Step #3: Track and analyze your conversions
The setup varies on whether you are operating an e-commerce business or a lead-based business:
- E-commerce stores use tracking to pull data from their online transactions to measure their overall revenue.
- Lead-based businesses (service providers) need to set up conversion goals and assign average values to those goals in order to calculate overall revenue.
Methods for calculating the value of conversions vary from business to business. However, marketing analytics software is your foundation for pulling data here. If you have the right knowledge, you can pull out all the data you need from that one tool.
Step #4: Calculate your SEO ROI
Once you have the cost of investment and the value of your conversions, the formula is simple to put together:
- (VALUE OF CONVERSION – COST OF INVESTMENT) / COST OF INVESTMENT
Put into an actual example, let’s say that your SEO activities on a monthly basis amount to $100.000. And let’s say that your cost of investment on a monthly basis runs up a bill of $20.000. Now, let’s put that into our formula: ($100,000 – $20,000) / $20,000 = 4.
End line – for every dollar you invest in your SEO, you see a return of $4. Therefore, the ROI from SEO here would be 400% (4 x 100 to get a percentage). And there you have it – one of the most well-established ways to calculate SEO ROI for your business. Now that we’ve got that sorted, let’s take a look at some of the other methods that people use to calculate ROI.
10 different ways to calculate SEO ROI for your business
There are a lot of business owners out there that are skeptical when it comes to SEO because they aren’t seeing actual revenue from it. And the usual reasoning behind this attitude is that there are simply not enough sales to go with the increased organic traffic. However, this is a very grey area because it can be hard to determine where the obligations of SEO efforts end and where the role of your sales team comes into play.
One thing is certain – if you have a constant increase in organic traffic but a stagnant number of leads and conversions, something is off. And this is where sales efforts definitely play a role in the ways to calculate SEO ROI for your business. Once again, we go back to calculating your value of conversion. In this case, you would simply look at the sales where organic search delivered the last click or the actual sale.
2. Assisted conversions
So, if you look at the direct sales from organic visits, what happens to those that only arrived on the website, only to be converted through our sales efforts? Well, you can count those as assisted conversions and put them in a category of their own. You can look at the percentage of sales generated from end customers that arrived at your website organically.
Another one of your more obvious ways to calculate SEO ROI for your business is thought the overall number of organic leads and/or sales in comparison to past results and statistics. People are often too eager to put up rankings and traffic volume to showcase SEO success, but we’ve already explained how this does not necessarily lead to actual revenue.
4. Organic traffic
The train of thought here is that with an increase in your organic traffic, your conversions and/or sales should follow that trend. That being said, the process here is simple:
- Implement SEO
- Measure increases in organic traffic
- Use conversion optimization to generate leads and sales
- Measure the overall revenue that comes from these leads and sales, whether they choose to convert today or a month from now (more common for B2B companies).
The important task here is to establish whether the growth of your organic traffic correlated to the number of qualified leads that you convert.
5. Percentage of qualified leads from organic traffic
As we’ve just explained, an increase in organic traffic demands an increase in conversions to confirm that your SEO is performing well. However, not all organic traffic can be held to the same standards. If you want to get a more precise calculation of ROI from SEO for your business, you need to focus on qualified organic traffic. You can’t count organic traffic from keywords that have nothing to do with your SEO strategy or niche.
6. SEO forecast
While some marketers look at actual results, you have those that dabble in past predictions. What does this mean? Well, rather than simply looking at results from only your SEO efforts in the past three months, you look at the other scenario – no SEO. You use the growth and revenue data before implementing SEO to predict what the results would have been. You then compare those imaginary results with the ones that you have from implementing SEO. And you get another interesting way to put a number on your decision to opt for SEO.
7. Comparisons with other channels
Sometimes, you can gain a better idea of the revenue your SEO generates by comparing it with other digital marketing channels. Whether you are investing in paid advertising or SEO, social media or email marketing, you can compare it all with the right KPIs. Just consider the average cost of a single conversion throughout a specific time frame.
8. Form submissions
The thing to remember with SEO is that every piece of content counts and can contribute to the ROI for your business. And so, you need to take into consideration the landing pages and blogs that get visitors to fill out forms and become leads. Certain pages and blog posts drive more traffic, which results in more quote/demo or consultation requests. Based on the result of those contacts, you can take the overall revenue there and run it with the SEO investments you made.
9. Keyword mapping
If you are looking for out-of-the-box ways to calculate SEO ROI for your business, then mapping keywords by search volume is one of the ways to go about it. Certain keywords that are more competitive and popular bring higher traffic value for your company. And that results in more qualified leads that convert into profitable sales opportunities.
This is a prediction-based calculation, where you make estimations using benchmark click-through rates (CTRs) to calculate traffic projections. You then use an average conversion value and the overall conversion rate to forecast an ROI for a specific SEO campaign.
10. Average time on page
This would count as one of the more far-fetched methods for measuring SEO ROI for your business. Yes, when visitors spend longer amounts of time on certain pages, it sends a signal to Google that those pages have value to people. And it leads to a better user experience, which ultimately brings in more traffic and conversions. However, the entire concept focuses on a lot of long-term predictions. But it is definitely a way for a company to investigate the overall profitability of their SEO efforts, albeit they might have to wait for a while to measure it.