How Much Is SEO Worth? A Simple Calculation
For some businesses, having good SEO is worth millions of dollars. Yes, millions.
For other businesses, having good SEO is worth $8,000 per month.
And for some businesses, having good SEO is worth $0.
In this guide, we answer the question of “How much is SEO worth?” by walking you through a simple calculation. By the end of this guide, you’ll know exactly how much SEO is worth for your specific business.
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How Most Companies Think About The Worth of SEO
You would be surprised, but many companies do not strategically think about the financial value of SEO.
We’ve heard companies say the following things:
Them: “We know we really need to invest a ton of money in SEO.”
Us (Portland SEO Growth): “Why a ton of money?”
Them: “If we were ranking for this keyword, we’d be crushing it!”
Us: “How do you know that?”
Them: “We were investing $6,000 per month in SEO and weren’t seeing great results. We probably need to increase our budget, huh?”
Us: “Well, what was your SEO budget being used for in the first place?
Our point with all of this?
Most companies operate based on assumptions when it comes to SEO and its worth. They think that they have to do something or create a campaign in a particular way, but they don’t know why.
They Don’t Think About SEO’s Worth Strategically
Many companies do not think about the worth of SEO in a strategic way. Below are some examples that explain what we are talking about.
1. They Don’t Track Metrics
When thinking about “is SEO worth it,” you must have transparent metrics that you’re looking at.
And many companies do not track their SEO metrics, such as:
- Keyword rankings
- Organic traffic
- Bounce rate
- Cost per web visitor
- Cost per lead
- Cost per sale
- The lifetime value of a customer
- And more
So here is the question:
How can you begin to understand what SEO is worth when you don’t have visibility into the metrics above?
2. They Don’t Determine ROI
Is SEO worth paying for? Well, the worth or value of anything comes down to ROI, or return on investment.
If you are going to be investing in SEO, then the idea is that you will make more money than what it cost to invest in SEO.
If a company was tracking data diligently, they could put together analytics that show that, hypothetically, they made $7,000 per month from SEO and only invested $3,500 per month. Therefore, they made a significant return on their investment and SEO was worth about $3,500 in additional revenue (minus the investment) each month.
However, most companies do not track this data. And therefore do not know the ROI of SEO.
Every Business Has a Different “Worth” For SEO
Every business that invests in SEO will have a different worth for it. Take a look at the examples below, and it’ll paint a very clear picture.
A Hairdresser vs. Lawyer vs. T-Shirt Company
Let’s compare a local hairdresser in Bend, Oregon to a divorce lawyer located in downtown Portland, Oregon to an online retailer of t-shirts.
- Let’s say that for the average hairdresser in Bend, Oregon, the value of a new paying client is worth $990 over their entire lifetime as a client.
- Let’s say that for the average divorce lawyer located in downtown Portland, Oregon, the value of a new paying client is worth $7,325 over their entire lifetime as a client.
- And let’s say that for the average online retailer of t-shirts, the average lifetime value of a new paying client is only worth $23.
Each of these businesses is going to put a different monetary worth on SEO.
For example, the lawyer can invest $5,000 per month in SEO and only get one paying client per month. That would still be worth it since they will have gotten a positive ROI from their investment.
However, for an online e-commerce site that sells t-shirts, for a $5,000 per month investment in SEO, they would need to sell hundreds and hundreds of t-shirts.
A Simple Calculation To Answer The Question “How Much Is SEO Worth To My Business?”
To determine the worth of SEO for your business, follow the simple calculation below. Answer the questions and you’ll find clarity into how much SEO is worth for your business.
What’s The Lifetime Value of a Lead/Sale?
First, you need to determine the value of a lead and a sale.
How do you do this?
Well, you need to track your data meticulously using a program like HubSpot.
Once you are able to determine the lifetime value of a sale, you can work backward from there.
How Many Sales Are You Currently Getting From SEO Each Month?
To determine the worth of SEO for your business, you need to determine exactly how many sales you’re getting from SEO each month currently.
Let’s do a simple calculation:
The lifetime value of one of your clients is $192. Currently, you’re getting 10 new clients from SEO each month.
These 10 new clients found you organically using Google. They did not find you from any other platform, thereby making the sale attributed to SEO.
Therefore, right now, SEO is worth $1,920 per month for you.
Why is it important to do this calculation?
The calculation above will give you a baseline or benchmark metric as to how much SEO is worth right now. Therefore, if you choose to invest in SEO in the future, you’ll know if it was worth it or not.
How Much Am I Spending Per Sale Right Now?
Okay, if we continue with the example above, we know that SEO is worth about $1,920 for your business.
The next question you need to ask yourself is “how much am I spending per month on SEO?
Let’s say that you’re investing $1,000 per month in SEO. And, as we discovered above, you’re getting 10 new clients per month from SEO. As a result, you’re spending about $100 per new client through SEO.
Again, you’re calculating this information to determine SEO’s current worth. Then, moving forward, you can calculate SEO’s future worth as well.
What are My One and Two-Year Goals?
Your one and two-year goals are very important when thinking about the worth of SEO. The calculations above are great, but they don’t fully encapsulate all of SEO’s worth.
Why don’t the calculations above give a perfect picture of the worth of search engine optimization?
The answer is that SEO takes time. On average, a new piece of content that is created for search engine optimization will take between three and six months to rank in Google.
Therefore, SEO is a way of investing in the future. And you don’t know how well you’ll rank in 12 months for a piece of content created today.
Here’s where it gets a little bit arbitrary:
The worth of investing in SEO is dependent on where you want to be in 2 years. If you want to dominate the SERPs in 2 years, you might have to invest $5,000 per month in SEO for the next 2 years, even if that means an initial negative ROI.
You might lose a little money in the first 12 months, but once you start ranking for super high-value keywords? You’ll begin to see a positive ROI.
If I Ranked First For My Highest Value Keywords, What Impact Would That Have On My Revenue?
At the end of the day, it’s important to ask yourself this question:
“If I ranked first for my highest value keywords, what impact would that have on my revenue?
For many businesses, that would mean 2x – 10x their current revenue.
So, are SEO services worth it?
If you can invest in SEO (using the best strategies) to rank well for your highest value keywords over time, then I assure you SEO will be worth it. You may not know it’s EXACT worth at all times, but you’ll know that it led to a positive ROI.
Contact our SEO consultants in Portland to learn more.