This may surprise you, but search engine optimization (SEO) is not a good investment for every business. As the owner of a digital marketing agency, it’s not easy for me to admit that because we provide SEO services, but it’s true.
For some businesses, SEO is simply not a great option versus all of the other marketing tactics available. However, for many businesses, SEO can be one of the best marketing tactics for generating qualified leads and sales.
So how do you know if it’s right for your business? How do you know if investing your marketing dollars in SEO is really a smart decision?
Answer the following 3 questions to find out…
Is There Enough Demand?
This one should be fairly obvious. For SEO to work for you, there must be qualified prospects searching online for your products or services. If no one is searching or if very few are searching, then it doesn’t matter if you’re ranked #1 in Google… no one will see you!
That’s why the very first step to determine if SEO is a good opportunity is to use Google’s free Keyword Planner Tool. Put yourself in the shoes of your prospect and type a few searches into the tool that you think your prospect would type into Google when they’re looking for your product or service.
The Keyword Planner Tool will then tell you how many times people search those phrases every month, along with additional related searches that you may not have thought of. Review the results to see if there’s enough demand for your products or services.
If you do see people are searching relevant keyword phrases, then it’s time to move on to the second question..
How Stiff Is the Competition?
When you think of your competition, then I’m sure certain businesses quickly come to mind. However, with SEO we’re not talking about your typical competitors. Instead, we need to look specifically at the “SEO competition.”
Your SEO competition is every other business that is already ranking for the keywords you found in Google’s Keyword Planner Tool. If you want to rank #1, then you’ll have to outrank all of those businesses.
That’s why the second step here is to determine the strength of your SEO competition. If the competition is stiff, then SEO might not make sense because of how much you would need to invest and how long it would take to get your business ranked high in Google. But if the competition is weak, then you can be confident moving forward with SEO.
How do you measure the strength of your competition? To get a rough idea, I recommend you use the free Moz Open Site Explorer tool. Copy and paste your competitors’ website URLs into this tool to review their domain authority, total number of links, and total number of websites linking to them.
Don’t worry if you’re not familiar with all of these metrics and don’t get caught up in the exact numbers. That’s not the point. The goal is to compare your competitors’ metrics to your own website’s metrics.
For example, you may find that the websites ranking on the first page of Google for your target keywords have a domain authority of 60 with thousands of links from thousands of different websites. Then when you review your own website you find that your domain authority is 10 and you only have 1 link. Clearly, you’re up against much stronger competition!
But if you see that your website’s domain authority is close to the top ranking websites (or maybe even higher) and you have a similar number of links, then you may be a good SEO match for your competitors.
OK, at this point we know there is demand and the competition is not too strong so there’s just one more question we need to answer…
Do the Numbers Make Sense?
The goal of SEO is not to rank in Google. The goal is to profitably generate leads and sales! It must be a profitable investment or it’s simply not going to work long term.
That means the numbers have to make sense. The numbers will be different for every business, but the process is the same. You need to make sure you can realistically generate more money than you’ll need to invest in your SEO. Simple enough, right?
So what are the numbers? The key numbers to review are:
- Number of searches for your target keywords (found using Google’s Keyword Planner Tool)
- Estimated click-through rate
- Estimated conversion rate from visitor to customer
- Total revenue per customer
Let’s go through an example so you can see this in action:
- 2,000 searches per month
- 30% click-through rate (assuming you’re ranked #1 according to this research.)
- 2% conversion rate from visitor to customer
- $500 revenue per customer
To calculate your estimated revenue from SEO simply multiply all 4 of the numbers above to get $6,000. Next, compare your estimated revenue to how much you need to invest in your SEO to determine if the numbers make sense.
That’s it! By going through each of the 3 questions above, you’ll know if SEO is really a good investment for your business.
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