9 Ways to Calculate ROI on Local SEO

Local SEO is how Denver area businesses can reach their prospective customers. Like traditional SEO, it takes expertise, finesse, and time. As much as we’d all love to be able to rank number one overnight, it just doesn’t happen. But if you want to make sure you’re getting your money’s worth from your efforts, take a look at these nine ways to calculate your return on investment.

#1: Monitoring Your Changes in Rank

This is the obvious one. With major changes in rank, you know you’re getting a decent return on your investment. It’s a good idea to take screenshots to show the changes in ranking, so clients can see the difference. It’s easy to report ranking changes, but the visuals help drive the point home. Even if the rank increases slowly over time, progress is being made. Fast changes are great if you can sustain the higher rank over time.

#2: Increased Click-Through Rate (CTR)

Check the Google Search Console to see if you’re getting more clicks on the targeted keywords than you use to. Save the data in a spreadsheet since it doesn’t go beyond 90 days. The CTR is what matters because it’ll let you know if traffic is actually clicking through to your website. If you aren’t seeing improvement there, it’s time to re-write your title tags.

#3: Track Phone Calls from Web Leads

With call tracking software, you can have leads call a different phone number based on where they are coming to your website from. The tracking system will connect with analytics and counted as a conversion, and attributed back to the source.

As helpful as this can be, it’s important to display a consistent phone number for your business across the web because not doing so can negatively affect your ranking. Code your business phone number into your site with schema and monitor local citations to make sure tracking numbers aren’t picked up elsewhere.

#4: Track Link Interactions

Tracking link interactions will help you see if people are clicking to call from mobile search, which links on your site they’re clicking, clicking on your driving directions, and so on. Track click activity with consistent naming using event tracking in Google Analytics.

#5: Using a Thanks Page to Track Where Leads Are Coming From

Route visitors to a thank you page after a contact form is filled out. This way you can tell whether they’re coming from social media, Google AdWords, or another source. Then you’ll be able to see which methods are working for conversions so you can focus more efforts on those.

#6: Seasonal Business? Base it on Year-Over-Year

Comparing analytics data from month to month isn’t necessarily practical for a seasonal business. Pool cleaning businesses are booming year round in warm climates like California and Florida, but those same businesses are only open in the summer in North Carolina. You can’t look at winter data for North Carolina pool businesses and expect it to match the summer months.

#7: Monitor Search Queries

If you’ve completely redone some of the pages on your website, optimizing them for better keywords, or improving the optimization for the existing keywords, take a look at the search queries in Search Console.

Copy the data into a spreadsheet so you have it for historical comparison. After a few weeks, you may see an increase in impressions, even though your business hasn’t made it to the first page of results for your desired keyword phrase. Google can still show you information that proves your local SEO campaigns are working.

#8: Track Impressions in Google My Business Dashboard

You can only go back 90 days here, so you’ll want to log the data in a spreadsheet for safe keeping and long-term analysis. This way you can see the change from quarter to quarter, and from year to year.

#9: Calculating Actual ROI

This is a fairly simple formula you can use to check the ROI of each campaign you’re doing, to see if your numbers are improving with time. Let’s assume:

  • K = volume of keywords searched
  • S = % of searchers who become visitors
  • D = % of visitors who become leads
  • C = % of visitors who convert to customers
  • V = average customer value
  • L = Local SEO revenue

(K) x  (S) x (C) x (V) = L

ROI = (L – Cost) / Cost

So, let’s say 5,000 people search for “Denver dentist” ever month. It’s safe to say only a small percentage of those searches will end up visiting your site – and the percentage will, of course, depend on where you rank. If you rank higher on the first page, you’ll get a larger percentage of those visits.

For the sake of example, we’re going to show you what you could expect if you were number 10 (at the bottom of page one) compared to what you could expect if you ranked #1.

If you’re in position 10, you can expect about 3% of the search traffic. Of that hypothetical 5,000, that’s 150 visitors.

If you’re in position 1, you can expect about 40% of the search traffic for the keyword, which translates to 2,000 visitors. That’s well over 10x more, so it pays to rank higher.

So now, let’s assume that 5% of visitors, in both ranking positions, become leads because the majority of people who visit your website won’t contact you at all.  Now, you’ve got 7.5 technically, but I’ll round up to 8 leads at position 10, and 100 leads at position 1.

Now, not every single lead is going to become a paying customer; so let’s assume only 25% of those leads actually become a paying customer. In position 10, you’ve got two customers; in position one, you’ve got 25.

If your average customer value is $25, you’ve produced $50 in revenue in position 10 and $625 in position 1.

(5000) x (.40) x (.05) x (.25) x (25) = L = $625/month

Let’s say you’re spending $250/month in SEO services, so at the #1 position, you’re left with $375 in profit. That means your final ROI calculation would be $375/$250, or an ROI of $1.50. For every dollar you’re spending on SEO, you’re earning $1.50 in return – in the number one position. These numbers are completely arbitrary, but if we continue with the example, it’s easy to see we’d be losing money at position 10.

(5000) x (.03) x (.05) x (.25) x (25) = L = $50/month

In the #10 position, your final ROI calculation would be -200/250, or a loss of 80 cents on every dollar you’re spending on local SEO. You’d need to increase the average customer value to make it worth it. Spending less would make it harder to increase ranking quickly.

ROI comes in many shapes and sizes. Looking at more than one metric can prove that SEO efforts are making a difference.