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How to Calculate Churn Rate + 9 Ways to Decrease It

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How to Calculate Churn Rate + 9 Ways to Decrease It


Churn rate is a proportion of customers who stop paying for a product or service during a given time period. It’s the complete opposite of growth rate, making it one of the most important marketing and sales metrics for subscription-based companies.

It’s a seemingly easy-to-understand metric. But the simple formula to calculate churn rate has some limitations and potential traps many marketers may not take into account. Also, contrary to popular belief, you can influence churn long before someone becomes a customer.

There’s quite a lot to explore here. In this article, you’ll learn the following:

Let’s dive into it.

What makes churn rate so important?

There are multiple reasons why keeping track of your churn rate and working with it can help to boost your marketing performance. Well, five main reasons to be specific.

1. Direct revenue impact

Churn rate is a decelerator of your growth rate. But unlike the growth rate, a certain percentage of churn is here to stay. Many fast-growing companies may fall into the trap of ignoring high churns when their growth is much higher, but it’s not a sustainable business model.

A 15% churn rate may not seem that bad when a startup grows 200% year-over-year. But that growth rate will eventually fall, and the churn may not. Any company will sooner or later suffer from high churn rates even if they weren’t such a big problem initially.

The sooner you start tackling your churn rate, the better. It has compounding effects. Let’s consider two companies with $1M ARR (annual recurring revenue) each and a similar growth rate of 25%. But they have different churn rates (scroll horizontally to see all table columns):

  Year 0 ARR Year 1 ARR Year 2 ARR Year 3 ARR Year 4 ARR Year 5 ARR
25% growth
5% churn
$1,000,000 $1,200,000 $1,440,000 $1,728,000 $2,073,600 $2,448,320
25% growth
10% churn
$1,000,000 $1,150,000 $1,322,500 $1,520,875 $1,749,006 $2,011,357

That’s what a difference of 5 percentage points in churn rate can do to revenue. The higher you churn, the slower you grow. Easy as that.

2. Influence your word-of-mouth marketing

Word-of-mouth marketing (WoMM) is the process of influencing and encouraging natural discussions about a product, service, or company. I’m sure you’ve subscribed to some product or service because someone you trust told you about it. For this reason, WoMM can be one of the most powerful marketing channels.

The fact that more than 14,000 new customers in 2020 told us they were referred to Ahrefs by their friends is the best proof of WoMM’s importance:

Person said in registration form they learned about Ahrefs through friends

Churn rate reflects how well you meet the expectations of people who sign up for your product or service. While we can’t directly translate high churn into dissatisfaction, we can assume it’s a signal for a need to significantly improve your WoMM.

3. Early indicator of bad news for your business

Noticed a big spike in your monthly churn rate? Chances are you did something wrong that month.

Maybe product changes got negative feedback? Increased pricing? Any bad publicity? Or it could be your competitors stepped up their game and poached a significant number of your customers.

At any rate, having such an early indicator of these changes always comes in handy.

4. Customer lifetime value variable

Customer lifetime value (LTV) is a metric that estimates how much money an individual customer will spend on your products or services. Increasing your average customer’s worth not only improves your financial metrics but also allows you to spend more on acquiring new customers.

LTV is yet another important metric, even a marketing KPI, that you should keep track of. The best way for subscription-based companies to calculate the metric is as follows:

LTV = avg. monthly revenue per customer/avg. customer monthly churn rate

The fact that churn enables calculations of other crucial marketing metrics should make it a staple in your spreadsheets and dashboards.

5. Proxy for performance forecasts

Many companies and their analysts engage in forecasting future performances. Accordingly, the churn rate is an essential variable in the calculations.

We’re not talking about in-house uses only. Churn rate is also an important indicator when it comes to investing in subscription-based companies.

So what does it take to calculate churn rate?

How to calculate churn rate?

You might have already noticed that I talked about churn rates in relation to both customers and revenue. These are two types of churn rates, and here’s everything you need to know about calculating them.

Customer churn formula

Customer churn rate = (customers lost during period/customers at start of period) x 100

For example, on May 1, you had 1,000 active customers. And on May 31, you lost 25 of them. That means your monthly customer churn rate is 2.5%.

Easy start. Let’s move on.

Revenue churn formula

Revenue churn rate = (revenue lost during period/revenue at start of period) x 100

As you can see, it’s basically the same formula. Only the variable is different and a bit more tricky.

Here’s the thing: You should only take into account the revenue generated or lost from the customers you had at the start of the period.

Let’s say you have $100K MRR (monthly recurring revenue) at the start of the period. You manage to upgrade some of your existing customers for an additional $5K MRR, lose a few customers who contributed to $4K MRR, and notice $2K worth of downgrades.

The revenue lost during the period is $1,000. This is as you lost $6K due to churned and downgraded customers. But you made $5K from customers who decided to upgrade. Your revenue churn rate for that period is therefore 1%, as the formula is (1,000/100,000) x 100.

Sometimes, your upgrades will be worth more than the revenue lost. In that case, you’ll have a negative number in the numerator, making the overall churn for that period negative. That’s your best-case scenario, as it means growth even without taking any new customers into account.

When to use which churn rate formula?

It doesn’t take a math genius to figure out that customer and churn rates usually differ. I recommend you calculate both churns because they provide additional information.

If:

  • Customer churn rate > revenue churn rate, then your churned customers have a below-average lifetime value.
  • Customer churn rate < revenue churn rate, then some of your higher-value customers churned.

Always try to put the numbers into context. For example, it’s possible to have a high revenue churn despite having done exceptionally well during a certain period.

Such a scenario happens when, for example, a business has a few percent of customers who contribute to the vast majority of revenue. If one of those huge accounts churned, it would make the revenue churn look bad.

What are the limitations of the basic churn formula?

Calculating churn rate is easy until it isn’t. I won’t dive into all the nitty-gritty, but you should be aware of the following:

  • The formula works best when calculating churn rates on a monthly basis.
  • For longer periods of time, newly acquired customers who churn within the given period can skew the results. You have two options here. Disregard all churns from customers acquired during that period or add up monthly data and calculate a weighted average churn.
  • Consider calculating churns for some of your plans separately, especially if you target completely different market segments at the same time (e.g., SMBs vs. enterprises).
  • If you’re a startup, your churn rates will likely fluctuate a lot. That’s because you experience rapid growth and new customers tend to churn more frequently than those who stick around for a while. Your likely small sample size (# of customers) is also a factor here.
  • Your business may suffer from seasonal swings, so a higher churn rate may be natural during some months.

But the bottom line is that no matter how you calculate your churn, you should stick with it and work on decreasing whatever the number is.

So what’s really a bad, so-so, or good churn rate?

What’s a good churn rate for your business?

If you Googled this, you’d encounter anything between 2% and 8% to be an acceptable churn rate. That’s useless information for a metric where a 1% difference could mean tons of money. On top of that, some resources don’t even mention what type of churn over how long they’re referring to.

But we need a number. It’s important to have an anchor to recognize instances when churn is a minor problem and we should, thus, prioritize achieving other marketing objectives. Fortunately, all we need here is to get more specific with Google queries.

Make a list of competitors. Google their names in combination with “churn rate” or “retention rate” (the inverse metric). Voilà:

Google SERP for "cloudfare 'churn rate'"
Google SERP for "fastly 'retention rate'"

You should get some specific numbers. If you have publicly traded companies on your list, the chances of getting more numbers for your benchmarking are high.

That’s because these companies regularly publish financial reports and have their executives share metrics and data in interviews. But you can get lucky with private companies as well.

One important thing to keep in mind. You and your competitors likely target different segments of the market, and that has a huge impact on churn rates.

As you can see in the example above, Cloudflare reports 36% annual churn, while Fastly is at 0.7%. They’re both Content Delivery Network (CDN) providers, but Cloudflare caters to everyone in the market (including a free plan option). But Fastly is only targeting enterprise and high-value customers who usually sign long-term contracts.

All right. So you found out that your churn is probably too high and you should work on decreasing it. That’s what the second half of this post is all about.

Nine ways to decrease churn rate

There seems to be a misconception that churn happens after someone becomes your customer. No. You can influence your churn rate in all stages of the marketing funnel:

Funnel with six sections. From top to bottom (Awareness, Interest, Consideration, Action, Loyalty, Advocacy)

Let’s show you how.

1. Collect feedback from churned customers

Talking to your customers is an important part of market research. But you may learn even more when you talk to people and companies that stopped paying for your product or service.

Now don’t fall into the trap of taking action on everything you hear from those who churned. Just systematically collect the feedback to get a solid sample. Then decide if taking action on their objections and problems makes sense for your product roadmap and marketing strategy.

Since prioritization mainly revolves around two variables—effort and outcome—you’ll probably focus more on problems brought up by your most valuable customer segments.

You may also find out that a certain percentage of your customers only need to use your product for a month or two every year. You’ll get these insights after collecting such feedback for a while. Then you can account for this natural churn to help you tackle the more important churn.

2. Fix your positioning

Positioning is how your target market should perceive your brand. It’s the intended brand image that consists of associations people have of your brand and products.

Positioning allows you to differentiate from your competitors and, in some cases, even influence how the target market perceives your competitors.

Let’s give the theory a more actionable spin. Your marketing communication should consistently convey what your product does and how a potential customer can benefit from that. For example, here’s a humble brag about our homepage that does the job of providing clear communication well:

Ahrefs' homepage positioning and CTA button below to sign up for Ahrefs

This plays a huge role in having new users who know what to expect from Ahrefs and how we can help them. We’re also confident that we can meet or, even better, exceed those expectations.

Churns often happen when you overpromise and underdeliver. Good positioning helps fix the first. So how do you figure out how to position your product?

Again, we’re back at market research that should tell you about the preferences of each of your market segments and what’s important for them. Adjust your positioning and communication based on this.

3. Make sure you target the right audience

Some customer segments churn more than others. You saw the brutal contrast between Cloudflare (with 36% churn) and Fastly (with 0.7% churn). In an ideal world, you’d be spending most of your resources on reaching audiences that allow for product-market fit.

In other words, you can decrease your churn rates if you get more qualified visitors to your website. This especially applies to the middle and bottom parts of the marketing funnel.

Most people probably associate the word “target” with advertising. You can be visible at more relevant places, narrow down targeting options in advertising platforms, etc. That’s pretty straightforward.

But you can also improve the quality of your organic traffic. It influences all parts of the funnel and is a major traffic driver for many companies.

The key to this is solid keyword research. Your best content opportunities are found in topics with high traffic potential, low keyword difficulty, and high business value that’s about naturally plugging your product. However, in reality, you’ll almost never find a keyword that meets all three criteria, so you’ll have to make compromises.

For example, the keyword “churn rate” has a solid traffic potential and a so-so KD score (for our website):

It also provides a few opportunities to naturally mention Ahrefs as a solution to some of the problems here. See what I did right now?

4. Better sales and customer service experience

The experience you have with the customer-facing staff makes a big difference in how you perceive a product, service, or brand. Just think about your best hotel or restaurant experience, how you felt there, and how much of that experience was influenced by great customer service.

This principle can apply to any service you’re subscribed to. I once worked for a B2B company that made “best customer experience” as one of its USPs (unique selling points). Customers truly cherished that, especially if they had so-so or bad experiences with that company’s competitors.

What’s more, even if a customer thinks about churning, a great sales or customer service representative can save the day.

Here are a few suggestions to improve direct communication with your prospects and customers:

  • Have communication guides or SOPs that your staff adheres to
  • Implement an evaluation and feedback system for your customer-facing teams
  • Build a product that your sales and customer service teams truly believe in and like
  • Make sure to not shoot your staff in the foot, e.g., don’t make huge changes on Friday or plan outages for busy periods
  • Be a good employer

5. Offer a trial or freemium version of your product

Yes, there are still subscription-based companies that don’t let you try their product without any commitments. This is especially true for enterprise products.

The objective of a trial or freemium is to meet or even exceed a prospect’s product expectations. Making your prospects confident in their decisions when they’re about to make the conversion pays off in the context of higher LTV and lower churn.

An important takeaway here is you can make people try your product way before they’re ready to sign up. Our keyword generator, for example, is one of many free SEO tools we offer:

Excerpt of Ahrefs' "free keyword generator" page; some text and then below is a picture of Phrase match report

People looking up keywords that lead to this page aren’t often well-versed in what SEO toolsets like Ahrefs have to offer. But providing free solutions to problems higher up the funnel makes them familiar with our tools one step at a time.

A similar use case is our free Ahrefs Webmaster Tools. It provides SEO data, insights, and recommendations that are useful and actionable even for beginners. After a few weeks or months of using these products, the beginner may consider stepping up their SEO game and signing up for the full version.

But it’s difficult to make SEO beginners experience the full potential of our tools right away. This leads us to…

6. Improve onboarding experience

The best way to keep a customer is to show them how they can squeeze the most out of your product as soon as possible. This hugely depends on the complexity of your product, so I’ll show you how we do it. (By the way, I already mentioned that our all-in-one SEO toolset can be complex and overwhelming for a beginner.)

We start by sending an email that sets the stage for diving deeper into each tool:

Ahrefs' onboarding email. "Welcome" video above and list of main tools hyperlinked for easy access to more information

OK, an onboarding sequence of emails is a common practice. Let’s level up.

We have an extensive academy of video courses going through every nook and cranny of the toolset, showing you how to crush SEO:

Ahrefs Academy page with Sam's picture and link to each course

And if that’s not enough, all of our tools and reports contain explanations, tooltips, and how-to guides so that you can apply the best practices right away:

7. Provide great product education resources

This is related to the previous point but applied to the whole marketing funnel. Product education is at the forefront of our communication strategy. And there’s one thing we know for sure: You can’t over-educate your audience about the product. There are countless ways to use Ahrefs, and we’re glad that even independent experts share their tips:

The more complex your product is, the more you should prioritize education in your marketing communication.

Generally, our prospects already know Ahrefs pretty well before signing up. We took this to the extreme and even discouraged some people from signing up for our now-discontinued $7 trial:

Quote by Tim Soulo

We can afford this claim since we produce product-led content and educate our readers on how Ahrefs can help them solve hundreds of SEO and marketing problems.

Use every channel possible to distribute your product education resources. Here’s a list of all the channels we own and use for product education (feel free to take inspiration from them):

  1. Newsletter
  2. Ahrefs social media accounts + our personal accounts
  3. Ahrefs FB Insider group
  4. Ahrefs blog
  5. Ahrefs YouTube channel
  6. Ahrefs Academy
  7. Ubiquitous how-to guides and tooltips across the tool

8. Keep on improving your product

You can have the best product in your niche, but there will always be a huge list of features and improvements you can work on. Getting a new customer who assesses that you have the best product for them is great. But that favorable opinion can change in months or years to come if you rest on your oars.

There are three ways to guide your product roadmap:

  1. Collect and evaluate customer feedback (we do this partially in public)
  2. Monitor what the market wants (on social media, forums, industry events)
  3. Consult with experts using the product

9. Track and improve Net Promoter Score (NPS)

Remember the point about the influence of churn rates on your WOMM? NPS is the best proxy for improving both churn rate and WoMM.

NPS represents customer satisfaction and loyalty based on how likely they are to recommend your product or service to others.

You’ve surely encountered many NPS surveys already. Often, they look like this:

NPS survey ranging from 1 to 10; 1 being "not likely to recommend Revolut" and 10 being "extremely likely to recommend Revolut"

The score the user selects dictates whether they’re a detractor, passive, or promoter:

Scale from 1 to 10. Less than 6 are detractors. 7 and 8 are passives. 9 and 10 are promoters

The NPS score is then calculated by subtracting the percentage of detractors from the percentage of promoters. It can range between ‑100 and 100. Anything above zero means that you have more promoters than detractors.

Most types of software that manage these surveys for you will also calculate the NPS. Generally speaking, an NPS score above 70 is considered exceptionally good. But always check benchmarks for your industry, as they may be much lower.

Improving your NPS will most likely decrease your churn and vice versa. Do note the tactics for achieving these objectives are interchangeable. NPS is just another method for tracking your progress and gaining more insights.

Final thoughts

Now, as we’re approaching the end, I want to mention a tactic that can decrease your churn but will most likely hurt your brand and reputation in the long run. And that’s making your subscriptions difficult to cancel. Don’t do this. Make your sign-up and cancellation processes clear and frictionless.

And remember this: A certain percentage of churn rate is completely fine and natural. Don’t obsess over the metric if you’re already doing well against the industry benchmarks.

Here’s wishing you lower churns and higher growth! If you’ve got any questions, ping me on Twitter.





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How to Block ChatGPT From Using Your Website Content

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How to Block ChatGPT From Using Your Website Content

There is concern about the lack of an easy way to opt out of having one’s content used to train large language models (LLMs) like ChatGPT. There is a way to do it, but it’s neither straightforward nor guaranteed to work.

How AIs Learn From Your Content

Large Language Models (LLMs) are trained on data that originates from multiple sources. Many of these datasets are open source and are freely used for training AIs.

Some of the sources used are:

  • Wikipedia
  • Government court records
  • Books
  • Emails
  • Crawled websites

There are actually portals and websites offering datasets that are giving away vast amounts of information.

One of the portals is hosted by Amazon, offering thousands of datasets at the Registry of Open Data on AWS.

Screenshot from Amazon, January 2023

The Amazon portal with thousands of datasets is just one portal out of many others that contain more datasets.

Wikipedia lists 28 portals for downloading datasets, including the Google Dataset and the Hugging Face portals for finding thousands of datasets.

Datasets of Web Content

OpenWebText

A popular dataset of web content is called OpenWebText. OpenWebText consists of URLs found on Reddit posts that had at least three upvotes.

The idea is that these URLs are trustworthy and will contain quality content. I couldn’t find information about a user agent for their crawler, maybe it’s just identified as Python, I’m not sure.

Nevertheless, we do know that if your site is linked from Reddit with at least three upvotes then there’s a good chance that your site is in the OpenWebText dataset.

More information about OpenWebText is here.

Common Crawl

One of the most commonly used datasets for Internet content is offered by a non-profit organization called Common Crawl.

Common Crawl data comes from a bot that crawls the entire Internet.

The data is downloaded by organizations wishing to use the data and then cleaned of spammy sites, etc.

The name of the Common Crawl bot is, CCBot.

CCBot obeys the robots.txt protocol so it is possible to block Common Crawl with Robots.txt and prevent your website data from making it into another dataset.

However, if your site has already been crawled then it’s likely already included in multiple datasets.

Nevertheless, by blocking Common Crawl it’s possible to opt out your website content from being included in new datasets sourced from newer Common Crawl data.

The CCBot User-Agent string is:

CCBot/2.0

Add the following to your robots.txt file to block the Common Crawl bot:

User-agent: CCBot
Disallow: /

An additional way to confirm if a CCBot user agent is legit is that it crawls from Amazon AWS IP addresses.

CCBot also obeys the nofollow robots meta tag directives.

Use this in your robots meta tag:

<meta name="robots" content="nofollow">

Blocking AI From Using Your Content

Search engines allow websites to opt out of being crawled. Common Crawl also allows opting out. But there is currently no way to remove one’s website content from existing datasets.

Furthermore, research scientists don’t seem to offer website publishers a way to opt out of being crawled.

The article, Is ChatGPT Use Of Web Content Fair? explores the topic of whether it’s even ethical to use website data without permission or a way to opt out.

Many publishers may appreciate it if in the near future, they are given more say on how their content is used, especially by AI products like ChatGPT.

Whether that will happen is unknown at this time.

More resources:

Featured image by Shutterstock/ViDI Studio



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Google’s Mueller Criticizes Negative SEO & Link Disavow Companies

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Google's Mueller Criticizes Negative SEO & Link Disavow Companies

John Mueller recently made strong statements against SEO companies that provide negative SEO and other agencies that provide link disavow services outside of the tool’s intended purpose, saying that they are “cashing in” on clients who don’t know better.

While many frequently say that Mueller and other Googlers are ambiguous, even on the topic of link disavows.

The fact however is that Mueller and other Googlers have consistently recommended against using the link disavow tool.

This may be the first time Mueller actually portrayed SEOs who liberally recommend link disavows in a negative light.

What Led to John Mueller’s Rebuke

The context of Mueller’s comments about negative SEO and link disavow companies started with a tweet by Ryan Jones (@RyanJones)

Ryan tweeted that he was shocked at how many SEOs regularly offer disavowing links.

He tweeted:

“I’m still shocked at how many seos regularly disavow links. Why? Unless you spammed them or have a manual action you’re probably doing more harm than good.”

The reason why Ryan is shocked is because Google has consistently recommended the tool for disavowing paid/spammy links that the sites (or their SEOs) are responsible for.

And yet, here we are, eleven years later, and SEOs are still misusing the tool for removing other kinds of tools.

Here’s the background information about that.

Link Disavow Tool

In the mid 2000’s there was a thriving open market for paid links prior to the Penguin Update in April 2012. The commerce in paid links was staggering.

I knew of one publisher with around fifty websites who received a $30,000 check every month for hosting paid links on his site.

Even though I advised my clients against it, some of them still purchased links because they saw everyone else was buying them and getting away with it.

The Penguin Update caused the link selling boom collapsed.

Thousands of websites lost rankings.

SEOs and affected websites strained under the burden of having to contact all the sites from which they purchased paid links to ask to have them removed.

So some in the SEO community asked Google for a more convenient way to disavow the links.

Months went by and after resisting the requests, Google relented and released a disavow tool.

Google cautioned from the very beginning to only use the tool for disavowing links that the site publishers (or their SEOs) are responsible for.

The first paragraph of Google’s October 2012 announcement of the link disavow tool leaves no doubt on when to use the tool:

“Today we’re introducing a tool that enables you to disavow links to your site.

If you’ve been notified of a manual spam action based on ‘unnatural links’ pointing to your site, this tool can help you address the issue.

If you haven’t gotten this notification, this tool generally isn’t something you need to worry about.”

The message couldn’t be clearer.

But at some point in time, link disavowing became a service applied to random and “spammy looking” links, which is not what the tool is for.

Link Disavow Takes Months To Work

There are many anecdotes about link disavows that helped sites regain rankings.

They aren’t lying, I know credible and honest people who have made this claim.

But here’s the thing, John Mueller has confirmed that the link disavow process takes months to work its way through Google’s algorithm.

Sometimes things happen that are not related, no correlation. It just looks that way.

John shared how long it takes for a link disavow to work in a Webmaster Hangout:

“With regards to this particular case, where you’re saying you submitted a disavow file and then the ranking dropped or the visibility dropped, especially a few days later, I would assume that that is not related.

So in particular with the disavow file, what happens is we take that file into account when we reprocess the links kind of pointing to your website.

And this is a process that happens incrementally over a period of time where I would expect it would have an effect over the course of… I don’t know… maybe three, four, five, six months …kind of step by step going in that direction.

So if you’re saying that you saw an effect within a couple of days and it was a really strong effect then I would assume that this effect is completely unrelated to the disavow file. …it sounds like you still haven’t figured out what might be causing this.”

John Mueller: Negative SEO and Link Disavow Companies are Making Stuff Up

Context is important to understand what was said.

So here’s the context for John Mueller’s remark.

An SEO responded to Ryan’s tweet about being shocked at how many SEOs regularly disavow links.

The person responding to Ryan tweeted that disavowing links was still important, that agencies provide negative SEO services to take down websites and that link disavow is a way to combat the negative links.

The SEO (SEOGuruJaipur) tweeted:

“Google still gives penalties for backlinks (for example, 14 Dec update, so disavowing links is still important.”

SEOGuruJaipur next began tweeting about negative SEO companies.

Negative SEO companies are those that will build spammy links to a client’s competitor in order to make the competitor’s rankings drop.

SEOGuruJaipur tweeted:

“There are so many agencies that provide services to down competitors; they create backlinks for competitors such as comments, bookmarking, directory, and article submission on low quality sites.”

SEOGuruJaipur continued discussing negative SEO link builders, saying that only high trust sites are immune to the negative SEO links.

He tweeted:

“Agencies know what kind of links hurt the website because they have been doing this for a long time.

It’s only hard to down for very trusted sites. Even some agencies provide a money back guarantee as well.

They will provide you examples as well with proper insights.”

John Mueller tweeted his response to the above tweets:

“That’s all made up & irrelevant.

These agencies (both those creating, and those disavowing) are just making stuff up, and cashing in from those who don’t know better.”

Then someone else joined the discussion:

Mueller tweeted a response:

“Don’t waste your time on it; do things that build up your site instead.”

Unambiguous Statement on Negative SEO and Link Disavow Services

A statement by John Mueller (or anyone) can appear to conflict with prior statements when taken out of context.

That’s why I not only placed his statements into their original context but also the history going back eleven years that is a part of that discussion.

It’s clear that John Mueller feels that those selling negative SEO services and those providing disavow services outside of the intended use are “making stuff up” and “cashing in” on clients who might not “know better.”

Featured image by Shutterstock/Asier Romero



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Source Code Leak Shows New Ranking Factors to Consider

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Source Code Leak Shows New Ranking Factors to Consider

January 25, 2023, the day that Yandex—Russia’s search engine—was hacked. 

Its complete source code was leaked online. And, it might not be the first time we’ve seen hacking happen in this industry, but it is one of the most intriguing, groundbreaking events in years.

But Yandex isn’t Google, so why should we care? Here’s why we do: these two search engines are very similar in how they process technical elements of a website, and this leak just showed us the 1,922 ranking factors Yandex uses in its algorithm. 

Simply put, this information is something that we can use to our advantage to get more traffic from Google.

Yandex vs Google

As I said, a lot of these ranking factors are possibly quite similar to the signals that Google uses for search.

Yandex’s algorithm shows a RankBrain analog: MatrixNext. It also seems that they are using PageRank (almost the same way as Google does), and a lot of their text algorithms are the same. Interestingly, there are also a lot of ex-Googlers working in Yandex. 

So, reviewing these factors and understanding how they play into search rankings and traffic will provide some very useful insights into how search engines like Google work. No doubt, this new trove of information will greatly influence the SEO market in the months to come. 

That said, Yandex isn’t Google. The chances of Google having the exact same list of ranking factors is low — and Google may not even give that signal the same amount of weight that Yandex does. 

Still, it’s information that potentially will be useful for driving traffic, so make sure to take a look at them here (before it’s scrubbed from the internet forever).

An early analysis of ranking factors

Many of their ranking factors are as expected. These include:

  • Many link-related factors (e.g., age, relevancy, etc.).
  • Content relevance, age, and freshness.
  • Host reliability
  • End-user behavior signals.

Some sites also get preference (such as Wikipedia). FI_VISITS_FROM_WIKI even shows that sites that are referenced by Wikipedia get plus points. 

These are all things that we already know.

But something interesting: there were several factors that I and other SEOs found unusual, such as PageRank being the 17th highest weighted factor in Yandex, and the 19th highest weighted factor being query-document relevance (in other words, how close they match thematically). There’s also karma for likely spam hosts, based on Whois information.

Other interesting factors are the average domain ranking across queries, percent of organic traffic, and the number of unique visitors.

You can also use this Yandex Search Ranking Factor Explorer, created by Rob Ousbey, to search through the various ranking factors.

The possible negative ranking factors:

Here’s my thoughts on Yandex’s factors that I found interesting: 

FI_ADV: -0.2509284637 — this factor means having tons of adverts scattered around your page and buying PPC can affect rankings. 

FI_DATER_AGE: -0.2074373667 — this one evaluates content age, and whether your article is more than 10 years old, or if there’s no determinable date. Date metadata is important. 

FI_COMM_LINKS_SEO_HOSTS: -0.1809636391 — this can be a negative factor if you have too much commercial anchor text, particularly if the proportion of such links goes above 50%. Pay attention to anchor text distribution. I’ve written a guide on how to effectively use anchor texts if you need some help on this. 

FI_RANK_ARTROZ — outdated, poorly written text will bring your rankings down. Go through your site and give your content a refresh. FI_WORD_COUNT also shows that the number of words matter, so avoid having low-content pages.

FI_URL_HAS_NO_DIGITS, FI_NUM_SLASHES, FI_FULL_URL_FRACTION — urls shouldn’t have digits, too many slashes (too much hierarchy), and of course contain your targeted keyword.

FI_NUM_LINKS_FROM_MP — always interlink your main pages (such as your homepage or landing pages) to any other important content you want to rank. Otherwise, it can hurt your content.

FI_HOPS — reduce the crawl depth for any pages that matter to you. No important pages should be more than a few clicks away from your homepage. I recommend keeping it to two clicks, at most. 

FI_IS_UNREACHABLE — likewise, avoid making any important page an orphan page. If it’s unreachable from your homepage, it’s as good as dead in the eyes of the search engine.

The possible positive ranking factors:

FI_IS_COM: +0.2762504972 — .com domains get a boost in rankings.

FI_YABAR_HOST_VISITORS — the more traffic you get, the more ranking power your site has. The strategy of targeting smaller, easier keywords first to build up an audience before targeting harder keywords can help you build traffic.

FI_BEAST_HOST_MEAN_POS — the average position of the host for keywords affects your overall ranking. This factor and the previous one clearly show that being smart with your keyword and content planning matters. If you need help with that, check out these 5 ways to build a solid SEO strategy.

FI_YABAR_HOST_SEARCH_TRAFFIC — this might look bad but shows that having other traffic sources (such as social media, direct search, and PPC) is good for your site. Yandex uses this to determine if a real site is being run, not just some spammy SEO project.

This one includes a whole host of CTR-related factors. 

CTR ranking factors from Yandex

It’s clear that having searchable and interesting titles that drive users to check your content out is something that positively affects your rankings.

Google is rewarding sites that help end a user’s search journey (as we know from the latest mobile search updates and even the Helpful Content update). Do what you can to answer the query early on in your article. The factor “FI_VISITORS_RETURN_MONTH_SHARE“ also shows that it helps to encourage users to return to your site for more information on the topics they’re interested in. Email marketing is a handy tool here.

FI_GOOD_RATIO and FI_MANY_BAD — the percentage of “good” and “bad” backlinks on your site. Getting your backlinks from high-quality websites with traffic is important for your rankings. The factor FI_LINK_AGE also shows that adding a link-building strategy to your SEO as early as possible can help with your rankings.

FI_SOCIAL_URL_IS_VERIFIED — that little blue check has actual benefits now. Links from verified accounts have more weight.

Key Takeaway

Yandex and Google, being so similar to each other in theory, means that this data leak is something we must pay attention to. 

Several of these factors may already be common knowledge amongst SEOs, but having them confirmed by another search engine enforces how important they are for your strategy.

These initial findings, and understanding what it might mean for your website, can help you identify what to improve, what to scrap, and what to focus on when it comes to your SEO strategy. 

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