This is the first installment this year of our Deep Dive Into Local series covering the week ending Monday, January 16th. In our Deep Dive series we take a closer look at one thing in local that caught our attention over the previous week. It was published first in the Local U Forum (paywall).
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This week's Deep Dive with Mike and Mary looks at the data behind a discussion between by Mike Blumenthal and David Mihm for StreetFight magazine about KPIs and local. Mike and Mary dig into the details of the case study for a single location and ask the questions: What are the critical KPI's for a location-based business? How can you measure conversion? Where do new customers come from?
Mike: Welcome to this week's Deep Dive with Mike and Mary. I think this week we're going to take a look at an article I wrote with David Mihm at StreetFight magazine about KPIs and local; take a look at some of the research I did and a case study, and discuss how this should really be impacting local search campaigns at the highest level.
David and I wrote an article last Monday at Search Engine Land [sic: at StreetFight] where we looked at some research that I've been doing on KPIs. From my point of view, most bricks-and-mortar businesses don't have a great tool to measure final conversion. A few do that are automated. For example, PatientPop in the medical field is tracking conversions right through to the appointment, which is a great, you know, final KPI. Restaurants can track through Open Table and reservation. But most businesses are stuck with a big disconnect between what goes on in their business and what goes on online, and how do you create a closer connection between those two?
I did a case study and looked at all of the information I had access to for that business at Facebook, at Bing, at Yext, at Yelp, at Google as to identifiable KPIs that were important or that were close to a conversion. I identified four attributes:
A contact through the form on her website.
A Facebook message. I had to read three months' worth of Facebook messages -- gag me with a spoon -- to indicate, intent to come in.
Clicks to call at Bing, Google, Yelp, website -- on her website I am tracking clicks to call.
And requests for driving directions at Yext, and Bing, and the YPs through Yext and through the website, through Google, Yelp, etc.
And it was interesting. We came up with roughly 400 data points. Let me share that screen with you now. From what we found, 58% of the data points were requests for driving directions, which is a great KPI, because it really indicates strong intent. Three percent were either contact form on the website or a Facebook message. And 39% were click to calls. We then went further & analyzed where those came from. One percent came directly from Facebook. Four percent came from Yelp. Seventy percent came from Google directly. In other words, people acting on the Google listing in search or maps, or within an app. And 25% came from the website.
Mary: So this is people that actually...the first group...the blue part, does that include the 25% who came directly from the website?
Mike: No, no.
Mary: No. The blue one is directly from Google, and then the orange one is they went to the website. Okay.
Mike: Right. So then I further analyzed this segment, the website segment, and said, "Okay. Of those, where did those website users that took an action on the website, where did they come from?" And here's what I found. A number of those, 3%, came from Facebook, so put Facebook ahead of Yelp on a pre-sale new customer basis. Not that Facebook isn't incredibly important to this account, it is, but it's mostly for bringing existing customers back in. And Google, obviously, which gives Facebook real important value. Some small but growing segment of pre-sale contacts. Yelp, a smaller segment of pre-sale, probably mostly through Apple. And then Google, taking the lion's share of all these through either organic deliveries to the website or directly from Google GMB.
Now, we further then did an analysis in-store, and we surveyed every new customer that came in the door. And this business was running a billboard campaign for roughly $10,000 for the quarter -- I'm sorry, running a radio campaign that was $10,000, a billboard campaign is about $3,500, running yellow pages, about $1,500 for the quarter, running some Google organic stuff at around $1,200, and some low-level Google pay-per-click for about $300, and spending maybe $200 a quarter in Facebook, boosting stuff in Facebook, so Facebook was very inexpensive -- one of the better returns in pre-sale, although Google was the best.
And what we found was interesting. Two percent came from the yellow pages, and they were mostly...of the new purchases, in other words, the real conversion at the end of this funnel. Two percent of all new customers came from the yellow pages. Mostly inexpensive, cheap sales. Four percent came from the radio ad. Mostly middle-aged men looking to buy gifts for their wife, prior to Christmas, drive time, hadn't bought a gift yet, Barbara comes on the radio, everything clicks, they get their shit together, and they buy a present. And 2% from the billboard. And 2%, people couldn't identify where they came from.
So, in total, about 10% came directly from advertising. Thirty-three percent came from word of mouth, direct word, person-to-person word of mouth. And the other 55% give or take, or 52%, whatever it is, maybe it was 8% came from advertising, came from when she queried, they would say, "Reviews." Fifty-two percent, so, which I view as online word of mouth. Right, so 33% came from P2P, person-to-person, 52% came from reviews online. And when she would query, she'd ask, "Well, where did you read the reviews?" And they would say, "I don't know. We read them on the internet," right? And those typically turned out to be...the 33% typically turned out to be a little better well-heeled, older client, and the 53% turned out to be her younger clients, millennials, buying engagement rings and getting started in the jewelry market.
So, in this case, advertising doesn't work as well. Clearly, the bulk in this case of her business was coming from Google, and coming in the form of referrals through reviews. So what we found was, of these KPIs that we measured, the click to calls, the request for driving directions, the contact forms and the Facebook fills, they resulted in about a four to one conversion. In other words, one out of every four converted to a sale. Now, what we didn't do in that survey was track the value of those sales, so it's a little hard to ascribe ROI to the other advertising methods, but it was very illustrative to me just to understand that such a big percentage of people function on word of mouth, either digitally in the form of reviews, or directly.
Mary: Yeah, that's kind of interesting, because Google figured this out a long time ago. It's just taken them a while to get the algorithm up to snuff, so that it's looking at the real deal. As Mike mentioned, we're in Nashville this week with a Jacuzzi Dealers Conference, Jacuzzi and Sundance Spas. And we are presenting directly to business owners, we only had a certain amount of time, so we really tried to key in on things that they could do themselves that were very understandable, that made sense to them, and ... you know, spending our time concentrating on teaching them those things.
And it was specifically about ways to build your brand in your own community, what you look like on Google, what your visibility is, what your local knowledge panel says about you, and also a pretty deep dive on how you can start a culture of reviews, a culture of continual improvement in your business, based on customer feedback. And when you get down to it, I truly believe that if small business owners can get good at those three things, that they can really thrive online. And they can do those without people like me and Mike.
Mike: Well, the part of the problem with that, doing it without us, is that they don't know where to focus. That's the issue. And what we helped with yesterday was helping them to understand that if 90% of their business, pre-sale business, not post-sale, not, you know, referrals, but pre-sale business is coming from Google, then they need to focus on that search result, where they are seen, like their knowledge panel, and make sure that they can make that as reflective of their quality, decency and good service as possible. And I think a lot of people didn't put those two things together.
So when we looked at these knowledge panels in this industry, the pictures were lame, the review corpus was lame. There might be a few reviews at Google and no place else. Their presence and their presentation on Google was dramatically lacking, and it's a fairly trivial and understandable thing to improve, right? But, to get reviews, you also have to be good; and you have to be caring and understanding what your customers think, and fixing those things that aren't working quite right. So it is, as you said, a more traditional view, but just understanding where they need to project differently to succeed at this.
Mary: Yeah. And when we were talking about brand building, we talked about concentrating your marketing among the people that have the potential to become your customers. And as Mike and I were talking a few days ago, sometimes the rankings, people want rankings totally for vanity purposes. They wanna be able to say, "I'm number one for this." And I've even had clients come to me and that's all they wanted, to be number one for one specific term. Not that that really would make their business better at all, but it was totally a vanity thing that they wanted to beat their competitors.
Mike: "Best OBGYN in Santa Monica, California. I say I'm best, therefore I should rank for it."
Mary: Yeah. And one of the things we were talking about in our workshop sessions is how you're probably already doing things. Most businesses are probably already doing things that they should be earning some online recognition for, and they're not getting it. For example, we had one couple that sponsored a senior hockey league, and another business group in town. And you know, the hockey league didn't even have a website, but once we started talking about it, they realized, "Oh, well, maybe the Facebook page which acts as the website for this particular hockey league should recognize us online."
So you just need to keep thinking about how to combine these offline things and online things together in your community, because that's what's going to give you location prominence. Doing the things you would've done to build your brand before the internet, you still wanna do those things, and you wanna translate them onto the internet and have them work in conjunction with what you're doing on the internet.
Mike: And understand that you have to look good everywhere, because you never...Google is viewing your data as their data, and that you don't know where that data's going to be seen. Could be seen at Google, could be seen at Yelp, could be seen at Facebook. You have to look good and be good every place, right?
Mike: Because that data's now...you know...all you can do is get attribution. You can't, you know, give attribution. You may not get the visit. But you have to look good everywhere, because everybody's going to take that data and use it as they will, so...All right. Well, I wanna remind you not to forget the end of the month. We are, Mary, I, Darren, Aaron, Mike Ramsey, Cindy Crum, are going to be doing a Local U Advanced Workshop in conjunction with MozCon Local February 27-28. Tickets are available now. You can save $490 if you are a Local U Forum member or a Moz Forum member. We hope to see you there soon. Anything else, Mary?
Mary: That'll do it. Thanks.
Mike: With that, we'll say goodbye from Nashville. And next week, we'll be back to Glenwood Springs and Olean, New York. Thanks. Thanks again.
Mary: Bye from Nashville.