How To Work Out Your SEO Potential

If you’re looking to invest in SEO then it’s worth finding out what the potential returns you can get from the channel are. There are a number of factors which you should consider to do this and doing the research required can be time consuming, but once completed can help determine the level of investment you may want to consider putting into SEO.

In order to get an idea of SEO potential you will need the following information:

  • Search volumes
  • Website and Sales Conversion Rates
  • Average Customer Values

Once you have the above information, it can be used to try and work out the potential value of SEO campaigns. Please note that each of these methods only provide estimates.

Maximum Potential

If you’ve done thorough keyword research then you should have an idea of the total number of searches done in your industry all together. This can be used to workout an estimate of what getting to position one for each of these keywords can bring in terms of traffic to your website. This can be done by using click through rate (CTR) studies such as this one by AWR. So if you’re looking at UK traffic you’re looking at 35% of traffic if you’re in position one. The formula for working out the amount of traffic is:

Search Volume x CTR = Estimated Traffic

From here you can work out how many sales you may get from the website. If you’re looking at an ecommerce site this can be easy as it’s just the conversion rate of the site. If it’s a lead generation site you will need to consider the leads to sales rate too. The formula for this is:

Estimated Traffic x Website Conversion Rate x Sale Conversion Rate = Estimated Sales

Once you have the amount of sales you expect to generate you can then get an estimate of the amount of revenue expected by multiplying it by the average customer value. If you don’t know the average customer value due to being a new business you may want to consider using the average product value. The formula for this is:

Sales x Average Customer Value = Estimated Revenue

From here you should now have the upper estimate of what you could achieve from SEO. However this figure may be unrealistic depending on your business and you may want to try and look at a more realistic estimate. You can do this by looking at:

  • A subset of keywords, this may be based on keyword difficulty
  • A percentage of overall search volumes, so you might look at getting to page 1 for 10% of relevant keywords.
  • A lower position on page one where you would use a different CTR based on the CTR study.

Improved Rankings Potential

If you’re running a targeted campaign aimed at improving the ranking of specific keywords that are already ranking then you might want to approach estimating the potential slightly differently.

The first thing you will need is the current rankings of different keywords as well as the search volumes for the keywords. From this you can work out the potential gain for each keyword and it can be used to calculate what each rank gain will mean for your business.

Below is an example of trying to improve upon a keyword ranking in 5th position which gets 20,000 searches per month.

So to calculate the extra potential if we get to position 4 we would do the following formula:

(Search Volume x New CTR) – (Search Volume x Current CTR) = Estimated Traffic Gain

For the example given above this would be:

(20,000 x 6.8%) – (20,000 x 4.9%) = 380

So the estimated new visitors by a single rank increase for the keyword would be 380. This can then be multiplied by the sites conversion rate and average customer value (this can be done at keyword level if data is available) in order to get the monetary value of the increase in rank.

So if the website had a 5% conversion rate (to sale) and an average order value of £50 the increase in rank would be valued at:

380 x 5% x £50 = £950 per month (£11,400 per year)

You should now have an idea of how you can get an idea of the potential of SEO for your business that can be a rough indication of whether it’s worth investing in SEO. It’s worth noting that these estimations also take things outside the usual scope of SEO such as conversion rate and average order values. If these are also worked on there can be even bigger gains from your SEO campaigns.

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