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Cost vs. Return on Investment in SEO
Why it makes good sense
Many people who are otherwise good sound businessmen and women balk when it comes to the idea of paying for SEO services. “It’s too expensive” is a common refrain. But is it really?
Setting the initial cost of SEO aside for a moment, let’s think about what you hope to achieve from optimizing your site for the search engines. Naturally you hope to draw more visitors to your site. You also hope to turn those visitors into customers, with good content and products or services that are worth the price you charge for them. The more customers you can draw, the more money you’ll make. This is where ROI (Return of Investment) comes into play.
For the sake of keeping things simple, let’s say you get 100 visitors to your site per day; and that only about 20% of them will actually become customers. Assume that this 20% spends an average of $10 apiece at your site; a small amount, and your customers will probably spend more than that. But let’s keep it small for the moment. You’re making $200 a day, or about $6000 per month.
100 New Visitors
• 100 New Visitors X 20% = 20 New Customers
• 20 New Customers X $10.00 = $200.00 Per Day
• $200.00 Per Day X 30 Days = $6,000.00 Per Month
Now, let’s assume that you spend $2,000 in a month on SEO services. Looking at it as a cost, it does seem expensive; $2,000 out of $6000 is one-third of your profits. But, SEO is all about bringing in more visitors, and turning visitors into customers. Assume that your SEO doubles the amount of visitors you receive. Again, we’re thinking small here; SEO will surely more than double the traffic your site receives.
200 New Visitors
• 200 New Visitors X 20% = 40 New Customers
• 40 New Customers X $10.00 = $400.00 Per Day
• $400.00 Per Day X 30 Days = $12,000.00 Per Month
Now you’re getting 200 visitors, 40 of whom become customers. Instead of $6000 a month, you’re making $12,000. And the “cost” of that $2,000 of SEO becomes only about 1/6 of your profits, instead of 1/3. But it doesn’t stop there. The next month, you pay the same “cost”; $2,000. And again, your website traffic doubles. Just doubles, no more! Again, if you have a good product or service and a good SEO company, it will probably more than double. But assuming it only doubles, you’re now drawing 400 visitors per day, 80 customers per day, and making $24,000 per month. The ROI makes the initial cost insignificant, if not completely irrelevant.
But let’s make sure we don’t overestimate.
400 New Visitors
• 400 New Visitors X 20% = 80 New Customers
• 80 New Customers X $10.00 = $800.00 Per Day
• $800.00 Per Day X 30 Days = $24,000.00 Per Month
| Marketing Pros
| Long Term Benefits
| Relevant Inventory
| Customer Retention
| Maximum Reach
| Online ROI
If your business is worth your effort, its worth the ‘cost’ of SEO
In almost every other aspect of business, it’s a well-known fact that you must spend money—capital—in order to make money. You had to spend money to set yourself up in business; in fact, you probably paid someone to design your website. But if you’re not spending the money for effective website marketing and promotion, then people may never find your website. And people who can’t find your website can’t purchase your products or services.
In the end, it comes down to a question about yourself and your products or services. Can you look yourself in the eye (in the mirror, if you must do it literally) and say, “People would buy my product/service if they knew about it”? If the answer is No or Maybe, then whether or not you should spend money on SEO isn’t the question; you should consider going back to the drawing board and asking yourself whether your business is, in fact, as strong as it should be. If you cannot honestly say that if someone was searching for the product or service you sell, and they came across your site, they would choose your product or service, then SEO isn’t the issue; your business needs some rethinking.
But we’re assuming that you’re going to answer Yes to that question; you’ve done your homework, and you know that you have a good product or service, and that people who want that product or service would choose you if they knew you existed. And that is what SEO is all about. Assuming you did your homework and selected a good strong SEO company to begin with, you need only fear not making back the cost of your SEO if your product or service is mediocre. But when you combine a good product or service with good SEO, then the cost of that SEO ceases to be an issue. You don’t skimp in your offline marketing, even when its ROI is cannot be measured; why should you skimp online, when the internet is the businessman’s most powerful marketing tool and its ROI can be measured?