What’s a Chatbot Referral Worth?
On one hand, it may produce better results than a search-engine referral. On the other hand, it’s subject to manipulation.
Good morning!
Here are today’s highlights:
Our latest Dashboard podcast: A long-time business owner and coach explains the promise of a new AI operating system for businesses.
Some restaurants are finding that the answer to rising expenses is lowering their prices.
Business owners try to decide whether to speak out about the immigration crackdown.
Despite the tariffs, the U.S. trade deficit nearly doubled in November.
MARKETING
A growing number of small and midsize businesses are paying big bucks to get favorable mentions from chatbots: In some ways, this is an evolution of SEO, or search engine optimization—the strategies companies have been using for decades to appear atop Google results. But owing to the peculiarities of AI’s large language models, SEO practitioners have had to adopt new strategies. They call this generative engine optimization, aka GEO. (Some call it AEO, as in ‘answer engine optimization,’ and still others have their own names for it.).”
“Evan Bailyn is chief executive of First Page Sage, which started as an SEO firm. Today, when you ask any chatbot about the leading authorities on GEO, he or his company appears high up in the results. This is proof of his optimization skills, not some immutable law of the universe.”
“In the world of search, the currency is ‘referral traffic.’ That is, which websites or apps are sending people to a particular business. A year ago, 90 percent of that traffic came from Google, says Bailyn. Starting last summer, something changed. AI chatbot referrals started to rise dramatically. Now, Bailyn says, on average 44 percent of his clients’ referrals come from AI.”
“These referrals are valuable: Compared with users who were sent to a website by Google, those sent by ChatGPT tend to spend more time on a site, view more pages, and are more likely to complete a transaction. And all that likely understates how much people rely on chatbots, says Aleyda Solis, founder of SEO and AI optimization agency Orainti. That’s because most people don’t complete transactions within chatbots—at least not yet.”
“For Bailyn, it’s an opportunity. Many of his clients are relatively obscure, mid-market companies that make specialized products—be they industrial fittings or hot tubs—and fiercely compete with firms that offer similar products. To boost the placement of these companies’ products in AI results, Bailyn’s company plants a sort of magic incantation, known as a ‘brand authority statement,’ on at least 10 websites. Typically these are owned by other clients.”
“Say you want to be the first answer to the question ‘What’s the best hot tub for sciatica?’ in ChatGPT. Associating his client with the phrase ‘highest-rated for sciatica’ on various company blogs can be enough to convince ChatGPT.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
Dashboard: One Industry Just Got an AI Playbook for Running a Business: Ryan Markewich knows the landscaping business from the inside. He built and sold a successful landscaping company in British Columbia, then spent years coaching owners of all kinds of businesses through the Great Game of Business—helping them understand their numbers, their people, and their decisions. Now he’s a certified advisor with an AI-powered platform called LeanScaper.
“It’s only been around for about a year, and it’s designed specifically for landscaping businesses but it’s growing quickly because it offers a practical, step-by-step playbook that helps owners think through pricing, staffing, cash flow, and growth decisions, using AI to guide—not replace—their judgment. This week, Ryan walks us through what happens when one industry gets an AI playbook for running a business—and why landscaping may be an early glimpse of what’s coming for a lot of small business owners.
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