Too often still, companies are hesitant when it comes to using the services of an SEO. That is because they only see future expenses in this process. However, this is where they are wrong.
How to Measure ROI on SEO
A better-referenced site is a site that generates more traffic. Also, if there are more visitors, there is a good chance that sales will increase.
In other words, using SEO is indeed an investment that should allow you to generate profits. If you don’t want to go through all those challenging steps, you can get monthly SEO packages from a reputed agency. It will be a lot easier for you to track the performance of your website.
So, here is how to measure ROI on SEO strategy in just three steps.
Step 1: Collect Conversion Data
It isn’t easy to estimate the return on investment of an SEO strategy without having reliable data. The first thing to do is, therefore, to use a tool like Google Analytics.
It is particularly interesting since it is free – and configures your space to obtain valuable data.
Yes, the following will be data that can be useful for analyzing the ROI of an SEO strategy:
- The number of visits,
- The conversion rate,
- The number of transactions,
- The average basket or the turnover of your site
However, it is easy to know the number of sales made by an e-commerce site. But it is more difficult to estimate the value of a subscription to a newsletter or opening of an account. However, some websites have the sole purpose of generating leads.
When it comes to calculating the ROI of an SEO strategy on a site where there are no genuine transactions, there are some tricks. It will be essential to determine how much the actions carried out by Internet users are worth. At the end of the day, it is these prices that you are going to have to enter in Analytics. We explain how to do it:
Example of Calculating the Price of a Share
Let’s take the case of a subscription to your newsletter; how to promote it?
First, determine how many Internet users sign up each month (say 200). And then how many of those who signed up have used you for the services you offer (say 50). You then know the conversion rate of your newsletter (50/200 = 25%).
Let’s say that each new customer obtained through the newsletter has spent $ 80 to pay for your services. So you have pocketed $ 4000 (50 X 80).
To determine the value of the newsletter subscription, you now have to divide your sales by the number of subscribers (i.e., 4000/200 = 20 $). You now know how much you earn from subscribing to your newsletter.
Step 2: Analyze Conversion Data
To get a real insight into the ROI of an SEO strategy, you must collect data for a few long weeks. Indeed, SEO work performed by a Charlotte SEO company often takes a few weeks before really materializing both traffic and conversions.
Once you’ve let this time pass, grab the conversion data from your website and start analyzing the numbers. In particular, try to consult the turnover generated by organic traffic since it mainly impacts SEO.
Everything is then straightforward; do you see an increase in your turnover due to SEO work? If so, is this increase more significant than your investment with the provider? If this is still the case, you have made the right choice as your investment allows you to generate additional profits.
It’s not hard to see that if you’ve made more money than you invested, you’ve got a great deal.
Step 3: Calculating the ROI of an SEO Strategy
It is from the analysis of the conversion data, and you will be able to determine the ROI of an SEO strategy.
Just Apply the Following Formula
ROI = (Gain linked to the investment – the cost of the investment) / Cost of the investment X 100
Let’s take an example, your site generated 120,000 $ in sales before the SEO work which cost 20,000 $. Three months later, the same site generates $ 180,000, or $ 60,000 more. The ROI of the SEO strategy is then (60,000 – 20,000) / 20,000 X 100 = 200%.
The process of how to measure ROI on SEO is somewhat technical. And it can become particularly complex when it comes to valuing “actions” rather than products or services. However, it deserves to be done to avoid investing at a loss in the SEO of a site. Moreover, it will allow you to see how much an SEO expert can boost your online activity.