Can you calculate SEO ROI? The answer is... kind of
In business, you want to invest in the right things. Things that will make you money. A return on investment (ROI).
Some ROI is easy to calculate.
Spend money on Google or Facebook ads, which will tell you your ROI. Do influencer marketing with a discount code, and you can track how many people use the code.
But, there are some things you need to invest in where ROI is not easily calculated.
SEO is one of them.
What metrics matter when measuring SEO?
Keywords have long been the measure of SEO success.
Many SEO agencies will have monthly SEO services based on how many keywords you want to be optimised.
Generally, the going rate would be $1000 per month to optimise 10 keywords.
But the issue with this is:
They could be targeting a keyword that isn’t actually going to translate into more sales.
Their measure of success is based on how high they can get your keyword ranking. But a high-ranking keyword doesn’t guarantee sales and enquiries. There are still 2 more steps; getting someone to click on your website and, once they’re on, getting someone to convert.
Focusing so much on rankings completely takes away from customer experience. And customer experience is a key part of SEO.
So what else should you be focusing on?
eCommerce SEO success metrics
Organic traffic – How many people come to the website from Google?
Conversion rate – The number of people that purchase is divided by the number of people that come to the page. This shows if you’re getting the right customers onto your site.
Revenue – Self-explanatory
Service-based SEO success metrics
Organic traffic – How many people come to the website from Google?
Bounce rate – The percentage of visitors to a particular website who navigate away from the site after viewing only one page.
Time on page – How long customers spend on a page. Reviewing this metric will depend on the page it’s measured on.
Form submissions/Goal completions – How many times someone submits a form or achieves a goal. This shows if you’re getting the right clients to your site.
So, these can all be measured on Google Analytics. If you want to see how your website is doing on the Google Search results, look at these metrics on Google Search Console.
Impressions – The number of times any URL from your site appeared in search results viewed by a user.
Clicks – The number of clicks on your website URLs from a Google Search results page
Clickthrough rate – A ratio showing how often people who see your listing end up clicking it.
How to calculate SEO ROI for eCommerce
This is quite easy if you have revenue tracking set up in Google.
Navigate to acquisition > organic traffic and look at the revenue.
Now, if you’re paying someone to do your SEO, you can work out the ROI with this equation:
Revenue / Cost of SEO
Example: You’re paying an agency $12,000/year, and you see that you made $100,000 worth of sales from organic traffic.
$100,000 / 12,000 = 8.33
So for every $1 you invest in SEO, you get $8.33 back.
How to calculate SEO ROI for service-based businesses
This is where it’s a little trickier.
For a few reasons.
The main one is that you don’t make your “sale” on your website. You might speak to a lead several times before they pay you, and a lot can happen between them contacting you and them paying your invoice.
So if you invest in SEO for your service-based business, here’s what you need to do.
In Google Analytics, navigate to Admin > View > Goals. You want to choose a custom goal and assign a monetary value.
It could be the average cost of a service or the customer lifetime value (the average spend that a client makes with your business over time).
This is the equation you’ll need.
Customer Lifetime Value x Lead Conversion Rate
Lead conversion rate is the percentage of leads you generate that turn into clients).
Let’s say most clients spend $5,000 with you, and for every 5 leads you get, 1 becomes a client, so your conversion rate is 20%. So technically, every enquiry you get is “worth” $1000.
You can then grab the value of organic leads generated by heading to:
Conversions > Goals > Overview
Then, filter by organic traffic and take the ‘Goal Value.’
Now the equation is this – (Value of Conversions – Cost of Investment) / Cost of Investment
Example: You’re paying an agency $12,000 a year. You see that your organic traffic has brought in $40,000 worth of leads.
($40,000 – $12,000)/$12,000 = 2.33
So for every $1 you spend on SEO, you get $2.33 in return.
Of course, this is still an estimate, and there are a number of random reasons why this equation wouldn’t make sense in your situation, but it’s the closest you can get to figuring out ROI for your service-based business.
What can affect SEO ROI calculations?
Remember that converting is not a linear process. Most people need to interact with a brand around 20-30 times before they convert.
So what happens if someone comes across your business on Google, finds you on Instagram and navigates to your website, Googles your brand name a few days later and then a week after that, clicks on your Google ad and converts?
By default, Google Analytics uses last-click attribution, so the sale is attributed to whatever a customer clicked on last.
In this instance, Google ads would get the glory when it was actually organic search that brought them in first.
This is where you need to look at assisted conversions. Navigate to Conversions > Multi-Channel Funnels > Assisted Conversions, and you’ll see when organic traffic played a part in getting a conversion.
Why SEO ROI doesn’t tell the whole success story
There are some SEO benefits that can’t be measured in dollar values.
SEO is also about brand building.
Improving how your customers feel when they interact with your website. Providing them with valuable and relevant information. Increasing your authority and building trust.
All of these contribute to how people perceive your brand, and if you do it right, this is the advantage you’ll have over your competitors.
Of course, you can’t directly measure when someone reads a blog post on your website, increasing their perception of you as an authority in your space. You can’t directly measure when someone has a great experience on your site and then goes and tells their friends and family about your business.
But these are still just as important as when someone Googles your service, your website shows up, and they convert.
How do I know if SEO is a good investment for my business?
Every website should have a basic level of SEO optimisation.
But ongoing SEO services aren’t for every business. And there are some things that can affect whether SEO would be a good investment. These include:
An extremely competitive market where building a community on Instagram would be better than trying to compete for high search volume but high-difficulty keywords.
You sell products or services with a small profit margin.
Your ideal audience wouldn’t be looking for you on Google.
You can still use SEO to help your business, but it might not require a standard approach.
Of course, if you really want to know whether SEO is a good investment for your business, you can ask us! We believe in a holistic approach to SEO where we increase your online visibility and attract your audience rather than focusing on metrics that don’t make a difference to your brand or bottom line.
Check out our SEO services to learn more about what we do and how we do SEO differently.
Remi, Sunday Best Digital founder
