SEM Agency Differentiation
I think 2008 is going to be a tough year for SEM agencies and consultants. In many cases, which company remains in business will come down to how effectively it is able to differentiate itself. In times of plenty, the riff-raff and the true experts can co-exist, be profitable, and for the most part ignore each other. In bad times, the riff-raff are the ones likely to slash their prices because they know, deep down inside, that their services aren't worth the prices they've been charging. This action has a side-effect on the experts who then must put more effort into differentiating their service offerings to counter questions like, "Why do you cost 5 times XYZ SEM Agency?"
I'll be upfront and say that business development isn't my forte. I've been known to forget simple things like being sure to make the prospect feel good and instead dive right into what the prospect is doing wrong. Don't worry, I chastise myself enough about such things already. However, I think the differentiation as a concept is an easy one to grasp and one that I think about whenever heading out to talk to a prospect. Note that in an effort to not make public my own employer's efforts or the efforts of others that have been mentioned to me in private, I'm going to stick to information that is available on the web.
A Small SEM Agency's Approach
First, a few items I picked up from the Clientside SEM site (principals are Aaron Wall, Todd Malicoat, and Scott Smith). Surely you recognize at least one name in the list. In my case, Aaron Wall's association is what convinced me the company site was worth looking at. On the Why Clientside page there's a small chart that speaks to the idea of differentiation. In this chart we see a comparison between the common approach and Clientside SEM's approach: technically driven vs. marketing and business driven; traffic vs. qualified traffic; tactical vs. strategic; and be everywhere vs. be in the right places. You're in trouble if a couple of the differences between the common approach and Clientside's don't ring true. I do think that people get tripped up by the idea of tactical vs. strategic. A previous post of mine about SEO strategy is just under 1,000 words long and I still think I didn't explain it as well as I could have.
A Big SEM Agency's Approach
Chris Boggs, while he still worked for Razorfish / Avenue A, wrote about how there is no such thing as one-size that fits all when it comes to SEO pricing. There's some good stuff in his article, but the takeaway that resonated with me is his warning near the end where he writes, "If you represent a large organization and receive a response to an RFP within hours, or even a couple of days, you may wish to consider how much time the agency or SEM put into scoping your specific project." Chris is suggesting that his company makes a significant effort to truly assess the scope of a project in a way that no one else does. The implication here is that if Razorfish puts this much effort into a company that isn't even a client, then Razorfish must be really serious about doing a good job.
Another angle on the differentiation game is to focus on not what you do, but how you do it. Rand Fishkin of SEOmoz once shared a snippet of a conversation he had with Dana Melick of BeyondInk in which they both said they had "received many phone calls from customers of large SEO firms who had been unsatisfied with customer service, client relations and, most frequently, quality of work." Notice that the companies are complaining about customer service and client relations. It's been my experience that even good work can be overshadowed by shoddy service. The trick with the service angle is that prospects and clients often don't realize how attentive you are until they've experienced bad service. I believe many companies and consultants use this angle, but I've yet to witness an effective delivery.
Differentiation through industry recognition is another angle. Do you have any awards? Do you speak at the major conferences? Yes it's true that money can buy both of these things, but they're still worth considering. If you know nothing else, would you rather hire the person who has spoken at each SES and SMX conference for the last 5 years or someone who hasn't? At least you can rationalize that the conference moderators would've booted a complete idiot from the roster. An even better form of industry recognition is endorsements from those who have a good reputation already. If a company is already inclined to hire agency ABC, but ABC thinks agency XYZ would be a better fit, that sort of referral is quite powerful. The prospect is instantly more inclined to take the referral to heart because it came from a trusted source that is demonstrating an interest in what's best for the prospect. You can't do much better than that.
There are aspects of SEO and paid search that can benefit from technology. And if this technology happens to be something that would be difficult to recreate then you can publicly disclose it and use it as a way to set you apart from everyone else. Efficient Frontier (now Adobe AdLens) is one company that comes to mind. On their technology page they describe their mathematical approach to campaign optimization using proprietary algorithms. The second sentence compares their technology to that used by Wall Street hedge funds strongly suggesting an ability to scale. Their approach is so complicated that they've published an 11-page whitepaper to support it. Regardless of what you may think of the actual technology, this style of differentiation resonates with many corporate executives -- I know, I've seen it in action.
There are many other ways to differentiate, but like I said, I'm trying to stick to public information I do suggest that if you don't already have the answer to "How are you different?", you set aside some time very soon to figure it out.