The return on investment (ROI) that small businesses can expect from SEO
Gone are the days when a local business could simply rely on opening its doors, placing a few ads, and hosting a grand opening event. With search engines now ubiquitous and accessible via smartphones, people instinctively turn to them when searching for a local shop or service provider like yourself. Investing in effective search engine optimization (SEO) has become crucial, as it can determine whether your business appears near the top of search results or remains invisible, potentially losing out on customers to your competitors.
According to GE Capital Retail Bank, a staggering 81% of retail shoppers conduct online research before making a purchase. This means that the vast majority of retail consumers begin their purchasing journey with online research.
Despite understanding that investing in SEO is a wise decision for your business, other factors may hinder your commitment, such as deciding whether to learn SEO yourself or partner with an agency, or determining which agency to trust. This article will cover what you should anticipate investing, what you need to know before embarking on SEO, and what returns you can expect from your investment.
When you invest in SEO, you are paying for various elements that contribute to improving your website's search engine ranking and visibility.
In contrast to paid advertising campaigns like PPC or social media campaigns, investing in SEO does not involve direct payment to the platform, such as Google, for the visitors that land on your website. Instead, you compete with other businesses and websites to secure a higher ranking in search results.
Effective SEO improves the visibility of your brand, making it more likely for potential customers to find you when searching for relevant keywords related to your industry, products, or services. This, in turn, increases the likelihood of searchers clicking on your listing, getting directions to your location through Google Maps, or even having your content read aloud as a response from a smart speaker.
Therefore, if you're not directly paying for traffic from search engines, what exactly are you investing in with SEO?
Content: Creating the pages or articles that will appear in search results, introducing your business to your audience, and encouraging them to become customers is an essential aspect of SEO.
Links: Gaining relevance and authority from other websites that link to you is crucial, and often involves some form of outreach that needs to be managed.
Website design: The layout and flow of your website can either aid or hinder your ability to convert visitors into paying customers. You may require professional assistance to optimize your site's conversion rate.
Technical SEO: Ensuring that search engines like Google properly crawl, index, and rank your site, as well as resolving technical issues and deploying schema code, requires expertise and time.
Analytics/strategy: Effectively analyzing your site's performance, evaluating your competitors' performance, and creating a sound plan of action or determining relevant keywords to target with pages or posts requires experience and expertise.
These are the components that work together to enhance your search engine visibility and transform online visitors into potential in-person visitors or paying customers.
Separating SEO myths from facts
Upon registering a small business, it is inundated with unsolicited cold calls and pitch emails from various sources claiming to offer quick success for a small fee. Many offshore companies exist solely to convince small business owners to pay for their services, some of which claim to specialize in SEO.
The truth is, there are shady service providers that are not genuine SEO experts, and a telltale sign is their attempt to reach you through cold-calling or email marketing rather than utilizing SEO strategies. If they possessed the necessary skills to rank other businesses in search results, they should be able to rank their own website. Do they appear for a relevant search?
Aside from this test, there are other ways to assess whether an SEO agency or freelancer is legitimate:
They do not promise rankings for specific keywords.
Their website ranks for keywords related to the services they offer.
They do not guarantee immediate results.
They do not assert to be "Google Certified" for SEO services (since such certification does not exist).
They have positive feedback from prior SEO clients.
The potential cost of ignoring SEO
Neglecting SEO for your business may lead to not being discovered in search results, which can limit your customer base. Although this alone is a disadvantage for most businesses, there are other related drawbacks to consider.
For instance, when people search for the "best [product/service] that [your business provides]," you lose out on the chance to reach that audience since you lack relevant content. Instead, they'll be presented with a list of competitors or their content.
There is a window of opportunity when someone is gathering information before making a purchase (known as "informational intent" in SEO). This is particularly true for costly purchases. Optimizing your site allows you to attract these searchers, introduce them to your brand, build trust over time, and ultimately guide them towards becoming a customer.
For local businesses, you can claim your business on Google Search results, and appear in maps when Google recognizes the search intent as local. By claiming your local knowledge panel, you can showcase your location details, reviews, images, and post updates and promotions. There's even a whole field of SEO dedicated to local results, with additional steps that can increase your small business's ability to reach nearby customers who are ready to buy.
The list of potential SEO benefits is extensive, but keep in mind that neglecting SEO makes it easier for your competitors to reach their target audience since you limit your digital presence. For some customers, this means you don't exist at all.
However, there are valid reasons for businesses not to invest in SEO.
While SEO can bring significant benefits to many businesses, it may not be the right choice for everyone. If you are a small business with limited time, budget, and knowledge of SEO, and have other successful marketing channels available, it may not be the best time to invest in SEO.
It's possible that your business operates in a small community or serves a very niche audience, making it difficult to see a significant return on investment from SEO. In such cases, hiring an SEO consultant or agency could be more costly than the potential benefits.
It's important for you, as a business owner, to understand your target audience and their preferred channels. For instance, if your audience is not tech-savvy, traditional marketing may be more effective. Or if a particular social media platform like Instagram is popular in your industry, it may be better to focus your initial investment there.
Finally, it's important to manage your expectations. If you're looking to rely on SEO as a quick fix to "save" your business, you may be setting yourself up for disappointment. SEO is a long-term strategy, and it takes time and effort to see results. Other marketing channels may be more suitable if you need a quick return on investment.
Comparing Approaches to Investing in SEO: Do-it-Yourself, In-house, or Outsourcing.
While technically, nearly anyone who can write an email can "do SEO," it's important to consider the value of experience and expertise. Just as anyone can watch a Youtube video to learn how to fix a car, it's still best to rely on someone who has the experience and knowledge to do the job effectively.
There is no formal education for SEO, nor is there a certification program. With the constantly evolving nature of search engine algorithms, it's unlikely that one will be established. This is why you're paying for someone who has already read, learned, implemented, tested, and iterated on the various optimization techniques to help you appear higher in search results. You have a few options when it comes to SEO:
You can learn it yourself as a small business owner
Hire an in-house employee to handle SEO
Hire a freelance SEO consultant to address your needs
Look for a digital marketing agency to handle link building outreach, content marketing, and on-site optimization
Each option has its own set of pros and cons. Learning SEO yourself will take time away from running your business. Hiring an in-house SEO specialist needs to complement or work with your current marketing strategy or team. It can be time-consuming to vet freelancers or agencies and find the right fit with the skills and experience your business needs.
So the question remains: is it all worth it?
Can projecting ROI be done with PPC/CPC?
Digital marketing tools often provide estimated search volumes for relevant terms or phrases to your business. Some tool providers use monthly search volume numbers and multiply them by the cost-per-click data provided by the Google Ads API to calculate the "value" of your traffic. However, this approach falls short in several ways and can result in poor budget allocation and decision-making.
Firstly, even if you rank at the top of the search results, you can only expect to attract about 30% of the monthly search volume for that term, depending on the type of query. Therefore, multiplying the entire search volume number by CPC is not an accurate representation of the value of your traffic.
Secondly, the cost-per-click for paid search does not reflect how much money a click would earn for your website. Typically, only a small percentage of visitors, between 2.5-7.5% depending on the industry and familiarity with your brand, will convert into paying customers. Thus, this approach does not accurately reflect the value of your traffic.
How to Predict Traffic and ROI from SEO Effectively
There are a couple of approaches to estimating the ROI of SEO that can be useful:
One method is to compare the potential increase in your site's current organic traffic to the cost of the SEO campaign. This approach is straightforward and can give you a rough idea of whether your SEO investment is likely to pay off.
Another method is to focus on your target keywords and estimate the potential outcomes if you were to rank highly for those terms in search results. This approach allows you to assess the value of specific keywords for your business and get more detailed insights.
Method #1: Predicting ROI via a projected change in traffic
To put it in simple terms, you can calculate the potential ROI of an SEO campaign by estimating the percentage increase in organic traffic that you can achieve and multiplying that by your site's revenue generated by organic traffic in the past 30 days. This will give you a rough estimate of how much the campaign could benefit your business, which you can then compare to the cost of the campaign. However, it's important to ensure that your Google Analytics is properly configured to track the source of your site's visitors and their purchase behavior. For eCommerce sites, this is often easier because transactions are recorded and designed to integrate with analytics programs. If your business is affected by seasonality, it may be better to use an average monthly revenue figure for the calculation.
Method #2: Predicting ROI via search volume, CTR, conversion rate, and revenue per sale
To calculate your SEO ROI using the second method, you need to use a tool like Semrush, SeRanking, or Ahrefs to build a list of relevant keywords for your business and determine their associated search volumes. You can obtain these keywords by speaking with your salesperson or receptionist and reviewing support emails.
Next, use the search volumes and the organic click-through rate (CTR) of your site to predict your potential organic traffic. Create a spreadsheet and enter the search volume and organic CTR values for each keyword to estimate the amount of traffic for each search term.
To calculate potential conversions, sales, and revenue, you can use the average conversion rate for your industry or your own conversion rate. If you have a sales team, you can determine the percentage of leads from the site that they turn into customers to calculate the "sale rate." Finally, add a revenue per sale for the given keyword and multiply the number of sales by the conversions to obtain your potential monthly revenue.
Since you cannot rank #1 for every target phrase, you should estimate your SEO ROI projection based on relevant data showing your market potential.
Knowing your potential return on investment (ROI) is crucial before investing in SEO, even though it's usually a worthwhile investment.
Considering that SEO results are not immediate and its return on investment is realized over time, you can use the SEO forecast calculated earlier as a baseline for assessing the potential benefits of investing in SEO for your organization.
This forecast can serve as a reference point when evaluating SEO candidates for in-house roles or while selecting an external SEO consultant or agency. Alternatively, if you have more time than money, you can take advantage of the many resources available to learn about SEO and implement it yourself, resulting in increased traffic and revenue in the long run.