Calculating ROI for Small Business SEO Services (Easy Steps)
Calculating return on investment (ROI) helps small businesses assess profitability, allocate resources effectively, and make smart marketing decisions. ROI is a measurable way to track performance and justify marketing investments.
Part of small business SEO is calculating ROI. This guide helps you find out your business’s ROI using these easy steps:
- Define your goals
- Identify key metrics
- Determine costs
- Track organic traffic
- Monitor keyword rankings
- Measure conversions and revenue
- Calculate ROI
- Evaluate figures and adjust
ROI aligns small business goals with overall objectives, leading to growth and maximized returns. Learn how to calculate ROI. Let’s go!
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1. Define Your Business Goals
Find out what you want to achieve with your SEO campaign. Business goals can be increasing website traffic, improving search engine rankings, generating leads, or boosting online sales. Here are some tips for defining business goals:
- Identify specific objectives such as increasing sales, expanding market share, or improving brand awareness.
- Ensure that goals are measurable and time-bound. Examples include achieving a particular percentage increase in revenue within a specific time frame.
- Consider your goals with key performance indicators (KPIs), which can be tracked and quantified, including website traffic, conversion rates, or customer acquisition costs.
2. Identify Key Metrics
Select the metrics that align with your goals. They may be tracking organic website traffic, keyword rankings, conversion rates, or revenue generated from organic searches. To identify key metrics, follow these techniques.
- Break down overarching goals into specific, measurable objectives. For example, if the goal is to increase revenue, consider metrics such as sales growth, average order value, or customer lifetime value.
- Highlight the customer journey and the metrics relevant to each stage, including website traffic, conversion rates, email open rates, social media engagement, or customer satisfaction scores.
- Align metrics with business goals. For example, if the goal is to increase leads, track metrics such as lead conversion rate, cost per lead, or lead quality.
- Use industry benchmarks to gain insights into typical market performance. This sets realistic targets and compares performance with industry standards.
- Leverage data analytics tools such as Google Analytics, CRM systems, or marketing automation platforms to track and measure these metrics.
- Regularly review and refine metrics to ensure they are relevant and meaningful.
3. Determine the Costs
Calculate the total expenses associated with the SEO campaign. Include the costs for hiring an SEO agency, software or tools, content creation, website optimization, and related costs. Find out the price of marketing using the following techniques:
- Identify the direct costs associated with the marketing activities. These include advertising spend, campaign-specific costs, production costs, or fees for software or tools.
- Consider labor costs when executing marketing efforts. Include time and salaries of employees or contractors who contribute to marketing campaigns, content creation, social media management, etc.
- Account for any overhead costs indirectly related to your marketing efforts, including office space, utilities, equipment, or other operating costs for marketing activities.
- Allocate costs accurately to specific marketing campaigns or activities.
- Include opportunity costs, potential benefits, or revenue gained by investing resources in alternative projects or activities.
4. Track Organic Traffic
Monitor organic website traffic using tools such as Google Analytics. Include the number of visitors and any changes over time. Track organic traffic when calculating ROI using these strategies:
- Set up website analytics such as Google Analytics to provide valuable insights into website traffic and user behavior.
- Monitor organic traffic metrics with the web analytics tool. Focus on metrics such as "Organic Search," "Organic Traffic," or "SEO Traffic."
- Consider critical organic traffic metrics such as the number of organic sessions or visits, pageviews, average session duration, and bounce rate.
- Track organic traffic data over specific periods, such as monthly or quarterly. Compare the results to identify trends, spot fluctuations, and assess SEO efforts.
- Set goals and conversions such as form submissions, newsletter sign-ups, or e-commerce transactions.
- Consider landing page performance by analyzing metrics such as conversion rates, goal completions, or revenue generated.
5. Monitor Keyword Rankings
Keep track of your website's rankings for targeted keywords using keyword research or SEO tools. Determine the keywords you are actively optimizing for. These keywords should be relevant to your business, products, or services and have high search volume and competitiveness. Use these techniques to monitor keyword rankings:
- Set up tracking for target keywords in the selected keyword tracking tool. Monitor the rankings to track changes or fluctuations.
- Analyze ranking movements over time. Identify keywords that have improved their positions in search results and those that have declined.
- Align keyword rankings with organic traffic, conversions, or revenue metrics.
- Consider search volume and click-through rates (CTRs). Higher rankings for keywords with significant search volume and higher CTRs can increase organic traffic and conversions.
- Monitor the rankings of competitors' keywords to get insights into the competitive landscape and understand where you stand in comparison.
6. Measure Conversions and Revenue
Track the conversions or sales generated using organic search by assigning a monetary value to each conversion to calculate your revenue. To measure conversions and revenue, use these tips:
- Determine what actions on the website or online platforms are considered conversions, such as purchases, form submissions, email sign-ups, downloads, or other activities that align with the business goals.
- Set up website conversion tracking, such as Google Analytics or third-party platforms, to track and attribute conversions to specific marketing channels or campaigns.
- Assign a monetary value. For example, if a purchase on the website generates $50 in revenue, consider the value of that specific conversion.
- Monitor and record the conversions generated through different marketing channels or campaigns through the analytics platform or marketing tools.
- Sum up the total revenue generated from the tracked conversions.
- Consider using attribution models to allocate revenue to different marketing channels or campaigns.
7. Calculate ROI
After gathering the necessary data, calculate the ROI using the following formula:
ROI = ((Revenue - Cost) / Cost) x 100
For example, if you spent $2,000 on SEO services and generated $5,000 in revenue,
ROI = (($5,000 - $2,000) / $2,000) x 100 = 150%
8. Evaluate and Adjust
Assess the ROI result and determine whether it meets expectations. If the ROI result is positive and aligns with business goals, continue investing in the current SEO campaign. If not, adjust your strategies, target different keywords, or seek professional assistance. To evaluate and adjust marketing ROI, note these strategies:
- Establish regular evaluation periods to assess the performance of marketing activities. These periods might depend on the nature and scale of your business.
- Review organic traffic, keyword rankings, conversions, and revenue metrics.
- Compare metrics and ROI figures against industry benchmarks or internal historical data.
- Identify the marketing strategies, campaigns, or channels that have generated positive ROI and significantly contributed to the business goals.
- Pinpoint underperforming strategies or campaigns that have not yielded the desired ROI or have performed below expectations.
- Adjust and optimize marketing strategies such as reallocating resources, refining targeting, improving messaging, or exploring new marketing channels or tactics.
- Test and experiment to refine marketing efforts.
- Maintain consistent tracking of key metrics and monitor the effects of these adjustments over time.
SEO is an ongoing process, and results might take time to materialize. Always track your metrics consistently, including your ROI, and make adjustments as needed to improve your strategies over time.
For help in improving marketing ROI and gaining excellent SEO strategies, contact Digital Authority Partners today.
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