How to Use SEO Metrics to Determine Your ROI
Many website owners know that they want their website to rank high in the search engines, but they don’t utilise the right tools to measure the return on investment (ROI) of their SEO campaign. If you want to have success with your website, then it is important that you are tracking the rankings and measuring the conversions or sales that are coming in.
By focusing on the money that is coming is from your SEO efforts, you can determine if the cost is paying off. It doesn’t make sense to put time and money into an SEO campaign without focusing on a specific goal. On the other hand, you can boost sales and increase the bottom line by looking at SEO metrics, and at the same time it makes it easier for you to boost the rankings of your website even more.
Types of SEO ROI
With SEO, there are two types of ROI that need to be considered: actual ROI and anticipated ROI. The actual ROI can be calculated by looking at the total immediate revenue brought in by the SEO campaign, and subtracting the cost of running the SEO campaign. This ROI calculation is the most obvious, and the easiest to figure out because you see immediate results.
In order to calculate the anticipated ROI, you need to understand the lifetime value of each customer. For example, if the company acquires a new customer and their average customer makes 3 purchases per year, then you can calculate the potential revenue that might come in the future. To calculate a customer’s lifetime value, it is important that you consider these factors:
- Average number of purchases made by a customer each year
- Average price of each transaction
- Profit margin on each transaction
- Average length of time the customer will continue buying from the company
Once you understand the lifetime value of a customer, then you can get a better idea about the amount that you can spend on the cost of acquisition, because you will be able to calculate the expected ROI for the campaign.
Using These Metrics to Improve Search Engine Rankings
Understanding ROI helps you to hone in your future SEO efforts, because you can target the SEO campaign on the keywords that have the highest ROI potential. If you find that customers who purchase a certain type of product or service tend to spend more money on an annual basis, then it makes sense to focus your SEO spending on those subtopics because you will get a better return for your investment.
Here at Pepper Pot Digital, we understand how to leverage SEO metrics to help you boost your online campaign. Instead of applying a cookie-cutter approach for every client, we work hard to make sure that your SEO campaign is catered to the individual needs of your business. Contact us to learn more about how we can help you grow your online business.