After conducting a website audit, many site owners decide to invest in SEO. Smart SEO can give you a major increase in organic website traffic, and by extension leads, clients, and revenue.
The main challenge with SEO campaigns is calculating ROI. While PPC ads generate quick and clear results, SEO conversion rates are more difficult to measure because SEO is a longer, more complex digital strategy. So how do you know if your investment in content, backlinks, and user experience is paying off? The following formula will help you measure SEO ROI.
Average SEO Conversion Rates
Leading industry sources estimate that SEO has a conversion rate of about 2.4%. It means that, out of 1000 visitors to your site, 24 on average will perform an action that you define as conversion—like filling a form, signing up for a newsletter, completing an order, or scheduling a consultation.
Calculating SEO ROI
While knowing your SEO conversion rates is useful, you’ll need to crunch a few more numbers to discover whether your SEO efforts are generating a profit.
First, multiply your organic traffic by conversion rate to calculate leads. For example, if your site gets an average of 10,000 visitors per month and your conversion rate is 2.5%, you have 250 leads.
Second, multiply leads by close rate to find out how many of these leads become clients. For instance, if 20% of the 250 people who scheduled a consultation ultimately hired your business or bought your product, you have 50 clients a month.
Next, look at your average revenue per client and find out your total monthly revenue. If you make an average of $100 per client, your monthly revenue would be $5,000.
Then calculate your profit by subtracting any ongoing business costs (labor, materials, shipping, taxes, etc.) from your revenue. For instance, if your business costs $1,000 a month to run, your profit would be $5,000 – $1,000 = $4,000.
Finally, consider how much you pay for SEO and subtract it from the profit. If your SEO costs $1,000 a month, SEO ROI = $4,000 – $1,000 = $3,000.
The Key to SEO Success
Keep in mind that SEO takes time. Even the most successful SEO campaign will usually take 3 to 6 months to start generating results. During this time, the formula above may show that you’re actually losing money on your SEO investment.
To harness the full power of SEO, budget for this initial period of growth while your web pages start generating more traffic and keep tracking SEO performance over time.
Start a Killer SEO Campaign and Measure SEO Performance With Results Digital
At Results Digital, we know how to create an SEO strategy that will put your business on the map. We target relevant long-tail keywords, optimize landing pages for top performance, and use advanced analytics tools to track SEO conversion rates. With our precise reports, you’ll know exactly how much ROI your SEO campaign is generating.
Contact us to schedule your SEO audit today.
