimes harder to see in business.  It’s tempting to think that if the competition has been doing something for months or years, it must be working.  However that’s not always the case, strange as it may be.

Burning Money

When I first started my e-commerce site, like every site when it’s new, I had no traffic.  SEO was going to take some time, but I needed to make money.  So I went to PPC.  I looked at the terms my competitors were bidding on…the terms that nearly all of them were bidding on…and figured those must be the good terms.  So I chose those terms and wrote similar ads.  And I started losing money.

It was near the busiest time of the year for my industry, so I figured it’s got to pick up.  The fact that I was spending more than I was making with PPC (on a credit card of course), was going to reverse itself.  Otherwise, why would everyone else who has been around for years be doing it?  So I kept it up.  As traffic picked up, my losses started increasing too.  I was spending near $2,000/day on PPC.  Sometimes I’d make about that much in pre-PPC profits…and break even.  But most days I’d loose a couple hundred dollars.  I just kept thinking…everyone else is doing it…these visitors are going to come back and buy.  It will work!

But it didn’t.  At the end of my first busy season I had lost $10,000.  And that was a lot of money to me.  Soon after I found out one of our competitors, a wholesaler who decided to go online and sell retail, went out of business because they had outsourced their PPC management and the company drove them into the ground.

Just because everyone else was doing it didn’t mean it was a good thing.  In the last 8 years I’ve adjusted my PPC campaign so it is profitable.  But I don’t bid on the same terms most of my competition still bids on.  Occasionally I do give them a go again, just to make sure I’m not missing something.  And every time I try it, I lose money on those terms.  Yet, my competition is still doing it month after month, year after year.

Free Shipping

Free shipping is another great example in my niche.  Everyone offers it.  A number of people have told us we need to be offering it.  But it’s a losing proposition.  I know, because I’ve tested it several times.  Free shipping increases the number of orders we receive by a little bit.  But the increase in orders is more than offset by the decrease in profits due to the cost of shipping.  I’ve tried adding average shipping costs to the price of products…and that just decreases orders due to the higher prices.

So many people think free shipping is a necessity.  But a customer first sees the price of a product.  In my experience, if you’ve got the better price (since you don’t have to add shipping to the cost of an item) you’re going to get more sales than if you had a higher price + free shipping.

It may be different in different niches and for different product types.  But the point is, you should never just run with the herd.  You should at least test what you’re doing to make sure it works for you.

Get Away From The Herd

Tim Cook said the best you can do if you run with the herd is to end up in the middle of the pack.  If there’s an existing herd before you get in the game, then you’re not the leader…by default.  If you don’t end up running behind, eating a combination of dust and crumbs, you’ll likely end up getting trampled, or spend half your time fighting in a crowded, unpleasant place.

The key is to get away from the herd.  Blaze your own path.  Do something different.  If it’s valuable and useful to enough people, and you do a good job promoting it, your chances are far higher than attempting to run with the herd.

Markets Are Brutal

My degree is in marketing, but I took a number of economics courses in college as part of the curriculum. We were taught that free markets are characterized by level playing fields, equal opportunity, and that people make rational choices based on their own best interest. Even then, I wondered if economists had ever actually run a business, participated in the free market, or associated with real human beings. Now that I’ve been running businesses of my own for the last 15 years, I know that most have not.

There’s one thing you need to know about markets, above all else, if you’re going to start a business (online or off): markets are brutal. Free markets aren’t characterized by level playing fields or equal opportunity. They’re characterized by survival of the fittest. In the free market, advantage almost always goes to those with the most money and power. There is opportunity for all, and ideas do matter. But it’s very heavily skewed in favor of entrenched players. For the little guy, an uphill battle is often fought against the big guy running downhill.

Markets vs. Government

I was having an email conversation with someone who said the choice between Obama and Romney is a choice based on one’s faith in either government or the market. He said more or less, if you’ve got more faith in government, Obama is your man. If you’ve got more faith in the free market, Romney is your man.

I don’t have faith in anything, much less government or the free market. But I do know that markets don’t care. Markets don’t care if a kid’s parents don’t have enough money to buy him an education. Markets don’t care if you get sick and don’t have money or insurance. And they don’t care if you were born in a poor, uneducated family. In the survival-of-the-fittest nature of markets, if you’re not born in the right family, right place, and right time, the odds are against you. Markets don’t give a shit.

In the free market, money and power rule. Those with the most money and power control the game and how it’s played. At least in theory, in a democratic society, government is controlled equally by all people, regardless of money or power. One person, one vote. Of course that’s not exactly how it works in reality. Those with money and power buy control of government, too. But governments are different. Governments do care. They do provide education (poor as it often may be) that the markets will not…for those with little to no money. They do provide health care and food for those where markets would not. And so on.

The free market is brutally competitive. People and companies will step on you, steel your ideas, and rip you off. If you list your products for sale on Amazon for example, they’ll use your data to see what’s selling, go direct to the source and sell as your competitor, then undercut your prices and sell at a loss just to drive you out of business. And when you’re gone, they’ll bring the prices right back up to where you were selling.

I’ve got a GoPro Camera and love it. What a great idea. The other day I went to an electronics store and saw two knock offs that looked exactly the same other than having one button in a different place and a different brand name. The free market doesn’t give a shit.

Only a person who has never actually participated in the market would want society to be governed by market forces. Survival of the fittest is anarchy.

David vs. Goliath

There is a way for small players to win in a market often dominated by big brands. The tagline for this site, “nibble your way to the top”, hints at it. Small players are more mobile, can usually move quicker, and adapt quicker. Small players can keep their expenses down and minimize risk in a way that big players can’t. With low expenses and high flexibility, we can move from one thing to the next as doors open and close around us. But most people won’t do this. Most small businesses will fail quickly.

Sun Tzu says you need to know your enemy and yourself, and you need to know the terrain. The playing field isn’t level. It’s massively slanted. But there are some paths that aren’t blocked by the big guys, and those are the paths you need to find. It’s easier to run past Goliath and let some other David fight him while you continue running further and further towards the top.

If you work hard and get lucky you may be able to get so far up that field that you end up in a rich-get-richer re-enforcing circle. Just remember what it took to get there, the people that helped you along the way, and those who can’t get there, too. If you do get to the point of massive scale and riches, you won’t be earning your money anymore. Others will be helping to earn it for you. No one does it alone.

How a Panda Penalty and 60% Traffic Drop Nearly Doubled Our Sales

A while back I posted about my e-commerce site recovering from Panda. In that post I mentioned that the site suffered a 60% drop in traffic. What I didn’t mention is that despite the massive drop in traffic our sales nearly doubled that year (2011). We didn’t expect it, and it wasn’t directly due to the change in traffic. The sales increase was caused by our efforts to increase our conversion rate to offset the traffic loss.

Here’s How We Did It

We read a book called The E-Myth Revisited. If you’re running a website or business, I very highly recommend reading it. Some aspects of the book come across as rather elementary, and there were sections that could have been left out. However, the substance of the book was excellent, and it caused us to change the way we looked at and ran our business, including our e-commerce site. I’ll only describe here what applies to our increase in conversions and sales, but there are other great and beneficial reasons to read the book.

Although customers loved our site and it had a very professional design, we had never put an overall vision for it into words. It was really just a site selling products, along with useful information for our customers + excellent customer service. One of the steps in “The E-Myth Revisited” is to write down a vision for your business…what you want your business or site to convey…what you want people to feel when they land on your site for the first time or walk in your door.

A Unified Vision

Actually coming up with a single sentence for our vision wasn’t easy, but once we did it we felt we had a real purpose. We had a single goal or vision that every page on the site should attempt to achieve…a single unified feeling for every aspect of the site. So we got to work on making that happen. We made relatively simple changes to the design…a color here…a message there. But the impact was amazing. The day we made the first changes, our bounce rate was cut in half and average time on site nearly doubled. Conversions more than doubled, and sales went up by almost 100% for the year.

So despite losing 60% of our traffic from Feb. to the end of the year due to Panda, our sales were about doubled compared to the previous year. And it wasn’t due to a change in search traffic or the terms people searched for to arrive on our site. The data was consistent across all traffic sources…not only Google, but also Yahoo and Bing where we had not been penalized.

One Change, Not Many

In every previous year we attempted to maximize our sales and conversion rate. We made numerous changes to every element of our site, but each one either had very little impact or none at all. It wasn’t until we changed one thing that we saw a huge and instant impact…the vision. And that vision was based on feeling instead of product specs or direct benefits.

Why Feeling Beats Logic

When a customer arrives on your site, they’re going to instantly feel a certain way about it. If they’re looking to purchase something, they may very well decide to make that purchase or not within a couple of seconds, without even having read anything about your products. Most of them will use thinking and logic after, to support the decision they’ve already made based on how they feel about your business.

What’s more important than anything else, is that your website conveys a feeling that puts your customer in the mood to do whatever it is you want them to do.

Product specifications, direct and indirect benefits, price, etc…it all matters.  But it’s all secondary to the way someone feels when they land on your web page. If they don’t get a good feeling, if you don’t put them in the mood to buy, it doesn’t matter how good your product or sales copy is…most customers aren’t going to buy from you.

This year we focused on reducing the amount of product specification and benefit language in our marketing, and focused instead on the feeling people will have when they use our products. And our conversions are up nearly 30% over last year.

For us, getting hit by Panda and losing 60% of our traffic caused us to try to improve the aspects of our business we could improve. And it worked, extremely well. Whether your site has been penalized or not, make sure you’ve got a written vision based on what you want your customers to feel, and make every page of your site convey that feeling. You’ll be glad you did.

A Final Note

Despite our substantial increase in visitor engagement signals, our e-commerce site was hit again by Panda 20 (what most SEOs are calling the latest one) after having recovered this past March from Panda 1.0. This is yet another indication to me that Panda is not primarily concerned with what’s good for visitors. Our bounce rate is just under 20%, with ~6 pages viewed per visitor, and just over a 4 minute time-on-site average. This highlights the need for multiple traffic sources and promotional methods even for high quality businesses, in addition to keeping fixed expenses as low as possible.