SEO ROI (Getting a Return on Your SEO Investment)

by | Nov 18, 2009 | San Francisco SEO, SEO Basics, SEO ROI, SEO Tutorial



So you’ve taken the steps to hire an SEO firm for your business website – lets say you are based out of San Francisco.  Whether you are trying to climb above those pesky Yelp reviews, generate more leads, or simply want to get more eyes on a new special, you wanted to take the proper steps to drive more relevant traffic to your site.



Once the SEO site modifications have been made, the blog implemented and the  social media efforts ongoing, how do you know if it’s been successful?  As a San Francisco business owner, what measures can you take to ensure that you are getting your money’s worth?  I’d like to review several metrics and tools that can be used to gauge the ROI (Return on Investment) for your SEO campaign.



Install Google Analytics



Google Analytics is the king of all analytics programs, allowing you to simply and effectively track incoming visitors to your site.  Installing Analytics is the first step to measuring the success of your SEO campaign.  You can view various pinpoint statistics such as what browsers your site visitors are using and what content sources they are coming from.



To gauge your SEO campaign’s effectiveness, a key Analytics trend to keep your eye on is the ‘Traffic Sources’ -> ‘Keywords’ -> ‘Non-Paid’.  This will let you know what search engines and keywords people are coming from, how long they spend on site, what pages they view, as well as more helpful info.



To install Google Analytics follow the instructions on their guide here.



Calculate the Average Lifetime Value of Your Customer




Depending on your type of business, a potential customer can vary in substance and value. If you are a San Francisco deli, a customer is essentially someone that visits your website and then decides to go to your deli and buys a sandwich.  So your customer value would be the price of a sandwich in addition to factors like repeat business and word of mouth.



If you sell a software as a service (SaaS) package that charges customers per month, a customer would be someone that goes to your website and then signs up for your service.   To evaluate the effectiveness of your SEO campaign, you need to determine how much this new customer is worth for your business over time (lifetime value).   This value will help you going forward in calculating the value of an organic visitor.



Calculate the Value of an Organic Visitor



Calculating the value of an organic visitor to your site can be helpful in determining your SEO ROI.

Example:  100 people visit your Software as a Service site organically (through search engines) over a period of time.  10% of these people submit their information to your contact form for a total of 10 people (leads).  Out of those 10 leads you close the deal with 10%, or 1 person (conversion).   Lets say the average lifetime value of your customer is $100 per month for an average of 24 months or $2400.

So what do you with this data? Based on your customer’s average lifetime value, your 100 initial visitors (which equaled 1 converted customer) translates into $2400 dollars or $24 per organic visitor.  This would mean each organic click from the search engines is worth $24 during this period of time.  Compare this return on investment to the amount you spent on specific SEO work during this same period of time.




Adwords Comparison




If you are already utilizing Adwords, you can easily compare how much you are spending per ad click vs. how much you are spending per organic click.  If you have conversion tracker installed on Adwords you should already know your cost per conversion.   If you are comfortable with this cost per conversion, you can determine that your cost per click (CPC) is in the right range as well.



Using Analytics, you can determine how many clicks you’ve received through organic search traffic over a given period of time for specific keywords.  Divide that number of clicks by the amount of capital you’ve spent on your SEO campaign and you have your organic cost per click.  Compare this CPC to your adwords CPC.



Keep in mind that comparing organic traffic to AdWords traffic is a rough way to estimate ROI as organic traffic generally has a higher conversion rate than Adwords  traffic.



Simpler Methods (like actually interacting with customers)



A simpler way to gauge the effectiveness of you SEO campaign is to talk to your customers.   Questions like ‘how did you find out about us’ can pay large dividends in evaluating the strength of your various marketing avenues.  If a good percentage of people are saying they Googled a specific keyword and found your site, you can be pretty sure that the SEO campaign has been successful thus far.