Calculate the return on investment
Posted: Sun Dec 15, 2024 4:48 am
Customer LTV is the total value a customer is expected to spend with your business, calculated based on the average length of your relationship.
Lead conversion rate is the percentage of leads generated that turn into sales.
Let’s say your customer lifetime value is $20,000 and your close rate is 15%. Your target value should be $3,000.
Of course, this is a predictive calculation, however, it is a way to calculate the return on an activity where leads are the primary source of conversion.
At this point we have the cost db center whatsapp number of investment in SEO and the value of conversions: we are ready to calculate the ROI of the SEO campaign.
Once you have the numbers you need, calculating your SEO ROI is easy.
Just use the same formula as before:
SEO ROI = (Conversion Value - Cost of Investment) / Cost of Investment
Let's say that in a month the SEO campaign generates $200,000. And the investment cost is $40,000.
If we insert these numbers into the formula:
(200,000 - 40,000) / 40,000 = 4
we get this result: for every euro spent on SEO, we have a return of 4 euros.
In other words, the ROI is 400% (4 x 100 to get a percentage).
And that's all.
You can use this formula to calculate the ROI of your SEO campaign at any time you like, as long as you know the costs and the return.
SEO ROI Prediction
Now that you know how to measure SEO ROI, you can start thinking in terms of forecasts.
If you work in-house or through an agency, you will likely need to estimate in advance the growth and revenue you expect to generate.
In any case, making SEO ROI forecasts is important because it helps you allocate resources, prioritize SEO efforts, and make adjustments.
To get started, consider the following:
Your website's past SEO performance
Your Potential Traffic
Your average conversion rate
To check your site's SEO performance, enter the URL into this Semrush Domain Overview tool .
Go to the “ Compare Domains ” tab and add your top four competitors.
Lead conversion rate is the percentage of leads generated that turn into sales.
Let’s say your customer lifetime value is $20,000 and your close rate is 15%. Your target value should be $3,000.
Of course, this is a predictive calculation, however, it is a way to calculate the return on an activity where leads are the primary source of conversion.
At this point we have the cost db center whatsapp number of investment in SEO and the value of conversions: we are ready to calculate the ROI of the SEO campaign.
Once you have the numbers you need, calculating your SEO ROI is easy.
Just use the same formula as before:
SEO ROI = (Conversion Value - Cost of Investment) / Cost of Investment
Let's say that in a month the SEO campaign generates $200,000. And the investment cost is $40,000.
If we insert these numbers into the formula:
(200,000 - 40,000) / 40,000 = 4
we get this result: for every euro spent on SEO, we have a return of 4 euros.
In other words, the ROI is 400% (4 x 100 to get a percentage).
And that's all.
You can use this formula to calculate the ROI of your SEO campaign at any time you like, as long as you know the costs and the return.
SEO ROI Prediction
Now that you know how to measure SEO ROI, you can start thinking in terms of forecasts.
If you work in-house or through an agency, you will likely need to estimate in advance the growth and revenue you expect to generate.
In any case, making SEO ROI forecasts is important because it helps you allocate resources, prioritize SEO efforts, and make adjustments.
To get started, consider the following:
Your website's past SEO performance
Your Potential Traffic
Your average conversion rate
To check your site's SEO performance, enter the URL into this Semrush Domain Overview tool .
Go to the “ Compare Domains ” tab and add your top four competitors.