How to Measure Your SEO Return On Investment
You can make search engine optimization (SEO) as complicated or as easy as you want it to be. SEO isn’t an exact science, and there isn’t just one specific tool or method that will win every time.
SEO can be a major driver of online traffic and revenue for your business. Assuming you are making an effort to optimize your website, you need to put in place a measurable system to track your return on investment (ROI) from SEO.
The following checklist shows you how to effectively track your SEO ROI:
ROI (Return on Investment)
Look at how much you’re investing and what you are getting in return. SEO is about making a profit. However, you need to give it some time.
Compare the investment of one month with your profit 6 months down the road. Keep in mind your link building tactics. Link building is a result of ongoing marketing efforts, so it might take longer to see results. Remember that you are investing money today so you can make money in the future.
Leads and Sales
This is common sense. If you sell products/services on your site, measurement of leads and sales is an important metric that you’ll need to use in order to track your SEO ROI progress.
- What are your exact total sales as a result of your SEO efforts?
- How many sales have you made over a certain period of time?
A great tool to use to analyze this data is Google Analytics. You can segment your traffic to view organic traffic only, and can confirm precisely which keyword phrases are driving such traffic to your site. And for e-commerce sites, take it a step further by setting up the e-commerce tracking functionality in Google Analytics to track revenue from organic traffic.
Cost Per Lead/Sale
Be sure to break down your SEO costs all the way to the per lead or per sale level:
Analyze how many leads you receive and how much SEO costs you. This breaks down how much EACH lead costs you.
E-commerce sites: track SALES, not leads.
Just because SEO didn’t cost you a “monetary” amount, time is money! If you dedicated 10 hours per week to SEO that’s 250 hours in a 6 month time frame. If you made $2,000 gross profit ($500 net profit), that equates to less than $2/hour. Your time is worth more than $2/hour – basically, you LOST money on your SEO.
Average Customer Lifetime Value
You need to evaluate your customers’ worth to your business longer term. When you know how much a customer is WORTH over the customer lifetime (Customer Lifetime Value), then you can figure out how much to invest to acquire that customer.
- Each customer spends $50 each time they make a purchase on your site and orders 5 times per year.
- Your customer loyalty is an average of 2 years. As a result of recommending your company, each customer brings you 2 new customers.
- $50 x 5 x 2 = $500
- (Each customer spends an average of $500) $500 x 2 = $1000
- (2 customers that were referred to you by the original customers spend $1,000)
Customer Lifetime Value Calculation:
Conversion Rate (CR) is the total percentage of visitors that complete the desired action you want them to take. For example, it could be leads, sales, form submissions, registrations, etc. Tracking your conversion rate is VERY important! Run tests, tests and MORE tests in the following areas to improve CR: test marketing approaches, calls to action, headlines, copy, layout, specials, etc.
Conversion Rate Per Keyword
You need to take your conversion rate one step further – conversion rate per keyword.
For example, if you have two keywords converting at 10% and 50 keywords converting at 1%. Your conversion rate would subsequently be around 1%.
You can assume all these keywords have equal amounts of traffic, but that probably won’t be accurate. If you don’t know WHAT keywords convert at a high rate, you won’t be able to figure out how to rank those two keywords FASTER (and find MORE keywords similar to those two keywords).
Tracking traffic to your website from organic search is really important. If you are continually optimizing your site, you should see traffic grow monthly (unless your company/business operates seasonally).
Use this effective rank checker to confirm the search engine rankings of your primary keywords.
Analyze what sites are sending you traffic and the CR of each traffic source.
Yahoo Site Explorer is a helpful tracking tool to confirm incoming links to your site.
Calculate pages indexed through Google, Yahoo and Bing. Make sure the number of indexed pages grows as you continue to build out and add to your website. Use the following syntax on the search engines when confirming the pages each search engine has indexed:
- Google – site:CompanyDomainName.com
- Yahoo – linkdomain:www.CompanyDomainName.com
- Bing – site:www.CompanyDomainName.com
Eager for more? Check out Zeke’s series "Getting Social Smarts" and his three podcasts below for more great online marketing information and tips!