ROI and SEO: two acronyms that don’t inherently go together. Search engine optimization is a difficult field for many entrepreneurs and business owners to grasp. They know that it’s essential for ranking well online and that a digital marketing presence is no longer optional. But understanding how the many different factors that are now part of the online marketing world, from content creation to linkbuilding to social media marketing, fit together and quantifying how these activities help your bottom line can be a challenge. As we head into this year’s final quarter and businesses are planning their SEO budgets for 2015, here’s a closer look at how to measure and explain the return on investment you’re getting for SEO services.
Differentiate between SEO progress and bottom line ROI
There are many different ways to discuss an SEO campaign. You can discuss inputs, such as hours spent optimizing a website or building relationships online. It’s possible to look at outputs, such as content created. There’s also the role of helpful data inputs such as whether your position has improved in Google for target keywords or whether you’re seeing increased traffic to your site through Google Analytics. But what always speaks to managers that are skeptical of the impact of marketing tactics? Numbers that relate specifically to your company’s bottom line.
Four types of numbers that show true ROI
SEO metrics and how much time your team has spent working can give you assurances that important tasks are being completed and that you’re seeing improvements in marketing performance. But there are a number of areas which successful SEOs and inbound marketers always rely on to show real progress:
Lead generation: Small businesses often rely on lead generation to keep their cash flow up and their companies steadily growing. This is especially true for service businesses such as law firms, doctors, and accountants. Look for improvements in your lead generation flow. Prior to launching your campaign, how many leads did you generate per week or per month? What do those numbers look like today? Growth in lead generation shows you that online marketing is becoming an important element of growing your business and leads will continue to increase over time as the marketing campaign matures.
Measuring leads can be done through specific “events,” such as a prospective customer filling out a form for more information or joining your mailing list. Goals focus more on overall levels of lead generation, such as gaining ten new leads per week.
Revenue: The proof is in the pudding, as they say. Overall, your levels of revenue indicate how healthy your business is. Revenue growth is one of the indicators that business owners love to see in connection with any marketing initiative. Increases in revenue demonstrate an important factor however: it’s not just about attracting more leads. You’re also attracting highly qualified leads, who are converting into customers and continuing to maintain relationships with your company. These kinds of SEO investments are easy to see as clear wins.
Cost per lead: How much does it cost you to attract each lead? One of the key benefits of SEO and inbound marketing is that the cost per lead is less expensive than outside sales or buying lists. Determining your cost per lead is as simple as dividing what you’re spending by the number of leads generated. For example, if a $1000 campaign generates 100 leads, then your cost per lead is $10. If each of these prospective leads spends $15 with your company, then you’re making a profit.
Average order value: If you’re selling products or services online, it’s also helpful to look at your average order value (AOV). Your AOV is an indication of how much people are buying from you when they make a purchase. The more effectively you optimize your site for conversions, the easier it is to get people to buy. If your customers’ average spend per order is increasing, then you’re on the right track with your on-site SEO efforts. What’s more, these improvements are even more valuable to your business because they help you extract more value from relationships that are already in place.
Determining the ROI of your SEO efforts doesn’t have to be difficult. In fact, a few simple calculations will show you how search engine optimization campaigns are growing your business, including a better flow of leads, higher revenues, and growing your average order value. Are you ready to put SEO to work for you growing your business? Contact us at Be Locally SEO today to learn more about how our team of search optimization experts can help you think strategically about your business, ROI and SEO.