At Marchex, we specialize in digital advertising solutions for small businesses. Over the years, we have learned a lot about the needs of our small business customers and we’ve spent a significant amount of time monitoring and measuring how changing digital advertising trends and consumer adoption of new devices, like smartphones, impact the way small businesses sell products and services.

Today, the proliferation of smartphones and mobile devices provide consumers with immediate access to business information no matter where they are in relation to their needs.

Whether it’s a coffee shop within walking distance or a car repair business several miles away – or anything in between – consumers use their mobile devices to search for relevant business information and easily place a call for more details.

Timeliness of information makes the mobile audience ripe with intent to buy, and small businesses need to learn how to best reach this audience and optimize their advertising spend to drive better return on investment.

Small business customers often search for business listings and then call for directions, hours of operation, product or service availability, reservations, pricing and more. Odds are you don’t know if your callers came in from a search engine, or other online referral source such as local listings or location-based mobile applications.

But, chances are high that you are measuring click through rates or form fill responses from these digital advertising placements. If so, that’s fantastic! But, you might be missing out on a big chunk of your ROI story: Offline conversions that are driven though online campaigns.

To further elaborate on this point, I’d like to share a real-world example from which we can all learn.

A home services business with several local locations needed to understand exactly how much traffic their search campaigns drove in the form of phone calls.

Despite custom SEO and search engine marketing strategies developed by a search consultancy, the home services business received a minimal amount of form fill outs from its website, and needed to determine if search marketing was still a viable and cost-effective lead generation tool.

Although the business was seeing a strong uptick in phone calls, the increase in calls could not be directly attributed to its online campaigns. Since phone calls are critical to this business’s success, there was a desire to know for sure how the calls were being generated.

Tracking offline conversions from search campaigns is more cumbersome than measuring clicks, but it also tells a bigger, more powerful story about the end-to-end impact of search campaigns and helps small businesses better manage their budgets.

Tracking Offline Conversions In A Cost-Effective Manner

After scouring the market for a way to easily, cost-effectively, and accurately attribute search engine marketing campaigns to offline phone calls, the home services business selected a call analytics solution. The  technology allowed the business to assign unique call tracking numbers to each of its search marketing campaigns, landing pages, and local websites as well as leverage an easy to use call analytics system to measure results.

Contrary to what you might think, a call tracking and analytics program can be affordable for businesses of all sizes, and especially for local businesses, it can pay dividends in terms of the type of information provided.

It didn’t take long to determine that a majority of search-driven website visitors picked up the phone for more information instead of filling out the online form. The business was able to understand which search engines and keywords drove more calls and whether callers discovered the home services locations through paid or organic listings.

This level of detail proved to be especially helpful for this business, which, like many small and local businesses, relies heavily on cost-effective direct response advertising to drive leads. If you understand exactly where the traffic comes from, and how that traffic turns into calls, then optimizing for best results across your online marketing campaigns becomes much easier and more effective.

Actionable Results

After monitoring campaign data for six months, a clear, consistent trend emerged: On average, 71% of the home services business’s search engine-generated conversions came in over the telephone versus only 29% from the online form. That’s a pretty big delta, and it’s proof that using a call tracking and analytics solution is well worth the effort.

In fact, call tracking and analytics brought a level of clarity to this business that led them to realize their search marketing return on investment was significantly higher than first thought. And, they determined they were under bidding on top-performing keywords.

By gradually increasing their bid prices until they reached a sweet spot in bid/conversion return on investment, the advertiser was able to achieve a 100% improvement in lead totals.

Bottom Line Impact

With call tracking and analytics this local business experienced exceptional results.

• It was discovered that a full 85% of search engine-generated conversions came in via phone, and only 15% came in via the online form – a key learning that allowed the advertiser to maximize exposure with its allotted online marketing budget.
• The number of search engine-generated leads more than doubled year-over-year.
• The number of traceable leads delivered increased a whopping 100% after the business began using call tracking and analytics software.

The Moral Of The Story

Clicks and website activity don’t tell the whole story when it comes to search engine marketing for small and local businesses. You don’t have to be a large corporation with a large budget to benefit from a call tracking and analytics solution.

In fact, if you’re not tracking the impact of your search engine marketing efforts past the click, you could be missing out on a significant source of leads and conversions.

If you’re a dentist in Boston looking for local sites, you could look at the listings of other Boston businesses, such as Boston Standard Plumbing:

Further, considering the ongoing changes to search engine algorithms (e.g., Google’s recent “Panda Update”) and the big impact these changes can have on a business’s ranking, it is imperative that small businesses take a thoughtful approach to their SEO strategy.

Here are some simple SEO techniques any small business can do today to boost its search engine rankings:

1. Ensure the technical setup of your website is search engine friendly

Most platform hosted websites do this naturally already, but if you have a custom built website you need to think about your folder structure, site map, and HTML readability.

Most website designers spend lots of time making the graphics layout look visually appealing to their human audience, but you also must remember that search engines look at your site through a very technical lens.

There’s no “style points” here!  If your site is heavy on Flash, make sure there’s a text based description that lives in the HTML to help clue in the search bots. Consider removing your splash or welcome page, and instead build a homepage with descriptions and pointers to the main content areas of your site.

2. Make a list of keywords you want your website to appear for

Without thinking about it too much*, jot down the three or four ways you’d search for your website if you had to find it quickly. Ask your friends and family members the same question and tabulate the results. Chances are there will be some overlap, and you’ll quickly see which terms are more likely to be searched on first.

Next, run the searches yourself, and for each query try to find what position your website has in the results and jot it down. Stop if you can’t find it after ten pages. If you can find it by then, don’t expect anyone else to either!

If you can, also take note of the other sites that come up on the results of the first page for each query.  Are they similar to yours? Local or national? Are they competitive to your business?

When picking your top keywords, it’s important to be honest about how competitive certain terms might be.  You must assume that others will try to keep their site listed high in the search results as well.

See if you can break the list into three buckets:

• Lower rank, great term, low competition  - This is the perfect place to start.  Put these terms at the top of your priority list. You should see the best results on this set first.
• Lower rank, great term, high competition – Another great opportunity (as evidenced by your competition), but unless you feel you have to take them on directly, it could be more costly in the long run to start here unless you have a higher performing base of keywords.
• Higher rank, great term – The good news is that you’re already doing awesome here, but you should continue to track performance just in case. You can always come back to this group later if you’re still not satisfied with the results.

By this time, you should have two or three keywords that are at the top of your priority list.

3. Ensure your homepage contains a text description with 2 or 3 of those top keywords

This is where we start crossing over to the artful/creative side of the process. The goal of this step is simply stated: “If you want someone to find your website by searching for these terms, where do you have them listed on your website for the search engines to find them?”

For small business sites, they typically have one main page. Make sure you add a couple sentences that naturally describe your business, and weave in your top three keywords somehow. To gauge success of these keywords, keep an eye on your site ranking to see if there is movement.

4. Write a page or blog post on your site that’s dedicated to each of your top keywords

This is also a good way to show your customers you know all about the product or service they’re interested in. Picture yourself explaining to a friend or relative in five minutes what you do in that specific area.

The write up doesn’t have to be more than 200 – 300 words and should list the target keywords no more than two or three times. Remember this should be as natural and easy to read as possible, but have the keywords mentioned in a way that makes sense.

5. Post links to your site and/or key pages on social sites like Facebook & Twitter

Once you have these blog posts or articles on your site, it’s ok to post them out on the web. Start with the social sites as these offer the easiest access and contacts.

Search engines are starting to crawl and track these links back to your site, plus it’s an easy way to get your friends and top customers involved. Seems like everyone has a Facebook page these days!

6. Ask friends or contacts to post something about you on their website

Ideally, they can use one of the keywords on your list and highlight them as a link to your page. Traditionally, this is may also be known as a “link exchange” and although sometimes frowned upon when done in large quantities, it’s a great above-board practice for genuine websites with original content. But the link should be relevant and provide actual value to the reader.In other words, the link must be “contextual.”

The search engines tend to favor sites with more external links pointing to them from a variety of sources over websites with few or no backlinks. A simple way to view this is that search engines view relevant links to a website as a “vote of confidence.”

*Editors Note: This is a simple first step to looking at keyword selection, more specific tips and advice can be found here, and will be addressed in future articles on small business SEO.

A Harvard Business Review study demonstrated that recovering only five percent of abandoning customers could increase profitability by 30 to 85 percent.

Recently, Marchex asked several hundred small businesses in a customer survey what was most important, and “keeping existing customers” was on top (46%) followed by “getting new customers” (26%).

The importance of customer loyalty isn’t a new concept for small businesses, but understanding what loyalty means in this digital age is a new imperative.

Small businesses have to understand how quickly consumers are shifting their conversations and other social actions to the online world. The adoption of social sites such as Foursquare, Yelp, Citysearch, Twitter, Facebook and blogs is growing at a rapid rate.

Turn Customers Into Your Best Advertising

Soaring usage of social media is creating an interesting dynamic in the marketplace by creating a dramatic shift in power to the customer. No longer does a loyal customer simply represent a repeat purchase or occasional referral business. Customers now have the ability to broadcast sentiment about the businesses they visit and services they use to thousands of people instantly.

This means loyal customers are a small business’s de facto marketing department. Due to the emergence and adoption of social media, customers now have the ability to generate new business, craft a brand image, and inspire loyalty through tweeting, blogging, reviewing, following, and so forth. Given a small business’ limited time and resources, this can be a highly valuable asset if managed appropriately.

Maintaining good relationships with customers has reached a whole new level of importance in the digital age. A small business’ loyal customers will generate “online word of mouth” with positive reviews, mentions, and by broadcasting a visit on Foursquare.

With very little effort and access to the appropriate digital tools, loyal customers can be mobilized to ignite referrals, generate positive air cover, shift opinions, and help soften the impact of bad reviews.

So, what should a small business owner or operator do to manage the complexity of customer loyalty in an online social world? First, take a deep breath, relax, and then start participating.

Here are three suggestions to get the social ball rolling:

1.  Listen To The Conversation

A small business can’t truly understand how to engage customers—especially their best customers—if they don’t know what their customers care about. Review sites, blogs and other social channels are a goldmine of valuable information. Customers now have the platform to tell a business exactly what to do to succeed, but first the business needs to hear and make sense out of all the chatter.

Effectively monitoring the chatter means scouring the online landscape for relevant dialogue and that can be time consuming. However, there are several online products like Marchex Reputation Management, which can aggregate customer conversations across the Internet and make it available all in one place with simple, yet invaluable insights and analysis.

2.  Get Social

Once comfortable observing and understanding what customers are saying online, small businesses should dip their own toes in social media. Like it or not, small businesses need to be on the same social sites their customers use.

Social is not nearly as scary as one might think. In fact, after opening a Twitter account, Facebook page, Foursquare and Groupon memberships, small business owners may in fact discover that social is a lot of fun!

3.  Engage Customers

Lastly, it is important to actively participate and communicate with customers (e.g., respond to a bad review, broadcast or thank a customer for a good one, ask for reviews and more). This is a great opportunity to engage the best customers who are active online by getting them to do more.

This could include things such as rewarding them for referrals or sending them bits of interesting information they can broadcast like new menu items, upcoming sales and holiday discounts.

However, communicating with customers can be challenging given the limited time and resources of a small business. Many will inevitably find that effectively managing social media and the dialogue with customers takes some time and a little trial and error. And, that’s okay!

There are affordable online products and services emerging, both self-serve or managed, that aggregate and simplify the engagement process for small businesses. These products are quickly becoming an essential addition to a small business’ marketing toolkit.

The bottom line: Like it or not, online conversations are happening and continue to increase in volume. The good news is that this trend presents small businesses with a fantastic opportunity to listen to, learn from, and engage with their customers on a scale never before possible. It’s a brand new way to drive customer loyalty.

Core to this discussion was the rapid adoption of social media and mobile Internet-enabled devices, and how these trends are being leveraged by businesses both large and small, to reach and build relationships with customers.

In addition to attending the conference, I had the opportunity to present how small businesses can  improve their bottom line by capturing and analyzing what customers are saying over the telephone using call analytics and call mining.

Why are telephone calls so important? Ask small businesses, who rate phone calls as their most valuable lead source 65% of the time according to a study published by Kelsey/BIA.

Call analytics provides a small business with unique local or toll-free numbers to embed in their (search) advertising campaigns that measure the number of calls generated by each advertisement or listing, across online, offline and mobile.

For example, an advertiser may decide to create and embed a unique phone number for their Facebook Fan Page, Google Places and Microsoft adCenter campaigns to track the effectiveness of each media channel. This empowers the small business advertiser to quickly measure their online advertising spend against the metric (calls) they care most about.

Let’s take American Financial Network, a regional mortgage bank. Like many small businesses, they generate most of their revenue over-the-phone. In addition, given the size of the average mortgage transaction, a missed or mishandled called can significantly impact revenue.

American Financial Network recognized this, and implemented call analytics to quickly and easily listen to every phone call and respond to any missed or mishandled calls.

In addition, they began to look at where their customers were calling from (by reviewing area code data) and started changing their media mix to address underserved and/or high-performing regions. The impact? Average daily revenue increased 30% with just these changes. To me, this example is at the core of the connection between customer service and marketing.

Call mining takes this concept a step further and is particularly valuable for small businesses that do not have the time or resources to listen to every call. Call mining uses software to take recorded conversations, transcribe them, and provides marketers with the ability to extract key insights through a search application.

These insights are then leveraged to adjust media spend, perfect advertising messaging, and train customer service and sales representatives to better serve customers.

Think about how powerful this tool is to a small business. What if you owned or were responsible for the marketing (often one in the same) of a local home services business? Wouldn’t you want to have insight into how your business and its representatives interacted with customers? While many small businesses have access to their call data, it is simply too time consuming to analyze it all.

Call mining empowers a small business to access its recorded phone conversations with great ease, allowing calls to be filtered, sorted, and prioritized based on topics that are most important to the business so patterns and trending topics can be quickly identified. Armed with this information, a small business can improve its customer facing communications by better addressing its customers’ needs and concerns.

So listen up, small businesses. Call analytics coupled with call mining could be a simple way to understand what your customers are saying and improve your customer communications in search marketing channels and beyond.

However, Google does have quite a few Facebook pages in its index – a quick search suggests as many as 2.6 billion:

When you check out Google Place Pages for small businesses, you do find many references to Facebook. Here’s an example of a plumber in Boston with a Facebook citation on his Place Page:

The fact that there is a Facebook citation here does not necessarily mean that Google crawled Facebook. However, since this Place Page is not ‘owner verified’ we can assume it was not manually entered by the business owner.

We thought it would be interesting to see how many NY businesses have links to Facebook from their Google Place Page. Out of the 500,000+ businesses we looked at, the average we found was slightly over 2% – and virtually all of the business categories were in the single-digit percentages.

What’s surprising is the discrepancy between the figures we found and the figures quoted by other surveys. For example, BIA Kelsey’s study found that 32% of SMBs use social sites like Facebook, USA Today quoted more than 1 million SMBs have Facebook profiles, and Fox Small Business Center published a survey that found 63% of SMBs rely on Facebook.

This raises a few questions: how many small businesses really are on Facebook?

If, for example, Kelsey got it right and 32% is a fair number, then why does Google show such a small percentage? This could be for a number of reasons, given the tense relations between these two Internet giants. Thoughts?

However, with new tools that engage SMBs in monitoring their advertising performance, I expect SEM agency churn will likely subside in 2011 and retention levels will normalize.

The Churn Challenge For Small Businesses

Part of the SEM churn challenge is that SMBs typically wear multiple hats and rarely have someone dedicated to marketing or advertising. SEMs provide metrics-based reports but they don’t elicit much attention or engagement, and even the SMBs who do look at reports either don’t review them often enough, don’t understand how to interpret the data or don’t know which changes to make in their programs to effectively address the issues.

Essentially, SEM firms need to better leverage performance metrics in a way that speaks to SMB pain points. Thankfully, new tools are making that easier. Phone calls are a currency that SMBs understand and recent developments enabling SEMs to offer actual caller dialogue through automated transcriptions has even increased the value of a call to an advertiser.

With tools to evaluate the keywords spoken, as well as caller sentiment and purchase intent, the local search industry has an opportunity to leverage this data for more comprehensive consumer data and program insights.

SEMs that are looking at new ways to integrate call and click metrics with social media and reputation management tracking tools will finally realize a tipping point on churn.

The Future Is In An Integrated Reporting Platform

With an integrated reporting platform – including calls, clicks, social, reputation and more – SMBs can see a collective and comprehensive view of customer and market intelligence and gauge advertising performance. This data can then be used to optimize their overall marketing program and drive operational efficiencies.

While the reporting platform of choice will continue to evolve, reporting on consumer dialogue and sentiment of actual calls in an integrated format will remain mainstays for SMBs and SEMs.

This will make it easier for SMBs to engage in the program and provides a more holistic view for search marketers to better counsel advertisers on program changes and program growth-with the potential for value-add revenue opportunities.

For example, consider the following scenarios:

• Call chatter and online dialogue requesting discounts rise, so the SEM recommends that its SMB advertiser engage with a deals company to promote a special deal. They move forward and announce it through social media channels and see inquiries rise.
• Online reviews and caller sentiment reveal negative customer experiences, so the merchant trains its customer service professionals on new procedures and situational best practices.
• Consumer call transcriptions are evaluated for keywords and a relevant, new keyword term makes the top 5-10 words spoken. The SEM adjusts the keywords and the merchant modifies the ad creative to leverage new consumer interests.

Engaging SMBs: Make it Easy

At the end of the day, the keys to engaging SMBs are to show value and make it easy. Don’t bog them down with too much data but build a business case for a new initiative with numbers that speak for themselves.

Search marketers must make recommendations for optimizing search budgets and give SMBs enough data and performance metrics to enable them to make smart business decisions.

With new tools that demonstrate concrete SEM value, SEMs can use insightful customer intelligence to help connect with SMBs for the long term.

SMBs will value the SEM agency that helps them maximize their search advertising dollars, and the SEMs that do so will help make alarming churn statistics a thing of the past.

For example, if you’re a plumber in Boston looking for local sites to post your business listing on, you could look at the listings of other Boston businesses, by running a query for “Boston Plumbing” to find other local sites:

If you want to find vertical sites, you could look at the listings of other dentists, such as Tribeca Dental Associates in New York:

Even better, you would want to look at businesses that are in both your locale and your vertical, such as Charles River Dental Associates in Boston:

Finding local and vertical sites this way is a tedious process because you have to go through many businesses one by one. An alternative is to use an online tool that automatically aggregates all the sites where your competitors are listed.

But with all of these approaches, you end up seeing the large, plain vanilla sites like Yelp, CitySearch and SuperPages. Whether you’re a dentist, florist or plumber, and whether you’re in Boston, Chicago or Chico, these generic sites aren’t necessarily the right ones for you to be listed on.

Not Just Hyperlocal, Hyper-Relevant

It could be that in order to rank high on Google Maps, you need to be on a hyperlocal site or the hyper vertical site that is ‘hyper relevant’ for your type of business! Otherwise you may be lost under the big nationwide, multi-category sites that just list all 15M US businesses.

To get a better understanding, we ran an analysis of 3 million SMB’s in multiple verticals and locations, and used that data to look at just the vertical sites and just the local sites – and found some interesting things. Here is an example of what we found for Faneuil Hall Dental Associates, a Boston dentist.

These are the nationwide sites for their business category, which include both the big sites like Google and more relevant sites such as healthgrades.com and wellness.com (vertical sites are marked by and multi-category sites are marked by ):

Below are the local sites where they should be listed. Some of these smaller local sites one might never think of (such as nomoreclipboard.com or clinicwalk.com) but Google thinks they are important:

It’s clear that the plain vanilla sites are not the only ones you need to be listed on – equally as important are the smaller, simple sites that Google finds to be important for your business category. What’s important for SMB’s to understand is that not every dentist needs to be listed on clinicwalk.com, but that they would do well to consider all the sites that are most relevant to their vertical and their locale.

What one wouldn’t expect to see is a simple storefront business in a single location, such as a salon, getting listed across a large geographical area. If you’re one salon among hundreds, one would think you’d focus on getting optimized well for your city, rather than appearing in a city two hours away.

Yet we came across a tanning salon in Newton, MA that appears for different keywords in seven cities across two states. They appear for “spray tans” in Fall River, MA (one hour away):

And for “spray tanning” in Woonsocket, RI (also over an hour away):

They show up on page 1 for most of their relevant keywords, even though nearly every keyword brings them up in a different city:

There is over a 2-hour driving distance between some of the cities that Incredible Tan shows up in:

Incredible Tan appears to be quite the savvy salon (they also advertise and offer online coupons.) But is their strategy a good one? How likely is it that someone in West Warwick, RI will drive an hour-plus to Newton, MA for a 15-minute tanning session, especially when there are plenty of other tanning salons much closer?

While it may not seem to make much sense from the internet marketing point of view, from the business owner’s perspective they don’t really have anything to lose. Maybe 1 in 100 potential customers from these farther-away areas will visit the website, think it’s nice, and remember it the next time they’re passing through on their way to Boston.

So many business owners have been asking how to do this that Google recently addressed the issue.

What do others think – is this a good thing?

When he searched on Google for “dollar store” in Albuquerque, the business did not show up on the first results page. The business also did not appear for the following relevant keywords that their competitors did:

To better understand why this franchise had a low visibility, we compared them to another franchise – in the same city – that did appear on the first page of Google.

This second Family Dollar Store ranked much higher, receiving a customer reach score of 58%. They came up for many of the same keywords as their competitors:

And they appear on many relevant sites:

Given that these are two out of 23 Family Dollar Store franchises in Albuquerque (not to mention the dozens of other local dollar stores), what was making one more visible than another?

So we started looking for the usual suspects.

• Does the higher-ranking business have a more relevant name? No, all the franchises have the exact same name.
• Does the business have a better optimized website? No, they all share the exact same website.
• Does the business have better products or services? No, they all sell the same products for a dollar.
• Does the business have more online citations? No – in fact the low-ranking business has more online citations than the higher-ranking business.

Faced with this puzzle, I couldn’t help but think that there’s always a way to differentiate seemingly identical entities:

This is a problem many franchises face. When you’re selling the same product, with the same name, same website, in the same city, and with dozens of competitors, how can you stand out from the rest?

As we were trying to understand this discrepancy, sitting in front of a Google maps of New Mexico, it dawned on us -

Location, location, location. The business that scored 58% is 1.5 miles from what Google considers the city center and the business that scored 8% is 7 miles away. As Matt McGee reported, proximity of address to city centroid is the twelfth most important factor in one’s online visibility ranking.

What do you think – is that the whole story, or is there more to this picture?