Running a business involves making some tough decisions about how to spend wisely and keep your costs efficient. When you are calculating your expenditure on hiring an agency to improve your SEO you want to know that you will be getting a good return on your investment (ROI).
How Boosting Your Ranking in SERPS Can Increase Your Profits.
Employing a good SEO strategy is designed to boost your rankings through a well thought out plan and the use of SEO tools that improve your website performance and visibility. To work out whether SEO is worth investing in, you need to identify the main key performance indicators. By calculating this in terms of click rate improvements and conversion rates you will have an idea of the financial benefits compared to your investment costs.
Let’s look at improving SEO Performance.
Improving SEO Performance
To improve a website’s ranking further in SERPs you would need to do some keyword research, competitive analysis and identify potential link targets. As well as providing excellent page content you would want to run some technical audits and earn some backlinks to take people to the product page.
Let’s imagine that using an SEO agency would cost the business about £179 a month. Is it worth it? To find out let’s compare some scenarios using the KPI of SERP ranking and click-through rate.
Ranking Third (Before additional SEO work)
A website ranking third for a relative search term will on average generate a click-through rate of about 7%. Let’s say that the 7% click-through rate generates an average of 500 organic click-throughs per month and then there is a 3% conversion rate on customers who reach the product.
If you multiply that figure by the purchase price of the product you will get an idea of the revenue possible from that search enquiry when ranking third. Let’s assume a price of £50 for a product.
500 x 3% x £50 = £750 income per month
Ranking Second (Additional SEO improvements)
So, if the SEO work has pushed the website to number two in the SERPs rankings, how will this affect the bottom line?
At number two you would expect an improved 11% click-through rate which would now draw 785 organic click-throughs each month. Let’s assume that the conversion rate remains at 3%, although in reality SEO improvements may raise this conversion rate too.
(500 + 285) x 3% x £50 = £1200 income per month
That’s an increase of £450 per month (£1200 – £750).
Even considering the cost of the SEO agency at £179 that leaves an increase in income of £271 per month.
Over a year that figure will total of £3252 in increased income.
Ranking First
What if the SEO improvements get your web page to rank first in search? This would increase the click-through rate to an average of 22% with a conversion rate again of 3%.
(500 + 1070) x 3% = £2350 income per month.
That’s an increased income of £1600 (£2350 – £750). Take away the SEO cost of £179 per month and that gives an increased income of £1421 per month compared to ranking third.
A total of £17052 per year in increased revenue for a relatively small investment and even if the costs of SEO improvements were higher it would still clearly be worth the price.
ROI – What do the results mean?
Using these calculations, you can see that the return on investment is high at about £2.75 profit per £1 spent.
To do your own calculations you would need to use your prices. This is easy enough for individual products, but it can be tricky for other types of business. Try substituting a monetary figure for those things to get a picture of the ROI.
The important thing is that the amount earned is higher than the investment made. In our example, the final income is higher than the cost of improving SEO which is exactly what you want to see.
Your starting point will be where you currently rank and what your current income is based on click-through rates and your conversion rate.
Generating figures for ROI
The easiest way to get the figures for your website is to use Google Analytics.
This is an easy and free way to look at how your website is performing. You can customise the settings to track your preferred actions such as scrolling down a page, clicking a button or making a purchase.
You can set your preferred time and you can add your sterling value to goals to monetise the results.
For products, it is even easier to analyse the performance of individual items and how they are performing each month.
Getting Ahead of your Competitors
Marketing experts say that investing in SEO is the premier factor in achieving more success. If your competitors are investing, then you will already be behind if you are not.
The SEO Journal suggested in May 2021 that $389 billion will be spent on digital marketing worldwide during 2021 and yet less than half of all small businesses invest in SEO services. This is despite the fact that almost 100% of purchases are made after carrying out an organic search.
By becoming one of the businesses that do invest in SEO, you should begin to outstrip the performance of your fellow businesses that have not yet invested and build your share of the market.
The Cost of Not Investing in SEO
If maths isn’t your strong point and you want to convince your accountant or CEO that investing in SEO is important then how about thinking about the negatives associated with failing to invest in SEO.
- In simple terms failing to invest in SEO means losing business to your competitors due to poorer SERPS.
- Your website will stagnate or deteriorate due to a lack of attention.
- Links can become out of date losing potential custom.
- Out of date content on your pages can lose you traffic that was linked to you from other websites.
- Failure to consider SEO implications when restructuring your site or carrying out updates can cause disastrous issues with site navigation and reduce your click-through rate.
Convincing your Stakeholders
Numbers are often the best way to convey the positive effect on profits when considering SEO investment. However, it is also important to understand and communicate the predicted timeline of any results. The return on investment may be slow and you are more likely to keep stakeholders onside if you have been realistic from the start.
It is worth understanding the different strategies that will be employed to improve SEO to allow stakeholders to see how complex it can be.
Improving SEO requires good knowledge and understanding so don’t hesitate to get in touch with us about your SERPS or any other SEO queries so we can chat about how we can help your website to work harder and perform better for your business.
