Are you one of the many business owners who roll their eyes when they hear “SEO”? Maybe in the past, you’ve been sold snake oil “SEO” that was mostly fluff and very little substance. Nothing can be more frustrating than realizing that you’ve been spending time and money on the wrong thing and that it’s too late to do anything about it.
Unfortunately, most businesses set themselves up for this expensive and frustrating mistake by not knowing how to track return on investment for SEO and how that directly relates to their business growth.
The good news is that it’s not too late to fix it if your SEO investments have fallen short of your expectations in the past. You simply need to know a few key metrics that will help you analyze ROI (return on investment) and have an action plan in place to make sure you know what needs to be adjusted before the leads stop coming in. Working with a top SEO company to help you get an ROI will also ensure that you have expert help guiding you through the process. However, knowing all of the components of the process makes you a more informed business owner and will get you multiplied results.
It’s not complicated, and it’s not overly time-consuming, but we know that being proactive and tracking your ROI will lead you to a much more successful SEO experience, building your momentum for exponential business growth in years to come.
Let’s start with a simple question; “Do you know for sure that your SEO is or isn’t working?” Does that question leave you confused because, for the first time, you realize that you should know the answer? You are not alone, most businesses don’t know their financial numbers no less their marketing numbers.
However, you can quickly take a huge step forward in all of your marketing efforts by knowing where your leads are coming from. If you don’t know what marketing channels are successful, it’s impossible to know what’s working and identify weak points where you can make adjustments to make them more effective.
Sounds pretty common sense, right?
Don’t get lost in the “how” at this point (more on that further down), simply block off a weekly spot on your calendar of about 30 minutes that from now on is dedicated to tracking your leads.
Did you do it? Is time blocked off for next week? Great! Moving onto the nitty gritty…
Many business owners focus on things like fresh leads for their business when talking about things like SEO. It’s the sexy thing that SEO is known for, getting your business to rank at the top of the search results when a new customer needs your services. And that’s absolutely part of it. But for a moment, let’s talk about something people often don’t think about when looking at the success of their SEO, and that is; the ease of search efforts for people already familiar with your business.
Have you ever Googled a business you knew part of the name of, or maybe just the name of a service they offer, but couldn’t remember the business name? How did you end up finding it? You may have Googled a partial name, an area, or just the name of a service offered by that business.
Most likely, you found what you were looking for, why? Because their SEO was optimized for even a partial search of a keyword related to the business and was already built into the search engine.
When a person finds you online, whether you had previous contact or not, there’s something to be said for the fact that they found you again using your website. SEO is what gives you that kind of visibility.
Here’s an example from our SEO efforts at Firestarter: a past client, out of the blue, reached back out to us. But not in the way you’d expect. No phone calls, no direct emails. Instead, he reached out through our website. This an interesting moment for us, wondering why he decided to reconnect this way. Was it because he didn’t have our number, or did he remember just enough to Google us and find our site? This isn’t just a curious incident; it’s a testament to the strength of our SEO.
Here’s where it gets really interesting. You might wonder, “Was this just a happy coincidence, or was it our SEO efforts paying off?” Well, the two aren’t mutually exclusive. This experience underscores a crucial point: understanding the source of your leads is vital. In our case, without our SEO-optimized website, this client might have never found us again, even with a few remembered details.
It demonstrates the intertwined nature of different marketing efforts. SEO doesn’t just stand alone; it amplifies all other marketing channels.
Take for instance a direct mail campaign where leads are encouraged to submit a form on your website versus calling from the direct mail piece. If they aren’t able to find your site, direct mail advertising is hardly going to be effective. However, if the two marketing strategies are both set in motion to support each other, people can find you through both avenues.
It’s a synergy that is created between SEO and all the other ways people make contact with your business. It also underlines the necessity of tracking the source of each lead to understand the impact of SEO. So, how do you do that?
Before we go any further into this process, we want to point out the importance of defining what constitutes a lead for your unique business. Zig Ziglar once said: “If you aim at nothing, you will hit it every time.” So, think about ultimately what you want people to do when they find you (because with the right SEO, they will find you). As we dig into specific metrics, think about how you will define a lead for your business and make it quantifiable.
Now that you have that we can distill the process down, let’s talk about a few numbers that are the VIPs of the metric world when calculating ROI.
This is a pretty obvious one to start with but to be able to get an accurate number on the back end, we need to know that this one is accurate or all of the others just don’t matter. When we say “total cost”, this is what you are spending on advertising. This will include anything you are spending on SEO services, as well as things you might be doing to supplement your SEO, such as paying freelance writing for SEO-optimized articles or other marketing you are doing to supplement your SEO efforts. To come to a clear number for SEO-specific ROI, keep things like PPC (Pay-Per-Click) advertising costs separate. We’ll combine them later for total return on all digital marketing, so don’t worry you’ll be tracking that too.
Cost Per Conversion
A fancy way of saying “How much does it cost to get a lead?”. Here we are tracking how much it costs to get people to take the initial action we want them to take. Maybe it’s filling out a form on your website, signing up for a newsletter, or taking another action-based response, normally including the gathering of contact information of the lead.
Think of it as putting a price tag on each lead. As we mentioned at the start, we are tracking a specific action, not just counting how many people clicked on your ad or visited your website. It’s about understanding how much you spend to get someone to take a tangible step toward becoming a customer. What sets this apart from other ways of tracking is that you are filtering out spam and leads that landed on your site by accident or aren’t serious about taking action. All in all it’s what helps you track quality leads.
Cost Per Acquisition
Going from lead to client can take a lot of leads. Of course, here we are focusing on quality leads taking the action we wanted them to and eventually signing on as a client (or paying for a service, putting a deposit down on a bathroom remodel, etc).
This is the part where you get to see how many leads it took you to get a paying customer.
The magic of this is that you can now reverse engineer your marketing efforts because you know exactly what it’s going to take to convert the lead into a customer. This is both the cost of closing the lead and if you want to go the extra mile…the time it takes to close a lead.
For instance, many businesses have a time frame most leads fall into when going from lead to customer. That could be days or weeks, or possibly months. Knowing this average matters because it will help you calculate the return on your investment while giving you the ability to know when you will see that money come back to you in the form of a customer.
Initial Revenue Generated By That Client
You closed a sale! Hooray! This is what we like to call “initial revenue”, simply because initial revenue might not tell the full story of how much the customer is worth, but it gives us a starting point. This starting point is where we can start calculating our true ROI because this is the first time money has changed hands.
For some businesses, the initial sale is all the money that is generated from that client, and for other retainer-based businesses, this is the start of an ongoing relationship with the customer. For all businesses, the initial sale is an opportunity to make a dedicated client for life, so ongoing revenue may be harder to track but that’s why those organizational tools we talk about below are so important!
This process also gives us a boost that those marketing efforts are finally paying off. By tracking our ROI, we’ll really know they are.
Return On Investment
The metrics we track all lead to this one important number. This number tells us two things: how much money we spent to earn our revenue, and how many of our leads became customers. It’s a clear way to see how effective our spending and our marketing efforts are. It’s the most important number to know because with this number you can determine if the efforts you are making are getting you where you want to go in your business.
It will look something like this:
The formula we are using here is:
- Cost divided by leads = Cost Per Conversion
- Cost divided by closed leads = Cost Per Acquisition
- Revenue minus cost = Profit
- Profit divided by revenue = ROI
From the profit, we want to figure out the ROI as a percentage, simply take revenue minus cost (to calculate profit) then profit divided by revenue is the ROI, which in our example is .9 or 90%.
Because we know how many leads were generated by SEO in a given month, and we are tracking to see how many of those specific leads became clients, we know that our SEO is working! This gives any business owner confidence to keep the investment in SEO ongoing because it will be easy to see the money come back in the form of paying customers.
Another thing this will do is provide a baseline for the amount of leads that are coming in and on average what those leads are worth. This is especially important for businesses that want to up the anti and layer paid advertising on top of their organic SEO.
Let’s talk about what that is, and what it would look like.
ROAS is short for return on ad spend. Pay-per-click ads are a way of creating those extra touchpoints we mentioned earlier. It instantly makes a customer familiar with you, because when they search you appear multiple times on the page. This also sends your business listing to the top of the page even if your SEO is still building momentum and your organic listing is further down.
Combining PPC and SEO is where we truly see a shift in the amount of leads that come to a business, both organically and by clicking through the ad. Here at Firestarter, we layer the two together with dramatic results that have repeatable value. We wouldn’t be talking about it unless it was something we saw prove true for ourselves and our most ambitious clients.
But again, as business owners, we don’t want to blindly throw money into the ether without knowing it will come back to us. We need to calculate the return we see on our ad spend the same way we do with SEO, we will combine them further. For now, here’s what it would look like to calculate ROAS:
Going a little bit further with this one, let’s take our revenue and divide it by our ad cost. By doing this we will determine how much we make with each marketing dollar we spend on PPC.
Now we know that for every $1 we put towards ads, we can safely estimate that we will be making a 600% return on our investment. Do you think this kind of calculation would lead to a more confident marketing campaign? Us too.
Let’s look at what happens when we combine tracking them both:
Now, we can calculate the final number that everything is here. We affectionately like to call it “Return On Marketing Spend” or ROMS.
ROMS (Return On Marketing Spend)
This is where the rubber meets the road and we see all of our marketing dollars multiply as they come back to us. It is what is going to give you the crystal-clear numbers to boost your marketing confidence so that you never waste time or money on the wrong thing again.
|TOTAL REVENUE GENERATED
For this one, we take our total revenue generated from both SEO and PPC and divide it by the total cost we spent to make each one happen. This is what gives us the real story, and in this example, for every $1 you spend on your marketing, you can expect to make over $7 back. This is what leads to the most impactful and informed decisions that you can make for the growth of your business and the service you provide to your customers.
Total Revenue Generated By Each Customer
We find that a lot of business owners don’t know what each customer is worth to them over the long run. First, by calculating what we did above, we gave ourselves the added advantage of knowing the approximate average of each customer’s value at least the initial investment they made with us.
What this does for a business is make revenue predictable. That’s huge for any business! Predictable revenue ensures stable growth of a business.
This is compounded when you have a business with clients on retainer or hire your company multiple times during the customer relationship. It’s what can give us the thousand-foot view to span out and see what our marketing dollars do over the lifetime of the client.
To find the average customer value, take your total revenue and divide it by the number of closed leads.
|AVG. CUSTOMER VALUE
The next part is going to be business specific, but for our purposes here, let’s say that $8,333 is a monthly retainer for your business services and your average client stays with you for about 3 years.
Now, we need to bring back our Cost Per Acquisition, how much it took to land that client initially and subtract it from our overall customer value.
|AVG CUSTOMER LIFESPAN
|LIFETIME CUSTOMER VALUE
|COST PER AQUISITION
|TOTAL LIFETIME REVENUE GENERATED FOR THAT CLIENT
So, at the end of the day, your marketing money gave you a 99.6% ultimate ROI.
Now for the tech stack that will make this easy and doable for even the busiest business owner.
Setting Up Effective Tracking Systems
When it comes to conversion tracking to start actually pulling in this data, we recommend a software named CallRail. It’s our go-to for a couple of reasons.
First, it allows a business to track phone calls as well as website leads. We find that a good amount of people still use the phone to contact businesses directly and it’s something that most businesses don’t track. Until now, it’s been difficult to do so, but CallRail makes it easy to see who called, where they are calling from, listen to the call, and block it if it’s just spam.
A Note On Spam- A lot of business owners jump to the conclusion that their SEO isn’t working because they are getting a lot of spam either by call or through their website. It’s important to note that getting an uptick in spam traffic is a good thing. Although it can be annoying, it proves that your site is being found and people are seeing you.
Second, it not only counts and houses form submissions, but it allows you to see the source of the submission—a powerful tool for tracking your most valuable lead platforms, including Google.
This is something we love to set up for each of our clients at Firestarter SEO. It works in a unique way to produce a seamless experience to be able to pull metrics and set goals. It works with tools like Google Analytics but goes a step further by making sure that the goals you are tracking aren’t being marked complete with garbage leads.
That’s why it’s so important to reconcile each lead, sorting good leads from bad and making sure each quality lead is getting attention immediately. This makes it incredibly easy to pull numbers into our lead-tracking system as a quality lead, putting them into our formula to create a “cost per conversion” number.
There can be some crossover between CRMs and lead management as well. For thorough tracking, it can be helpful to bring over form submissions from your CRM to reconcile within a tool like CallRail or manually if you aren’t using a tool. It helps if you keep your CRM clean by deleting any spam or junk that comes in to make sure that you are sorting and qualifying leads for better tracking.
CRMs however have their limitations simply because they aren’t tracking all the ways that someone contacts your business or seeks out your services. But, they make up for it by being able to tag leads with specific markers to tell you about the lifecycle of the lead.
What we mean by that is that not all leads buy right away, it may be 6 months between the original contact and a paying customer. If you aren’t reconciling that and don’t make a point to sort them, you’ll never know how long it takes for your average customer to convert.
However, a huge powerful advantage any CRM has is the ability to gather your list of qualified prospects and feed that information back to Google Ads to create lookalike audiences based on your hottest leads.
Curious about the role that paid advertising can play in your SEO investment? Yeah, we thought so…
There is a huge connection that we’ve seen between SEO results and Pay-Per-Click (PPC) advertising. When we work with companies we find that there is a huge boost of both online visibility and lead gen by combining the organic and paid ways that people find a business.
With our own company, we experience a noticeable uptick in our SEO leads when we turn on PPC campaigns. It makes sense when you think about it, both channels highlight the same business speaking to their reputation and the seriousness of their marketing. It aligns with what we know about customers needing multiple touchpoints before engaging with a business. By appearing in paid ads and organic search results, a business immediately creates those crucial multiple points of contact with potential clients in just one search.
There is a clear spillover effect on SEO results when a business invests in PPC advertising. It’s a repeatable and reliable way to get both of them performing well and cashing in on leads from both.
And since by now you are tracking your ROI, you’ll know exactly how much they depend on each other. In our own tracking, and for our clients, we make sure to track ROAS (Return On Ad Spend) and SEO ROI in a way that we keep track of each one separately so we can see the leads they are bringing in and how that translates into customers.
For our clients and our in-house marketing, we advocate for a holistic approach that combines SEO and PPC. By understanding and leveraging the relationship between these two, businesses can achieve significant growth and a strong online presence that strengthens month after month.
We’ve talked about a lot in this article, and while you may be motivated to start taking action, here’s a little summary to keep you focused:
- Define Conversion Metrics: Identify what constitutes a conversion for your business. This could range from newsletter sign-ups to form submissions.
- Track Total Cost: Keep a meticulous record of your total expenditure on SEO and Pay-Per-Click (PPC) marketing. Accurate tracking of these expenses is foundational for calculating ROI.
- Calculate Cost Per Conversion: How many leads took the desired action on your website?
- Assess Cost Per Acquisition: Analyze how many leads it takes to acquire a paying customer. This measure provides insights into the effectiveness of your lead generation and conversion strategies.
- Evaluate Total Revenue Generated: Consider the long-term value of each customer, beyond the initial transaction.
- Determine Return On Web Spend: This comprehensive metric evaluates the overall effectiveness of your online marketing efforts, it can be only SEO or also return on ad spend (ROAS) if including PPC.
- Utilize Advanced Tracking Tools: Use tools like CallRail, Google Analytics, and your CRM to track conversions and reconcile your leads. These tools provide valuable insights into the performance of your SEO strategy and can show you when you hit your goals!
- Combine SEO and PPC Efforts: Now that you are confident with your SEO ROI, start introducing PPC ads that will only strengthen your marketing.
We hope by now we’ve given you more reasons than ever to track your return on investment. There is power in knowing your numbers. That power is harnessed when you as the business owner find a way to drive quality leads to your site time and again converting them into happy paying customers. Because, at the end of the day, aren’t you doing your customers a disservice if they can’t find you?
Even with all the hats a business owner wears, the most important one is always going to be the visionary. By tracking your ROI, not just with SEO but with all of your marketing efforts you ensure that your time and energy as a business owner is used in the best way possible.
To have a clear vision of where your business can go, you need to know where it stands right now. Similar to how GPS can only give you directions with a precise starting location, you need to know the starting point of your SEO.
Think of us, here at Firestarter SEO as business GPS, ready to identify roadblocks, and reroute as needed.
If you’re ready to uncover the real story behind your data, let’s have a conversation. This offer is entirely free and extremely valuable, complete with action steps from the start. Simply fill out the form, and together, we’ll overcome your SEO challenges once and for all.