Episode Overview: Total addressable market concepts are used more often by business strategists than SEOs, but combining SEO tactics and insights with strategists’ tactics can better identify TAM opportunities. Join host Ben as he speaks with Garrett Mehrguth, CEO of Directive Consulting, about how to successfully determine your company’s total addressable market for SEO.
Summary
- Think about SEO visibility in terms of how your brand ranks, not your website, and clarify which category your brand truly fits in to assess your brand’s total addressable market.
- Although your TAM might be large, pursuing every single contact within it isn’t realistic.
- SEO can help identify contacts within your TAM that your brand and its category matches, saving time and enabling direct access to interested parties who are likely to engage or convert.
GUESTS & RESOURCES
- Garrett Mehrguth: Website // LinkedIn
- The Voices of Search Podcast: Email // LinkedIn // Twitter
- Benjamin Shapiro: Website // LinkedIn // Twitter
Ben: Welcome to the Voices of Search podcast. Today we’re going to discuss thinking about SEO strategy from a general marketing strategy perspective. Joining us today is Garrett Mehrguth, who is the CEO of Directive Consulting, which is a B2B and enterprise search marketing agency that companies trust to scale their business. Directive supports customers with SEO, PPC, content marketing and social media driven by powerful analytics and a dedicated team of specialists. And today, Garrett and I are going to talk about determining your total addressable market for SEO. Okay, on with the show. Here’s the first part of my conversation with Garrett Mehrguth, founder of Directive Consulting. Garrett, welcome back to the Voices of Search podcast.
Garrett: Thanks for having me man. Glad to be here and excited to chat with you and yeah man, go through this whole process with. Rock me home.
Ben: It’s been awhile. We had you back on the show, God it’s been over a year, talking about how you got into SEO and your path going from all sorts of odd jobs, including I think you were a janitor at some point to now you’re running this SEO agency which is scaled to focus on enterprise clients. You were, if I remember correctly, the top result for SEO agency or something absurd like that.
Garrett: Yeah, for awhile. I mean I think we were ranked No. 1 for SEO agency for a couple of years and no, we tried to do our own … I don’t know, I don’t want to be one of those agencies that sell their SEO on PPC, but then refuses to do it for themselves. To me it’s kind of backwards if you don’t practice what you preach because then you’re not testing your ideas on yourself, you’re testing on your clients and I don’t know. So I like to try to do my own search too.
Ben: So for anybody who hasn’t heard that episode, it’s one of my favorite episodes that we recorded. If you haven’t heard it, Garrett’s story is really interesting and I think that anyone who is interested in a path of coming from a nontraditional background and getting into SEO will appreciate that. But today we’re actually talking tactics, and one of the things that I appreciate about your approach is you really think about things from a marketer’s perspective, not just an SEO’s perspective. And first off, I’d love to hear your perspective on when you’re thinking about tackling a problem for an enterprise company or when you’re thinking about doing SEO strategies for yourself, what’s one of the first things that you think about? What’s step one?
Garrett: A big question man. So we work pretty much exclusively with SAS and software companies. And my very first step when it comes to search is twofold. Kind of two steps. One is category. So many of us in search are so obsessed with this idea that we can rank our website and that everything in SEO is about ranking your website. But it should be about ranking your brand. And so if you change your idea from how can I rank my website to how can I rank my brand, in other words, how can I make my brand discoverable when people are searching for what I offer? Then the first thing you have to understand then is what category do I exist in? So if you’re Drift, you exist in the live chat software space. If you’re Terminus, you exist in the ABM software space.
Garrett: So once you understand your category, the question is when someone searches for the best ABM software, do you as Terminus show up as often as possible on other websites that are already ranking? In other words, you’re paying to be discovered organically. So that’s kind of what I love to do first and find how discoverable are you? And then make sure that you really understand the buying journey at the bottom of the funnel.
Garrett: And that’s on the SEO side. That’s kind of my first step. On paid search and PPC and just advertising because I don’t really like to see myself as an SEO. It’s more like a search marketer because I do both SEO and PPC because I think you have to look at a search engine results page holistically. So as an advertiser, I like to map out the total addressable market. That’s kind of my very first step.
Ben: So let’s talk a little bit about what you mean by total addressable market. I think of that as something that is not really a metric that SEOs think about, right? That is a business strategist, a general marketer’s idea for understanding whether a business venture is something that’s worth going into and how much of the market they can tackle. When you think about TAM, totally addressable market, from the general business perspective, is it any different than how you’re thinking about it from the SEO perspective?
Garrett: Yeah, I mean I would hate to say that I think about total addressable market in SEO as much as I think about total addressable market in advertising. So I do want to just differentiate there just because I don’t necessarily totally use TAM and SEO, but for advertising a thousand percent. And so what I mean by that is all I tried to launch a top of funnel campaign, let’s say for B2B on Facebook or Twitter. Now, one of the hardest things in Facebook and Twitter right now is you don’t have great firmographic data. So let’s even say LinkedIn, okay? And so you’re on LinkedIn and you want to launch spotlight ads, text ads, sponsored content, whatever that is you’re wanting to do. And the problem is you want to make sure that the audience size that you’re advertising to matches what the actual amount of people in that industry are.
Garrett: So what I do to map this out, I go onto LinkedIn sales navigator because I also kind of do a lot of sales development. So I kind of need to run both. So I get to see outbound sales development. I get to see social on the brand side, I get to see social on the paid side, I get to see SEO, I get to see PPC. So I get to touch all these pieces and then I also loop in finance, right? So you take all those tactics, then you layer with finance and start to say, okay so if I wanted to advertise to every software company on the market, how many are there in the US that have over 50 employees but less than 5,000? The answer is 8,000 accounts.
Garrett: Cool. So now that lets me determine what my account based advertising budget should be if I want to use a platform like Terminus. See without that knowledge, I might say 3,000, 2,000 and just advertise to advertise. I might go on Facebook and get three million impressions. Cool. Well there’s only 24,000 marketers at those 8,000 accounts and that’s before setting negative titles for things we don’t service like product, field, brand, social, et cetera.
Garrett: So the power in all this is that if you want to be efficient with your advertising and your customer acquisition, you should probably know how many customers are even out there. And I guess you could pilot your SEO, like how are you going to get your search volume greater than the amount of people who could even possibly search, right? And so it helps for you to understand and put a little humility around people like myself who might want to take over the world. Like dude, you don’t need to take over the world. You only need to take over 8,000 accounts. And it kind of focuses you.
Ben: So first off, I love the strategy of thinking about your totally addressable market by looking at the actual body count, the volume of people. I think a lot of business strategists look at totally addressable market as households or revenue generated or the existing marketing size amount of marketing budget. And your take is very tangible. Here are the number of people that I need to reach to be effective. Hey, if I am running a B2B SAS business that’s targeting people that work in chat, there’s 47 people that work with marketing titles. That is my totally addressable market. I need to reach those 47 people. That’s going to change my marketing strategies.
Garrett: You can do some badass direct mail or something, right? Like you can actually be creative. The problem is sometimes we act like our market’s way bigger than it is and so we do these crappy scaled out tactics and strategies that have low impact in a noisy space.
Ben: So when you think about the number of people that you can get using that as your totally addressable market and you’re putting on your SEO hat and thinking, okay, here’s a market that I’m trying to tackle or here’s a strategy that I’m trying to implement. How does that influence what your strategy should be? What are the campaigns, the keywords, how much effort you should be putting into, and also what the priority SEO should get?
Garrett: Yeah, so I think SEO, if you go back to what I was saying earlier and I said, okay, SEO isn’t about how much traffic my website has, but how much traffic my brand has. I can’t tell you how important this is. The second you change your perspective to trying to rank for things with your website, instead just say, look, I want to rank for things with my brand. At the end of the day, I’m just trying to get a lead. Why do I need the glory to go to organic traffic? Why can’t it just go to direct? Why can’t it come from some black box I don’t know about, but leads are up. And so we’ve got to take this humble approach and say, I don’t need to prove everything with data and have it all in GA and feel perfect about it all.
Garrett: But instead, every time I search my customer, I find my brand, you’ll beat everybody. And so essentially what I do is I do a reverse funnel. So when I work on an account and I don’t want to do their demand generation, I want to do their lead gen for a software company, I first go to their category, like I was saying where I said, cool. When I’m searching and I layer you’re an ERP software and I searched top ERP software. Right now I’m launching with an identity management company. They want to do one pass, but instead of using a master password, use your face. Pretty smart idea.
Ben: I would love that. I can not remember my passwords anymore.
Garrett: The problem is they’re a startup, they don’t have strong domain authority, they’re going against one pass and these huge companies, they can’t really rank, which is content that’s way longterm place. So what do you do to drive leads? What you have to do then is say, cool. Our category’s identity management. We’re going to find PC, Mac, FinancesOnline, Capterra, G2 crowd, Software Advice, and the rest of them. And we’re going to position ourselves to be in the top five. Not number one, but in the top five with ample reviews on every category.
Garrett: Great. Now what happens is anytime someone has their wallet out, and the CTO, because here’s the thing, CTOs don’t search. Your decision maker is not who you need to market to. It’s your champion. It’s the person that you work with after they sign the contract. That person gets told by the CTO, “Hey, go get three quotes.” Your goal is to be one of those three quotes. Once you’re positioned there, now you use something like Terminus or something else.
Garrett: And you go top of funnel and then you map out your total adjustable market of accounts and then you layer that with the amount of people to get your target impression share. And now you launch a targeted ad campaign on those people to generate interest and then you’re positioned if you do, to then capture the demand for the category you exist in. You put those two things together with sales enablement content and other things, and next thing you know, your quarterly targets are going up.
Ben: So figuring out your total addressable market helps you understand not only how many people you could target, who specifically they are. When you start applying an SEO strategy, are there specific times where you’re saying, hey look, I understand my totally addressable market. SEO doesn’t make sense, and where does SEO make sense? Is there a market size where you’re like, hey, organic traffic really matters. How does understanding your totally addressable market impact what your SEO strategy should be?
Garrett: Yeah, so for us, for example, so we have pretty high minimums as an agency. I think we’re at $7,000 a month as a minimum. We try to raise it quarterly or so. And so if it costs $7,000 to work with us, and we know that the average SEO retainers anywhere between like 2-4k, then we’re up in the higher end of being able to serve everyone. But then if you go into the software, we’re really not that hot. Okay, cool. So we’re middle or upper middle for software retainers. Great. There’s 24,000 people in the marketing of software. So theoretically, if my target is to get to 50,000 visitors a month to my website, I probably now outgrow my total addressable market. So the cool part is it allows you to say what is my goal is not velocity or volume of content, but instead quality of content.
Garrett: In other words, I don’t need 100,000 users to my website to see success. I need 24,000 if every single person in my audience aligns because they won’t. So maybe you divide that by your buying cycle. So that average contract length of your industry. So SEO for example, our PPC average is six to 12 month contract. So every eight months, theoretically someone from digital. So let’s say there’s two people in digital of the 24,000. So now you divide the 24,000 by two. Now you have essentially how many people or two from the 8,000 right? So two times 8,000 so it’s 16,000 people could possibly be your champion, your searcher, your buyer, give or take. So now you know how much traffic do you want. You want around 16 to 20,000 visitors a month, all from software. You pull that off, you’ll be the number one software agency in the market.
Ben: So the reason why I wanted to talk to Garrett about this, and we’re talking about SEO from a general marketer’s perspective. The first thing that business strategists, marketing strategists do when they’re trying to figure out whether a business opportunity is worth chasing is they understand how big that opportunity is, who they need to reach and how they’re going to address them. And then SEO comes in, traditionally, down the funnel as an operational tactic. If you were thinking about what SEO strategies you should be implementing, what is effective, and you need to communicate that to your organization, understanding that totally addressable market can be very important.
Ben: Let’s play a scenario out here. There are 8,000 people that are in my target market and I’m driving 7,000 unique visitors per month. That’s a metric that’s probably going to be pretty interesting to your CMO. And then the question becomes, “Well, who am I reaching through SEO and am I actually converting them?” So we’re going to talk a little bit more about understanding that who with Garrett tomorrow. So that wraps up this episode of the Voices of Search podcast. Thanks for listening to my conversation with Garrett Mehrguth, founder of Directive Consulting.
Ben: We’d love to continue the conversation with you. So if you’re interested in contacting Garrett, you can find a link to his LinkedIn profile in our show notes. You can contact him on Twitter, where his handle is GMehrguth, that’s G-M-E-H-R-G-U-T-H. Or you can visit his company’s website, which is directiveconsulting.com. D-I-R-E-C-T-I-V-E consulting.com. Just one more link in our show notes that I’d like to tell you about if you didn’t have a chance to take notes while you were listening to this podcast, head over to voices of search.com where we have summaries of all of our episodes, contact information for our guests.
Ben: You can also send us your topic suggestions, your SEO questions, or you can even apply to be a guest speaker on the Voices of Search podcast. Of course, you could always reach out on social media. Our handle is Voices of Search on Twitter and my personal handle is Ben J Shap. B-E-N-J-S-H-A-P. And if you haven’t subscribed yet and you want a daily stream of SEO and content marketing insights in your podcast feed. In addition to part two of our conversation with Garrett Mehrguth, when we talk about mastering the who with your SEO campaigns. We’re going to publish an episode every day during the work week. So hit the subscribe button in your podcast app, and we’ll be back on your feed soon. All right, that’s it for today. But until next time, remember, the answers are always in the data.