HomeClick Profits From Keyword Prospecting

Share this content:
HomeClick, an online high-end housewares merchant, claims it is turning a profit by, among other things, getting 70 percent of its new customers through search engine keyword marketing.

Eli Katz, CEO of HomeClick, Edison, NJ, thinks the Internet is revealing a new type of mail-order customer: someone who buys online but was not previously a catalog buyer.

"There are people who have been introduced to ... purchasing online who were not catalog buyers," he said. "Not everybody [who may have a propensity to make a mail-order purchase] is on all the lists."

HomeClick, which claims $1 million in sales per month, rents no lists. Instead, it has one full-time employee dedicated to ensuring paid listings on search engines are converting at a profit, even for most first-time customers.

Paying for search engine positioning is increasingly viewed as an effective way to acquire customers online.

"It's the only thing that's working other than affiliate programs, so marketers are talking about it," said Kevin Lee, CEO of Did-it.com, a New York search marketing agency.

Overture, for example, which pioneered paid search as GoTo.com, lets marketers bid on search keywords and phrases. It syndicates its results to other search engines. When Web searchers use those words at MSN, Lycos, Yahoo and others, Overture returns a segment of the search engine's results in order from the highest bidder down.

Google is another top provider of paid listings. Its results are syndicated on AskJeeves, EarthLink and AOL, among others.

However, only the top positions appear on most syndicated search engines. As a result, the difference in reach between positions two and three may be minor, but between positions three and four may be astronomical.

"The thing about paid search is that you need to manage it very carefully," Katz said. For example, HomeClick, formerly BathClick, monitors what competitors bid for a keyword, but is careful not to outbid beyond its allowable cost per lead. The competitor may be bidding far more than it can afford to pay for a lead.

"Some of them are like the cartoon character who runs off a cliff, but doesn't fall until he looks down," Katz said, adding that HomeClick aims to keep marketing costs below 10 percent of revenue.

"You want to be the No. 1 position in many cases, but if the No. 1 position is $2, and the No. 2 position is $1.99 and the No. 3 position is 50 cents, for that $1.50 premium, you might as well be No. 3," he said.

Also, many marketers find that the No. 1 position does not convert as well as Nos. 2 and 3, Lee said.

"The No. 1 position attracts what I call compulsive clickers," he said, "people who browse but end up buying elsewhere."

Meanwhile, HomeClick maintains a list of nearly 1,000 keywords it has determined convert at an allowable cost per new customer. The company offers about 30,000 products.

As for devising the keyword list, Katz said, "that's the art. I can give you 50 ways to say 'kitchen sink.' There's 'stainless steel kitchen sink,' there's 'ceramic kitchen sink,' then there are all the brands. The word 'kitchen sink' may get you the most impressions but may get the fewest click-throughs, whereas if you say 'stainless steel kitchen sink' you've got a much more targeted consumer."

Though it is impossible to tell whether a searcher is a remote purchaser, he said, it is still a qualified lead.

"It's common sense that if I want to buy a toilet, I will search on the word 'toilet,'" he said.

Katz acknowledged that some people research purchases online and buy offline but claimed that he has seen the reverse, especially with considered purchases.

"People go to stores to touch and feel things, especially expensive items," he said. "A book is a book is a book. But if you're going to buy a car, you'll go to the showroom to sit in the car and smell the leather. But then it's almost a sin if you don't go online and try to find the best price."

Katz said HomeClick's average order size is more than $500.


Next Article in Digital Marketing

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above