We know that organic traffic is valuable. It’s the holy grail for many marketers who monitor their organic traffic results obsessively, hoping for them to go up?
But what is a good ROI for businesses, especially multi-location businesses? What should you be shooting for? Where should you put a stake in the ground?
There is no “right” answer because every industry and business is different. If you’re selling pizza, your marketing costs are very different than if you’re selling luxury boats, for example. There are, though, some things we do now about driving strong local SEO results for businesses of all kinds.
For instance, we know that organic search, done well, has historically been at the top of the list for local businesses in terms of both effectiveness and ROI. The reason for this is twofold:
Organic search connects local businesses with consumers in their markets who are actively searching for what they have to offer. This high level of intent is the holy grail of marketing. No other channel can put you directly in front of consumers actively looking to buy.
Organic search is earned and not paid so you don’t pay every time someone clicks on your listing. For multi-location businesses, specifically, if you do a good job of implementing an effective local SEO program at scale, you can really drive down your marketing costs per location--while driving up incredible results. We have clients that are driving leads through organic search programs at less than $2/lead when their next most cost-effective lead source is at more than $50/lead.
Let’s take a look at how this works.
Step 1: Choose 25-50 keywords that are important to your business
When customers, or potential customers, are looking for what you have to offer, what are the words and phrases they’re likely to use to find businesses like yours? These words and phrases represent the search terms that will be important for you to incorporate into your website content to boost the odds that you’ll show up in top search results.
Step 2: Establish your rankings in each market.
For each of the terms you’ve identified, establish your rankings in each local market. Obviously, if you’re a national brand and hoping to improve local search efforts for franchisees, dealers, agents, or other local representatives of your brand, determining your current level of local search visibility for each market can be a challenge. Google has become increasingly stingy over the past several years in sharing this data so you may need to extrapolate from that national data to determine an estimate of current organic search level for local sites.
Tools like Google Search Console can help with this and there are other tools out there that can give you a starting point as well. The key is to develop a baseline for where you’re at now.
When we do this we like to look at a year’s worth of data because it shows us seasonality and shifts over the year. Then we look at the data month by month to see shifts and trends.
Step 3: Determine desired percentage increase in organic traffic
At this step you will determine the percentage of increase in traffic that you can obtain by improving your average ranking across all of your keywords and local markets by looking at search result page click-through rate (CTR) studies like Advanced Web Rankings tools.
Step 4: Establish current level of organic traffic
Determine the current level of local organic traffic you are getting from local search by looking at the organic traffic generated by your current location pages or local sites.
Step 5: Determine expected new organic traffic
Multiply what you determined in Step 3 by the traffic you are currently getting (Step 4) to determine your expected new organic traffic.
Step 6: Establish your current conversion rate for local traffic
Looking at your conversion rate, or overall website traffic conversion rate, for things like leads generated, incoming calls, filled out forms, chat sessions, etc., determine your current conversion rate. For instance, if you are getting 100 organic visits to your site daily which generate 10 leads, your conversion rate would be 10%.
Step 7: Determine your sales close rate
Here you will determine the percentage of sales generated from your leads to calculate a close rate. For instance, if for every 10 leads you achieve 3 closed deals, your sales close rate is 30%.
Step 8: Determine average revenue per sale and profit margin
To determine expected revenue, multiply your expected new organic traffic by your conversion rate to calculate your expected number of new leads. Then multiply your expected new leads by your sales close rate to calculate the number of new customers. Next, multiply the number of new customers by average revenue per customer to get your expected new revenue.
Finally, multiply your expected new revenue by your profit margin to get your total expected profit from your local SEO organic search efforts. Once you have your expected profit, apply standard ROI calculations.
Whatever you’re selling, this 8-step process can help you determine a good ROI for you. It’s a simple way to quantify the impact of your organic visibility efforts on a local level. Over time, as you become more sophisticated with tracking and calculating your ROI and gain more knowledge about your own unique conversion and cost figures, you’ll be able to fine-tune your approach and offer better information to senior leaders to quantify the value of your organic marketing efforts. This same approach can also be used to demonstrate desired ROI for other marketing efforts like digital ad spend, for instance.
What’s a good ROI for your multi-location businesses? We’ve created a tool that can help you calculate ROI. It’s a tool that we use with our clients and we’ve found that it offers important insights whether you’re just beginning or well advanced into your organic ROI efforts. Here’s a link. Take a look and use it yourself to establish a baseline and some goals, or let us know if we can help.