ROI With Search Engine Marketing
Justifying Search Engine Marketing
For good reason executives often site an intangible Return On Investment (ROI) for their Search Engine Marketing efforts. This is typically true of most “agency” style marketing and advertising in general. At least in the old style off-line world.
Today, the Internet enables business owners to track just about everything they’re doing online. And… If it can be tracked, it can be measured. And… If it can be measured, you should be able to calculate an ROI. Even so, your may have non-monetary goals like implementing a prospect or customer survey, where your goal is measured in the number of of qualified responses without any intention of selling them anything in the process.
Customer Value
In order to use web metrics effectively, you must first understand the value of a customer for your business. You may have different kinds of customers, which will require different segments and calculations, but in the end if you know your profit margin per customer or prospect, you can calculate an ROI based on the cost of acquisition of that customer.
For example, if your typical customer generates $2,500 during a one year period and has a life-cycle of 3 years and your profit margin is 15%, you know that your profit per customer, on average, is $1,125. So, as long as you’re spending less than $1,125 to acquire that customer, you’ve got a positive ROI. If it costs you $1,500 a month in Online Marketing to generate 10 new customers, then you have 10 x $1,125 or $11,250 - $1,500 = $9,750 in profit more than you would have without your Online Marketing Efforts.
Those online marketing efforts may include Search Engine Marketing, Search Engine Optimization, Seo Services, Social Media, Article Marketing and other Internet Marketing services. The size of your market, online competition, value per customer and available resources all determine how much you can ramp up an Internet Marketing effort for your business.
Web Analytics
One last comment about enabling web analytics for your website. Whether you’re primarily using Search Engine Optimization (SEO) techniques or Pay-Per-Click (PPC) and other Search Engine Marketing Strategies, effective statistical tracking is critical to your online success. Web analytics enable your to identify what visitors do once they land on your website. You can track who your visitors are, what they are entering into the search engines to find you, what parts of your site they are interested in, their path through your site, and even how well you’ve been able to guide them through your online sales funnel. You can even track phone calls, build a list of prospects and track repeat visits.
Of course, all of this takes time and effort, but outsourcing to an expert SEO Services company who can leverage their assets and expertise over a base of customers can almost always deliver more value that a company’s attempts to implement search engine marketing inhouse, providing a higher ROI than previously thought possible.
Author Steve Josephs is owner of Intellidon Marketing LLC, a Search Engine Marketing and SEO Services firm specializing in attracting new customers for local businesses through Online Marketing Strategies. See Wikipedia definition of Search Engine Optimization.
