The return on investment helps determine whether a particular part of your company’s work is a worthwhile investment or not. And thus, it is one of the most crucial metrics for every business to keep an eye on.
In marketing, ROI serves as a roadmap for identifying successes and failures and as a benchmark for your future strategies. With its help, you can tell which tactics are working and prove that your efforts are worth investing in.
But how do you start measuring it right now? Even though it can make you feel rather overwhelmed, for now, we’re here to lend you a helping hand. In this guide, we will tell you everything about ROI and how to measure it for your SEO efforts, in particular.
What Is ROI?
In simple terms, ROI measures the amount of return the business obtains from specific investment costs. It’s a crucial element of business analytics that helps tell which actions and tactics bring the desired results and are worth investing in.
Okay, but why does it matter? Continuously measuring this metric can give your business a significant competitive advantage. Namely, it can help you:
- Allocate resources wisely and budget efficiently;
- Set attainable goals and define practical steps to achieving them;
- Improve the talent acquisition process (by identifying which team members are driving business profitability and detecting talent gaps that hinder it);
- Gain insights on strategies and approaches that work and not so much for your business, which can help you fine-tune your tactic for the best outcomes.
In search engine optimization, in particular, tracking ROI helps detect whether your efforts actually bring the organic growth and conversions needed to make up for the costs you invest in your strategy. Among other crucial KPIs, it’s the one that helps you understand the financial value (aka profitability) of your efforts. At the same time, it’s a crucial metric for tracking the results of each aspect of your strategy and making more informed decisions.
Measuring your SEO results might be a challenge. Fortunately, there is an opportunity to streamline and simplify this process with the help of auxiliary tools. One way to find the right tools for you is to check out the Top10 website for the best software for SEO agencies. This website brings together the best search engine optimization platforms in one place to help you pick the ones that work for your team.
How to Measure the ROI of Your SEO Efforts Step by Step
Basically, the return on investment of your SEO results is measured by a single formula. However, the entire process starts way before you can actually use that formula. Here’s what it looks like step-by-step:
Step 1: Set Clear Goals
Before you can measure your success, you need to understand what “success” looks like to your team. Clear goals will help you gain clarity about the SEO results you are expecting to get from your strategy. Thus, it’s not recommended to start measuring the performance without identifying some goals first.
One way you can make sure that your expectations and efforts go in line is to set SMART goals that are:
- Specific;
- Measurable;
- Aligned (to your business);
- Realistic;
- Time-bound.
For example, your strategy might strive to generate more leads, boost traffic, drive more sales, etc. Whatever the ultimate goal is, take and refine it until it’s specific, relevant, and attainable. Then, go to Step 2.
Step 2: Track Your Progress
The goals you set in Step 1 will help you identify the key metrics that you want to keep an eye on. The metrics can vary significantly. As an example:
- For boosting sales, you might want to track the number of leads generated and conversion rates;
- For boosting traffic, you should keep an eye on your rankings in SERPs, traffic volume, traffic source, etc.
Step 3: Calculate Your ROI
When you collect data related to your core metrics, you can use these figures to determine your return on investment. All you need is a single formula:
ROI = (Revenue generated from SEO – Cost of SEO) / Cost of SEO * 100
Alternatively, if you want to save time and get quick results, you can try using a special ROI calculator and let it do all the math for you.
Okay, it’s clear how to make the needed calculations. But what exactly do you call a good return on investment for search engine optimization?
Unfortunately, there’s no universal benchmark to look up to. SEO ROI depends on a variety of factors, including business size, set goals, industry, and others. Nevertheless, FirstPageSage took data from search engine optimization campaigns over a 12-year period to tell us about some rough ROIs for each industry:
- eCommerce – 317%;
- Legal services – 526%;
- HVAC services – 678%;
- B2B SaaS – 702%, etc.
Bear in mind that these figures are very rough. Indeed, this metric could look like one of these examples for each niche. Still, your results will depend on a range of factors, so don’t use these numbers as real benchmarks.
Tips for Measuring SEO ROI
Now, you’ve got the plan. But how can you measure the ROI of your SEO efforts and make the most out of it?
Here are a few tips:
- Never forget that search engine optimization is an ongoing process that takes time and effort. Achieving the first ranking in search engines and tons of traffic through your optimization efforts never happens overnight. So stay patient.
- Consistency in every step of your strategy is a must for tangible outcomes. Since SEO results take time to show, it’s crucial that you always retain consistency in your efforts.
- Don’t get hung up on one or a few specific metrics. Even if your core goal is to generate more leads, conversions should never be the only metric you use to assess progress. Search engine optimization requires an all-rounded approach. So, the more metrics you track, the more comprehensive a picture of your performance will get and the better outcomes you can achieve in the long run.
- Watch your competitors. Competitor analysis is an excellent tool for receiving valuable insights and lessons on what works well in your industry and what doesn’t. Keeping an eye on your competitors will let you gain priceless insights into how well your strategy is doing and spot areas for improvement.
Conclusion
The return on investment is a metric that enables you to understand the output of your investment in search engine optimization. Additionally, it will help you unveil valuable hints on how to budget your strategy more efficiently and attain the results you are looking for in less time. Measuring this metric can be challenging. However, it’s an integral ingredient of success that can’t be overlooked.
After reading this guide, you have a number of tips and a step-by-step guide that should help you measure the ROI of your SEO efforts without a hassle. Start using them ASAP to assess the progress and make informed decisions that will bring your results to the next level!
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