SEO can work wonders for companies that are using it correctly and have appropriate expectations. It can also be a huge failure and a major loss for those that use it improperly, or expect a magic cure-all. Good, solid SEO work is ongoing, and requires effort. It isn’t a stick-it-in-place-once-and-leave-it-alone-while-it-performs-miracles.
In this article, we'll address common questions, like:
- Why SEO works for some business, but not others
- What you can expect in terms of real numbers from your SEO campaign
- The single biggest damaging factor in website rankings
- How to gauge if you're getting proper ROI from your SEO efforts
SEO Work - What Are Appropriate Expectations?
First, you should understand that SEO is not a magic bullet that will suddenly make you a millionaire. It will however, if done right, increase traffic to your website and convert those visitors to leads, phone calls, new business, etc.
The number of new contacts you receive really depends on what you do for a living, and how well your site is optimized versus the competition in your area. If you are a commercial roofer and your average job is $50,000 you might not get as many leads as a plumber who has an average ticket of $250; so manage your expectations in a realistic fashion. There aren’t as many people in need of a commercial roofer as there are a plumber on a daily basis.
Sometimes unrealistic expectations are a combination of the client and the SEO not being totally realistic. To establish realistic expectations for your SEO success or failure, first figure out how many jobs you need monthly to get a decent return on your investment.
If you are investing $500 per month in SEO and your profit margin is 20% you need $10,000 per month in new business to justify the expense, because you should return (at the minimum) a profit of 4 times your investment.
With this example, if you are making a 20% net profit, then the return on investment is $2000 profit on a $500 investment, or 4 times. If you are running a 25% net profit, you need less in sales to make SEO profitable.
Another metric also works to establish your return, and that is the old business school, “always return 10 to 20X on any advertising investment” so that you keep your marketing expense between 5 and 10%. I am not saying that you will not make more money than this with a very good SEO firm, but this is the baseline to work from.
I’ve been performing SEO for many years and I often hear potential clients expecting to pay $500 or $600 per month and see $200,000 in new business monthly; this is usually an unrealistic expectation, and I tell them so.
I do have clients that pay $500 per month and see $30, 000 or $40,000 in new business. Upon occasion we see a six figure increase in monthly business, but this takes time. Even if your SEO team gets you 100 new page-one rankings soon after taking their work live, you may not see a 200X return on your monthly fee…yet. Good SEO gets better with time, and is constantly being tweaked and adjusted.
Also – keep in mind that you are not getting 4x on your money in too many investments on a monthly basis. How many times do your investments in the market quadruple on a monthly basis, and, if they have, how many months in a row has that happened?
SEO Is Really Good At Helping You Lower The Cost Of Acquisition Of A New Client
If you’ve ever watched that popular TV show where venture capitalists listen to entrepreneurs and decide to invest in them or not, then you know how important cost of customer acquisition is. On that show, the investors ask nearly every hopeful entrepreneur what his/her cost of customer acquisition is. Why do you think that is? This single question can tell an investor if the entrepreneur is a real business person or just a “wantrapreneur.” The cost of acquisition is the base of all marketing. What does it cost you to acquire a new customer, and is it in line with what it should be in order to be profitable?
So how does this relate to SEO? The best indicator of any marketing success, including SEO, is how many new customers the program generates, and at what cost. Earlier we talked about commercial roofers and plumbers. The roofer had an average ticket of $50,000 and the plumber $250. The cost of acquisition will likely be vastly different for each.
The plumber may have to keep his acquisition cost to about $25 and the roofer has a ton of leeway – he may be able to go to $500 or more and still be very happy. The plumber may factor in that he will do work for an average customer 6 times over 3 years, whereas the roofer may be a one-time thing.
Proper SEO generates the highest number of new clients at the most reasonable cost. One HVAC contractor that I handle pays $700 monthly and sees an average of 6 new installations monthly and 38 service calls from the SEO work. His cost to acquire a new customer is $15.90. The service call customers are likely to do business with him multiple times and the installations average over $7000 each. The average service call is $291. His monthly revenue from the SEO is around $53,048 and his cost is $700. That’s SEO working well for a business owner.
So, if SEO works well for one company, why doesn’t it work for another?
SEO only works when it is a well-oiled machine. The technical structure of the site is correct; the content provides both what the search engine needs and a great user experience; the links are correct; the schema is done right; the Meta title is right; and the description is a good marketing message. The calls to action on the site are correct, the client and the SEO are on the same page, and so on.
The biggest problem that we, as a professional SEO team that has optimized about 1,000 websites successfully, see is damaged URLs. What is a damaged URL? In a nutshell it’s a URL that has been penalized by Google – likely as a result of bad SEO.
This is just about always unintentional and done with the best of intentions. Perhaps someone has bought or somehow secured bad links and gotten penalized for their actions. They may have server errors – like pages that no longer exist and are still in the index.
We recently took on a nationwide site that sells a high ticket item and they had over 300 server errors that we fixed. Once we got them fixed, they got 4 leads within several days. In this case, the staff of the company had been blogging regularly, and, on occasion, taking down older posts without doing a 301 redirect or stripping them out of the index. This caused a ton of trouble. This was an innocent mistake by well-intentioned people – it still killed their rankings and traffic. There are many items that can hurt a URL, and they need to be fixed.
I mentioned the client and SEO have to be on the same page. Most businesses hire an SEO firm because they are not being found online, or are suffering from a bad conversion rate or high bounce rate, etc. This makes sense.
What may put them on a different page from the firm they hired is that the client wants to change what the SEO does. You hire us for a reason – you weren’t being found online, or weren’t converting your traffic to new clients. So obviously what you’re doing isn’t working well enough. Let the SEO do what is necessary to get what you want.
If you are a defense lawyer, do you allow your client to handle the cross examination because he thinks he knows best? Maybe he read something online about how to get acquitted on murder charges and wants to try it… I’m sure you get what I’m saying.
If you’ve selected an SEO firm with significant success, they probably showed you results of other clients, and even gave you clients to speak with so that you could hear from other business owners that the SEO is truly good. Trust the SEO. You do your business well, and the SEO does his/her business well, and that should be the basis of the partnership.
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