SEO – Calculating Return on Investment

Search engine optimization is an investment that takes time to yield results. This time period is variable depending on the quality of SEO services provided and competition. Based on these variables you can expect ranking time periods ranging anywhere from one to six months depending on desired rank position. Although during the early stages of SEO the website may not turn a profit but you can make an estimate of approximately how much money the website will make using R.O.I predictions. In this article we are going to go over the basic steps to predict R.O.I possibilities for your businesses website.

Traffic Research

The first step in predicting your return on investment is checking how much of your market is online. You can use a free tool provided by Google called Google Keyword Tool. Once you visit the tool, you can type in popular keywords related to your industry. For example, if you own a plumbing business in Tucson, the most common keywords are going to be “Tucson Plumber, Plumber Tucson, Tucson Plumbing, Plumbing Tucson and so on. Use the options to select “Exact match” or “Phrase Match” for accuracy and click “search”. For this example, we will use the keyword “Tucson Plumbing” which has approximately 400 searches each month. Generally with first position ranking you can expect 40% of this traffic to come to your website which is approximately 160 visitors.

Customer Value

Now that we have determined for one keyword how much traffic you will receive; you will now need to calculate a customers value.  If you average  customer is worth $300  and you have a 5% conversion ratio for visitors into customers you can expect to make $2400 a month from your website. Now this is only one keyword and if you rank for multiple keywords you can expect to make more from your website.

[infopane color="1" icon="0101.png"]Traffic x Conversion Ratio x Customer Value = R.O.I. [/infopane]

SEO Expenses vs Profits

Now that we have determined your possible R.O.I you can budget for how much to spend on SEO services. So if your SEO expenses are $500 a month and your potential profit is  $1500 a month then SEO would be a worth while investment for your business. At Rainbow SEO, we offer free consultations to predict your business R.O.I and advise whether or not SEO is a wise investment for your particular business. Click here to contact us for a free consultation.

 

About the Author

Trevor McCann

Author: Trevor McCann is the CEO and Chief Web Strategist of Rainbow SEO, LLC. He has years of experience dealing with virtually every scope of internet marketing.

2 Comments

  1. We can’t stress this enough: “Although during the early stages of SEO the website may not turn a profit.” Sites (especially if they are new) take a while to age and rank. With SEO you see progress over time, it isn’t a quick fix that will provide immediate results. Knowing this before embarking on an SEO strategy can help you plan and establish benchmarks to measure your efforts against.

    • Nick, thanks for reaffirming our views on R.O.I when it comes to SEO. I see lots of companies around making a lot of crazy promises. However, SEO is a long term investment and with that comes greater reward later on.

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