How to calculate Lead Value

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SEO ROIIn the world of business today it’s all about ROI (Return on investment). Many business owners are looking for the best and most effective marketing strategy. No better place to start than SEO when it comes to the best ROI. Leads from search engines have a 14.6% chance of converting, while outbound marketing techniques have a 1.7% close rate. Before starting any SEO campaign we like to ask our clients, how much is each lead worth to you? Before knowing the answer to that question, you first need to know how to calculate your lead value to better understand your SEO ROI. 

What is SEO ROI

SEO ROI in simple terms is just a calculation that measures your return on investment from your search engine optimization efforts. This can get convoluted with other leads that come from your website. Search engine optimization’s sole purpose is to get organic traffic to your website. There are generally 5 types of traffic that can come to your website.

  1. Organic Traffic – These are people that land on your website via an organic keyword. In most cases, they didn’t know about you or even heard of you until they got to your website.
  2. Direct Traffic – These visitors have most likely been to your website before as they put your URL directly into the browser. However, direct traffic can come from a redirect which potentially could have been from an organic search.
  3. Referral Traffic – This type of traffic is from another domain. This can include directories, review sites, or even your Google business page. 
  4. Paid Search Traffic This is exactly what it sounds like, someone landing on your site through an ad.
  5. Social Traffic – This is traffic coming from any social media platform, Facebook, Twitter, Linkedin, etc. 

How to Find Out Your Lead Value

To find your lead value you first need to make sure you are tracking your leads. The best way to do this is through Google Analytics since they can differentiate the leads you are getting by how they made it to your website (organically). This can vary depending on if you are a service provider or an eCommerce company. 

  • Service Providers – You can track how many people are filling out forms and calling you. 
  • Ecommerce – A lead might make more sense by tracking how many users visit x amount of pages during a session on your website. 

Once you know how many leads you are getting you can divide that number by how much you are making on your leads. Lead Value = Value of Sale / Number of Leads.

What is Good ROI for SEO

For any marketing strategy, a ratio of 5 to 1 is considered good. So, if you’re investing $1,000 a month in SEO then you should be bringing in around $5,000. This can vary depending on the industry. In most cases, small ticket services wouldn’t yield the same ROI. However, that shouldn’t discourage you or anyone from investing in your marketing. It just might take longer to get to that “sweet spot.”

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