When you’re working with businesses, it’s important to speak their language for effective communication. It may seem hard to quantify the value of SEO and all businesses want to know what the return on their investment (ROI) is going to be. There are many ways to value your service, and here’s a couple. One for starting out fresh and another for gauging improvement. 

How are Key Performance Indicators Used?

First you need to find a ‘key performance indicator’. This is going to change depending on the business you’re supporting. If it’s e-commerce, then product sales are an easy indicator. Lead generation is another indicator for most other businesses. For every X many leads you generate, a business will profit an estimated average amount. 

This can get complex, but ask the business you’re working with, “how do you measure success?” You’ll want to know at least two things. Ask how many leads convert into an average sale. And ask how much value is the average sale. If this is a young business, then this can change periodically based on its success. 

Once you have an idea of these, you can then set up a tracking element in Google Analytics to count contact form submissions or how many times a certain link is clicked. Just keep in mind some of these methods may work better than others. While designing this tracker, make sure to think critically about how the tracker might count incorrectly and try to mitigate for this as much as possible. 

How to Add Goals in Analytics:

https://analytics.google.com/

⚙️ Admin

Under the far right column:

Click "Goals" >> Add New Goal

Note: You can add a Value to Goals in Google Analytics. So if the client calculates that every lead gets them $100 on average, you can assign $100 to each goal completion and have the value inside Google Analytics.

Once that’s working properly, it’s as simple as taking the number of leads generated, and dividing that by how many leads on average to generate a sale. That gives us an estimate of the number of sales. Then multiply the number of sales by the average sale amount to find the  value added to the business. 

How to Measure ROI of SEO

The previous example is a simple way to measure ROI, and should be tracked from day 1 of working with a business. Word of warning, the next thing I’d like to get into is going to have a little more math, however it should help with calculating if certain efforts are worth putting in time or not. 

So say for example we have an e-commerce site, fidgetpoppers.com, selling an amazing niche $50 product. We’re ranked 3 for our high value ‘fidget popper’ keyword. According to Moz, organic click through rate (oCTR) is 7% on average for a 3rd position transactional keyword. (2nd is 11% and 1st is 22%). 

Our site’s traffic is roughly 14,272 visits per month. 7% of our traffic clicks through. For the sake of simple math, let’s say 1,000 of these are organic click throughs (oCTR) monthly for the specific KW we want to improve. If we say about 3% of these clicks will go on to become sales, we have a conversion rate of 3% (this is on the high end of average e-commerce %). Then remember we’re selling a $50 product. Brace yourselves, here comes the math.

oCTR Conv. Avg Value SEO Value Added

1,000 x 3% x $50 = $1,500/mo

You see, once we start establishing some of these numbers, and experimenting with different values in the formula, we can begin to see how much we stand to gain from our efforts. On average, e-commerce ROI is $2.75 for every $1 spent on SEO, however your mileage may vary. This isn’t an insert money, receive profit method. You must apply reasonable expectations and thought here.

If you found this helpful or would like to consult with us, please contact us here. Esseodigital is a digital marketing service providing an experience you’d expect from an agency at the price of a freelancer.