How much money could you make if you were ranking #1 in Google for your target keywords?
That’s an important question to answer because it tells you how much you can afford to invest in SEO. The problem is there is no one-size-fits all answer to the question. For one business the answer could be a few hundred bucks, but for another business it could be tens of thousands of dollars.
What’s the answer for your business?
If you’re not sure, then grab a piece of paper to take a few notes and dust off that old calculator you haven’t used since college. In this article I’m going to walk through the steps you need to take to calculate the potential return on investment (ROI) from local SEO.
Don’t worry, you don’t need to be an SEO expert or have a PhD in mathematical theory to complete the steps. I assume no experience and all you need is a basic calculator to add and multiple a few numbers together. If you don’t have a calculator then use Excel, Google spreadsheets, or the built in calculator on your computer.
OK, let’s get started. The first step is to complete some basic market research…
How Big Is Your SEO Opportunity?
The first question to answer is how big is your opportunity? In other words, how many prospects are really going to Google.com and searching for your service?
To answer this question, we need to use Google’s Keyword Planner Tool. You’ll need to sign up for AdWords in order to gain access to the tool, but don’t worry, you don’t have to pay for ads. Just create an account and skip all the steps to set up ads.
There are 4 options to use the Keyword Planner Tool and the one we care about is called, “Get search volume data and trends.” Click on that option and then type in some obvious keywords for your service. Since we’re talking about local SEO, we only want to use keywords where Google is showing the map with nearby local businesses. For example, here are a few keywords for a New York City dentist:
- “new york dentist”
- “new york city dentist”
- “10011 dentist”
- “nyc dentist”
I’m sure you could create a more robust list if you took 5 minutes to really think about this. The goal is to list all the relevant keywords prospects would search to find your service.
Next, select your location and click “Get search volume” and make sure you’re on the Keyword Ideas tab to the right of the Ad Group Ideas tab. The Keyword Ideas tab is where you’ll get the keyword data we need.
Now scroll down to see the total number of search impressions for each of the keywords you searched for in the tool. That’s the total number of times your prospects are typing your keywords into Google in your target location. That is your local SEO opportunity.
Hopefully at this point you’re looking at a fairly large number because we’re about to throw away a large percentage…
Will Everyone Click On Your Website?
In my example, I see about 8,400 searches for the keywords listed above in New York, NY. Does that mean I could expect to get 8,400 website visitors per month?
Every searcher is certainly not going to click on your website to go learn more about your services. That’s completely unreasonable.
According to studies about where people click on search results pages, you can expect about 40% of the searchers will click on the #1 listed business. That means if you’re ranked #1 for the keywords listed above, then you could estimate about 3,360 visitors per month.
If you’re ranked #10 (last on the first page of Google’s results), then you’re looking at only about 3% of the total searchers will click on your business. That’s only 252 visits per month.
So the difference in a #1 ranking versus a #10 ranking in my example is a whopping 3,000 visitors!
But unfortunately, we need to reduce this number even further…
How Many Visitors Will Become Customers?
At this point we know that a #1 ranking in Google could drive about 3,360 prospects to your website every single month. Of course, every visitor will not turn into a customer. In fact, the vast majority of your website visitors won’t even contact you! :(
Let’s say 5% of those visitors do eventually contact you via phone or a webform. Now we’re dealing with 168 leads.
Of those 168, let’s assume you could convert 25% into customers. That means you could potentially generate 42 new customers, or patients in my example. That’s if you were ranking #1.
What if you were ranking #10 in Google? You’re looking at about 3 new customers per month.
We’re getting close, but there is still one more step to estimate your return on investment…
“Show Me The Money!”
The final step to determine your local SEO return on investment is to estimate how much revenue you could generate.
To do that you’ll need to have an idea for your average customer value. In my example, let’s assume a new dental patient is worth about $1,000. That means a #1 ranking could generate about $42,000 in business each month. A #10 ranking could generate about $3,000 per month.
To calculate your ROI, subtract the monthly SEO costs from the estimated monthly revenue and then divide by the costs. Clearly, these are very rough estimates, but this should give you an idea for how big your opportunity is, and how much you could afford to invest in SEO.
Once you know local SEO is a good opportunity for your business, then the next step is to take action…
Follow The Local SEO Formula
On Thursday, February 25 at noon Eastern, I’m presenting the Local SEO Formula live training.
During this training, I’ll show you exactly how to get your business on the first page of Google’s local results, in as little as 30 days. This is one of our most popular courses, and we’ve updated it for February 2016 with our latest best practices and recommendations.
Plus, if you’re one of the first 10 people to sign up, you’ll receive an in-depth Local SEO Audit ($300 value) at no extra cost.