The term you hear from real estate agents is location, location, location. They usually advise clients to locate businesses on busy intersections or key parts of the city.
This advice can break your business if you follow this logic in the age of smartphones and Google Searches.
In the early days of search Google based their results on how close the business was to the center of the city. In SEO terms this is called the centroid.
Fast forward to 2013, and Mike weighed in again with an updated definition of “industry centroids”,
“If you read their (Google’s) patents, they actually deal with the center of the industries … as defining the center of the search. So if all the lawyers are on the corner of Main and State, that typically defines the center of the search, rather than the center of the city… it isn’t even the centroid of the city that matters. It matters that you are near where the other people in your industry are.”
In other words, Google’s perception of a centralized location for auto dealerships could be completely different than that for medical practices, and that neither might be located anywhere near the city center.
In the old Search days the closer a business is to the city center the higher they would show up on Google Search. However, we know how this has changed and the centroid of the city is determined by SIMILAR Businesses locations in your industry.
Now, let’s look back at the map when we Google Seattle Dispensaries.
I am doing this Google Search from another state, this will be an important factor to remember in the next section of this white paper. In the graphic above our theory is working perfectly as it shows the business Green Door as the number 1 returned search. But as the Moz article mentioned if all the businesses were clustered in a different part of the city the centroid would change.
Let’s take a look at Tacoma’s city centroid shown by the arrow below.
You can usually tell by where Google puts the name of the city on the map as to how it defines the center of the city.
If you were to go by Google’s own patent that we read above this would make sense since it looks like the cluster of recreational marijuana dispensaries has shifted West and South making Nature’s Resource Center closer to the industry centroid than Northwest Best Alternative Medicine which is closer to the city centroid.
There are many factors that Google considered when ranking a local business. There are close to 80 different factors but we will concentrate now on the two most important ones. How many links the site has pointed to it and how many Google signals it has. To find out more about local ranking factors visit. https://moz.com/local-search-ranking-factors
There over 20 dispensaries in Tacoma but this business Natures Resource shows up number 1 for keyword search (dispensaries in Tacoma) From the chart above we see that Natures Resource only has a domain authority of 13. The more powerful a website the higher the Domain Authority will be. For example, sites like Facebook, Google, and Microsoft have a domain authority of 100. New websites will have domain authorities of 2 or 1. Most local business websites sit in the domain range of 7 to 40. The more links you have pointing to your site the higher that site’s domain authority. Natures Resource center only has 369 links pointing to it yet IT IS STILL OUTRANKING SITES with thousands of more links. Why? Because according to Google’s own patent the centroid is based on the central hub of that city’s business category. It drove me crazy for months trying to figure out how Nature resource was constantly outranking other competitors when other sites had 1000 times more SEO power than that company. Now we know why.
What If the Search Is Done Inside the City
As I noted before all of these searches were done outside the city of Seattle and Tacoma. When the user is searching inside the city of their search. THEY BECOME THE CENTROID. Let me repeat that. When the search is done is inside the city, they become the centroid. Let’s take another look at the search for marijuana dispensaries in the city of Tacoma.
“…research indicates that up to 80% of the variation in rank can be explained by distance from the centroid on certain searches.” See: http://blumenthals.com/blog/2008/08/04/ranking-factors-in-google-maps-cracking-the-code-smx-local/
With this in mind, let’s look at how the search for the same term Tacoma Dispensary will show up with 4 different mobile phone users on the following map.
In the following map if there is a customer in position 1 and they type Dispensary Tacoma or Dispensary Near Me. The results would be:
- Green Token
- Diamond Green
- Mary Mart
If the user is in Position number two on a mobile device Google will make that location the centroid and their search results would be:
- The Joint
- Clear Choice
- Zips Cannabis
If the mobile or desktop user does a search from position 3 their results would look like this:
- Natures Resource Center
- Tacoma House of Cannabis
- Urban Bud Recreational
And finally from Position 4 we see:
- Green Collar Cannabis
- Seattle Medical Clinic
- Zips Cannabis
Besides these lovely ranges of search variations, there are many other things that can affect the user’s search results including. NOTICE!!!! PROXIMITY OF ADDRESS TO THE POINT OF SEARCH IS THE NUMBER ONE RANKING FACTOR. Seehttps://www.brightlocal.com/2019/01/14/how-to-choose-the-best-google-my-business-category-for-any-local-business/
Previous Search History, If there are two users standing side by side on a cell phone, their results could be different based on their previous 180-day search history. EVEN IF THEY ARE LOGGED out of Google there is still a cookie that tracks the search. See: https://www.wsoaonline.com/does-your-internet-history-effect-google-search-results/
Making the Right Location Decision
So now the business owner is left with two problems to solve. Where is the best location to place my business to take advantage of the OUTSIDE CITY centroid? You will get a hundred times more business if you locate yourself within your industry centroid for your particular city. Here is the search for San Diego Restaurants. All the restaurants are clustered in one area with a few to the North. The arrow indicates the optimal location for a new restaurant. Now, remember for each Industry the centroid changes.
It is much better to be located near the centroid because you will come up first for out-of-town victories and people looking to travel. Over time this will give your business a tremendous advantage over your competitors.
I know for a fact that both dispensaries in number 1 and number 2 positions spend around $5000 a month on SEO and that Natures Resource is paying zero. You can tell by the number of links acquired. Position one gets 37 percent of the clicks, position 2 gets 12 percent of the clicks. Position 3 gets 9 percent of the clicks. If there is a total of 100,000 clicks per month, NRC would be getting 33,000, Position 2 12,000, and potion 3 7,000 clicks. So NRC is getting 18,000 more clicks than companies paying monthly SEO fees just BY BEING IN THE RIGHT CENTROID ON THE MAP.
What about if a Google paid ad is number 1? Research has shown Organic results get 94 percent more clicks than paid ads. Think about it? When is the last time you clicked on an ad? Your advertising dollar is going to be more effective in finding a good SEO firm than paying Google Adword.
So how are small business owners suppose to tell how their SEO is working. There are several reports and charts that can be used but one of the main ones used is the MOZ Search Visibility Report which gives you a score based on keywords ranked against your competitors.
As you can see my client is number by a factor of 6 to 1 against the 4 competitors that you allowed to track. More information can be found here on the Moz Search Visibility Report located here. https://moz.com/help/moz-pro/rankings/search-visibility.
Other tools you can use to measure progress and success are:
- Google My Business Reports
- Google Webmaster Reports
- Bing Webmaster Reports
- Google Analytics Reports
- Third-Party SEO Tools
How to Determine Your SEO Return on Investment
One of the most important reports that Google My Business provides is the total actions reports. This report tells you how many users visited your website, how many requested directions, how many phone calls, and how many messages were texted to your local business. One thing to keep in mind, that this data does not include information from Bing, Yahoo, or Apple Maps, so conservatively you should add 10 percent to the above numbers. With my clients, I use the request for directions as the main number to calculate ROI, because only NEW customers should need directions to your store. This number is aggregated whenever a customer googles for your business type and then clicks the direction button.
In a 30 day period for this particular client, 1,700 customers clicked on the direction request. If the average profit per sale for the business is $8.00 this calculates to 13,600 a month in profit. And that is if the customer NEVER comes back and only generates one sale. The average retention rate for local business customers is 40 percent. So if you’re paying $2000 a month for SEO it is well worth the cost if your SEO Firm can produce these results.
In conclusion, with the above graphic in mind, you should be able to tell that is listed as high as possible in Google will only generate more revenue for your business. If you see your business not ranking well always bear in mind where you are doing your search. Also, it is 10 times more important to rank high for out-of-town searches than in town searches. If you would like a free SEO competitor audit for your business contact the professionals at Isenselogic.com or Click Here
Saul Meshach CEO Isenselogic.com