Is SEO Worth the Money?
Another way of saying this is: Does SEO as an income-generating strategy, provide a Return on Investment for local business owners?
If I were to give a one-word answer, I’d say yes, of course, but why? For an explanation of what SEO is, click here.
To find the answer, we need to explore a few areas further, like:
- What is your time horizon?
- Comparing SEO to paid advertising on Google and Facebook
- Some key Metrics
- Calculating the Value of SEO (Return on Investment)
- Look at whether SEO is a one-off task or a continuous process
- Look at who will do the SEO work
The first place to start is to type your main products and services into Google and see where your website appears in the search results.
If it is in the top 3 organic (natural) positions, brilliant, well done. You are doing a great job on SEO.
If your business is on the bottom of page one, or page two, the chances are that you are leaving money on the table for your competitors.
What is Your Time horizon?
Your time horizon is extremely important. If your goal to have an instant return from instant spend. If the answer is yes, paid advertising with perhaps Google or Facebook is the way to go.
However, paid advertising does have its advantages and disadvantages.
If your time horizon is longer-term and you are looking at the spend as being more of an investment, SEO is the way to go. You have to appreciate that it can take 3 to 6 months to really start seeing the needle move but when it does, you’ll be flying.
What is SEO Worth to Your business?
Let’s start quantifying a few terms:
What value is your average order? Let’s assume for a commercial plumber in Perth CBD it is $3,000
What is the Lifetime Value (LTV) of that customer? That is the value of that customer as they may give you recurring business. A conservative estimate may be $15,000.
What is your Conversion Rate? There are 2 parts to this. Website Visitors that convert to Leads and Leads that Convert to Sales. Assume these 2 combined is about 10%
These are estimates and you will have to find the values and percentages that relate to your business.
Now we can do the calculation estimates.
The Return on Investment (ROI) Calculations of SEO
If you had 5 extra website visitors per day, that is 150 visitors per month. If the conversion rate is 10%, that is 15 paying customers per month. Your 15 paying customers per month are paying an average order (sales) amount of $3,000.
That is $45,000.
An average monthly retainer for an SEO consultant is $1,000 to $5,000.
Now even if that income is over-estimated and you only made $20,000 in extra sales, you can see that the relatively small investment in SEO services is worth it.
That is not even taking into account the Lifetime Value (LTV) of these clients.
As the SEO kicks in and the traffic grows, the challenge for the business is then tightening up the conversions, to increase sales.
Is SEO A Continous Process
Successful businesses never stop optimising their websites. Websites need fresh content to keep their customers engaged as well as websites linking to this new content.
Your competitors want those top positions on Google and if they work hard and you don’t, they will take your rankings.
Continuous SEO is essential for any business.
Do You Hire An SEO Process or Do it Yourself?
Doing It Yourself
You could but every minute spent on SEO for your website is time you are not putting into your business.
To quote the legendary business consultant, Peter Drucker: “Do what you do best and outsource the rest”. So, unless you are an SEO expert, the best advice is not to do it yourself.
Hiring an In-House Employee
This is an expensive option and usually, only reasonable-sized organisations can afford this. An SEO professional will be expensive, maybe $80,000 to $100,000 per year and then you have the other costs like payroll tax, super, onboarding costs, annual leave, staff training and everything else that goes with having a full-time employee.
Hiring an SEO Agency
This is likely to be the most cost-effective way to go for many organisations.
You must have confidence that the consultant is an SEO expert and look to have a custom-made SEO strategy and plan that fits your business.
If you are a local business, match your Marketing Budget to your time horizon.
If you must get instant results from your marketing spend, go with Google or Facebook Ads.
If you have a longer-term time horizon, want to grow your business, rank in the Google Map Pack and organically on page one for your selected keywords, investing in SEO is better.
If you need both, split your budget 50/50 and after month 6, start moving the marketing spend percentage more in favour of SEO.
If you need advice, we are here to help. Please contact Rank Perth SEO.