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What’s the ROI of SEO?

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by Louise Blakely in Search Engine Optimisation
THE ROI OF SEO

When it comes to choosing an online marketing strategy, of course you need to do your research first.

Whether you’re going to get someone else to do it or do it yourself, it will take a time or money investment and you want to make sure it will be worth it before you get started…am I right?

While nothing is guaranteed with ANY type of online marketing strategy, SEO is proven as a really effective way to get more customers, and it has been around for a long time. In fact, SEO has the power to drastically grow a business.

And contrary to some of the scaremongers out there, it’s not going anywhere anytime soon.

Because I have an online course on SEO (SEO SORTED), I often get asked what kind of ROI you can expect from SEO, before people decide to move forward or not.

ROI of SEO

The answer isn’t always an easy one. Because with any question on ROI, there isn’t one answer that anyone can pull out of the hat. It all depends on three things:

  1. How much your product costs.
  2. How much new traffic you can get from SEO.
  3. What your conversion rates are.

Before we get dig into these, I want to mention one thing. I believe that every business that has a website should at the minimum do basic SEO on their site, before even thinking about ROI.

That means that you should know at least some keywords your business should be ranking for, have done some basic keyword research to see if people are actually using these keywords, and have added these to the metadata on your website. (You can learn how to do this in my free 5 day SEO Challenge.)

This is just basic website maintenance, along with making sure that you’ve got no broken links and people can use your website easily with no issues.

But once you’ve got that done, you might like to dig into what kind of return you can expect if you put more effort or investment into optimising your website for the search engines.

So let’s look at the three factors I mentioned earlier.

1. Your pricing

The amount of ROI that you can expect to get will vary greatly based on what your product is currently worth, and how much volume you sell of it.

For example, ROI will most likely be different from a business coach who offers a $10,000 six-month package, vs. an e-commerce store who’s AOV (average order value) is $30.

The e-commerce store owner would have to get a lot more traffic to make a similar return as the business coach.

However, it’s also more likely that the e-commerce website can get more traffic. Usually their websites have got a lot of pages and can potentially rank for a lot more keywords.

So this also depends on how much traffic you can expect to get, as well as what your conversion rates are…so let’s dig into those things.

2. How much extra traffic can you get from SEO?

Another vital part of the equation is how much extra traffic you can expect to get from focusing your efforts on SEO.

This depends on a lot of variables, such as how big your market is and what share of that market’s traffic you could expect to gain if you were to start ranking in a top position.

If only 20 people a month are searching for a keyword that you rank number 1 for, and you got 33% of that traffic, that’s only 7 clicks a month.

In contrast, if there are 9500 searching for that keyword each month, and that number 1 spot got clicked on by 33% of those people, that’s 3,135 extra people visiting your site every month.

Of course a keyword with more people searching for it is likely to be more competitive.

But think about the possibility of improving your ranking for dozens of keywords, and even in small increments your website traffic is going to start increasing. And the longer you do SEO, the more keywords you will rank for…until you’re ranking for hundreds of keywords.

So if you were to focus on SEO and make it your primary strategy for the next 6-12 months, it’s realistic that you could increase your traffic numbers by a significant amount per day. And the good thing about this, once you’ve got a good ranking, it’s doesn’t require as much upkeep as other marketing strategies.

But for this purpose, there is no one size fits all rule. If you want to look at it for your site, I suggest using a tool like SEMRush.

3. Your website conversion rate

The final part of the puzzle is figuring out what people do once they hit your website.

Your ultimate goal is for a website visitor to take some kind of action, and it’s up to you to make that as easy as possible for them.

conversion rates

A good website will tell visitors exactly what it is you offer, and give them the pathway to be able to take the next step, if they wish to do so.

The great thing about knowing your conversion rate and working to improve it is going to increase the performance of your website, whether the traffic is coming from Google or elsewhere.

Back to the business coach example, you might want them to sign up to a freebie and get on your email list, so they can go into your sales funnel.

Or if you’re in e-commerce and have a lower priced product, you may want them to make a purchase.

Whatever action it is you want people to make, you want to figure out what your current conversion rate is. That is, how many visitors currently visit your website, and how many take the action that you want them to take.

The calculation is: (Total Conversions / Total Visitors or Clicks) x 100.

Let’s look at the business coach example in more depth. Your goal is to gather as many leads from your website as possible, so that they go into your email sales funnel. Currently you have a website conversion rate of 30% ie. out of every 100 people that visit your website, 30 sign up to become a lead.

If you have done your numbers and know that one lead has a value of $50 for your business, then you can easily start to work out an ROI of your SEO. If you were able to get 50 extra visitors a day from Google after you’ve invested in SEO, and 30% of those were to sign up to become a lead, then your ROI is going to be $1500/day, or $45,000/month, or $547,500/year 😲

Here’s the workings:

100 extra visitors/day, with a 30% conversion rate to leads = 30 new leads.
30 new leads x value of $50 = $1500/day.

Another example is an ecommerce site.

If your AOV (average order value) is $130, and your conversion rate from visitor to buyer is 3%. You’re able to increase your traffic to your website with SEO by getting 50 new people to your website every day from Google.

Let’s work it out:

50 extra visitors/day, with a 3% conversion rate to purchase, with AOV of $130 = $195/day.

An extra $195/day is an additional $5850/month, and $71,175/year!

How to track your ROI from SEO

It’s really easy to track conversions from SEO, but I find that most small business owners aren’t doing it.

All you need is a Google Analytics account, where you can set up a goal. This goal can be monetary, or you can even measure leads or any sort of enquiry. The good news is that it’s super simple to set up (and there is a blog coming on this soon).

Once it’s set up, it’s something you can see at a glance – exactly how much revenue or value you’ve generated from what traffic. Perfect 👌

If you’ve read this far, it’s fair to say that predicting an ROI from SEO is fairly nuanced. But this gives you the tools to work it out for your business.

6 Comments
  1. Alison says:

    Love love love!

    1. Thanks Alison – what was your biggest takeaway?

  2. Lynda Fulton says:

    Fab!

    1. Glad you enjoyed the post Lynda!

  3. Lynda Fulton says:

    I’m going to go through my notes again today of your 5 day challenge. That was an amazing resource. I’ve changed my domain name and email address, so I guess I’m back to square 1?

    1. Not necessarily (but always a good idea to revisit the challenge). If you identified other keywords during the challenge that aren’t in your domain name, you’ll be good for those. Just make sure all of the old domain URL’s are redirected to the new domain URL’s, or you’ll have a whole lot of broken links.

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