September 14, 2017
Opportunity cost plays an important role in any marketing strategy. It is important to determine which products are to be pushed more. Before estimating the most profitable option, you need to figure out the opportunity cost of the options that you are foregoing. The same logic applies to seo campaigns as well. Keyword bids are an investment. You need to calculate the opportunity cost for each of the possible option in order to pick the ones that will be best for your business.
What is opportunity cost? It is the difference between the expected return of two investment options. For example, suppose you have an e-commerce webpage, that sells home furnishing items. You wish to employ an seo vendor. You have shortlisted two options. Both the seo providers have good reviews. How do you decide which one to choose?
First, obviously, you compare the prices of the seo companies. It may seem pragmatic to choose the cheaper option at first look, but here is where the opportunity cost comes into play.
To calculate opportunity cost you need to analyse the expected return on each investment. Go to web pages that post genuine seo reviews. Which firm has a higher success rate. Quantify those success rates into expected returns. Go through seo company rankings. Give a bonus to the better ranked company in terms of expected returns.
Calculate the difference between the expected returns of the two options. That is your opportunity cost.
Having a low opportunity cost means both options are equally favorable. It the opportunity cost is high, then you need to think which company can best cater to your needs. Even if seo company A has a higher expected return at the moment, the seo strategy of seo company B might help you in the long run.
Analyse which kind of tactics each company employs. Are the risks involved in choosing seo company A conducive to your business strategy? Or will it be more favorable to go with seo company B although it has a lower expected return?
Figure out what you are looking for at the moment- quantified returns or optimum stability. Then, choose the best seo company for your business.
Going for the cheapest option, or the most quantified profits is not favorable all the time. When you are building a business you need to place the next block strategically, so that it supports your business structure. It needs to be a step towards the eventual goal. You need to choose the option that will bring you closer to the long term goal.