This article explains the importance of SEO sales forecasting for your business. We talk about specific metrics to take into account for building a reliable SEO forecast and provide a real-world B2B SEO forecast calculation example to illustrate how we estimate SEO sales and ROI for a B2B company.
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- What is SEO and why do we need it?
- Why is forecasting SEO traffic and sales important?
- Metrics for reliable SEO forecasting
- How to build a solid SEO sales forecast
- SEO sales forecasting for B2B: step-by-step calculations example
- What is ROI in SEO?
- SEO as an investment
What is SEO and why do we need it?
Search engine optimization, or SEO, is a strategy for improving a website’s rankings in search engine results.
It involves identifying which keywords and phrases your target audience uses when looking for products or services like yours, then working towards ranking well for those searches.
Search engine optimization is made up of many different elements, and being aware of what they are and how they work can really set your business apart from your competition.
SEO is an important factor for businesses as organic visitors tend to convert better and bring more value via higher retention rates and order amounts. This happens because people trust organic results more than ads that sit on top of them in search results. SEO is an investment that will bring in a lot of money for a business in the long run.
Why is forecasting SEO traffic and sales important?
Sales forecasting is one of the most essential processes in running a business. It determines how the company grows and can have a massive impact on valuation.
The sales forecasting process is a lot more than numbers and metrics, as it represents a company’s entire operating rhythm. When a team hits the KPIs month after month or quarter after quarter, the company can invest more and grow more confidently.
This usually means more marketing campaigns to support market share expansion.
Forecasting in SEO gives your business an idea as to what your performance will be if your rankings and organic traffic increase, and if actual sales and closed deals from this channel follow suit. An SEO forecast needs to show your traffic potential.
This is the estimated amount of traffic you will get when ranking for the keywords important for your business model, and a projection of sales and revenue you plan to generate.
However, in an industry as volatile as SEO, there is little to no value in trying to project trends based on existing data too far in advance for a multitude of reasons.
Therefore, most businesses employ a forward-looking cause-and-effect model rather than a predictive model based on past performance.
Let’s dive deep into the metrics that can be used for SEO forecasting.
Metrics for reliable SEO forecasting
There are a few important metrics that affect and accompany the SEO forecasting model, these include:
Organic traffic in sessions and users
The primary goal of SEO is to increase organic traffic by ranking for various niche keywords in search engines. The higher the number of organic keywords the website ranks for, the higher the number of organic users will land on the website.
Factors such as the competition for the specific search term, keyword difficulty, and the volume and popularity of the keyword play important roles in your ranking.
Users here mean the visitors on your site. These are actual people landing on your website, which means that if someone visited your site 100 times on the same device, it would still only count as one user (although a very loyal one as they made 100 sessions!). Google Analytics (GA) counts these as returning users with multiple sessions.
Session duration is the time users spend on your site. A session begins when they arrive and end when they leave the website. The session also ends if they remain inactive on your site for 30 minutes. A good session time generally starts from 2 minutes onwards.
The dynamics of your sessions and users show whether your traffic is improving, and by how much.
An impression is counted when a user has seen a link to your site in search results. In general, when search results are grouped into pages, such as in desktop results, a page will have just 10 results.
Whenever an item appears on this page, an impression is counted, whether or not it has been scrolled into view. For endless scrolled results such as image search on mobile, the item must usually be scrolled into view to count as an impression.
Impressions are the main indicator of your SEO trends: the growth in impressions precedes an increase in clicks and traffic.
Click through rate
Click-through rate (CTR) is commonly known as the percentage of people who click on your website on SERP (organic search results). The mathematical term would be clicks/impressions = click-through rate.
Your CTR in SEO can be improved in three ways:
- Maintaining a good position on search results (SERP ranking).
- Writing a clickable title and meta description (the brief snippets you see below the titles for each result on the SERP).
- Inserting Schema markup to win rich snippets that can boost your CTR up to 3 times.
The organic conversion rate tells business owners the average number of leads or purchases from organic search results that convert into revenue.
An example of an important metric is the conversion rate of organic users that ended up purchasing a product, service or any other goal that the website has established.
It is important to understand conversion rates and whether those conversions are well aligned with the industry benchmarks.
The current average conversion rate for B2B companies around the world sits at 2.23%.
The conversion rate for the top 25% of B2B companies is 4.31%.
Finally, the conversion rate for the top 10% of all B2B companies came to a staggering 11.70%.
If your B2B company converts at around 2.5%, it means that it is doing an average job amongst all other B2B companies.
If you already know your company’s average conversion rate and traffic within the industry, you can forecast your traffic and conversions for the following months to come.
Historical data & seasonality
Once you have your historical data set, start looking for outliers. The most common way to find outliers is to graph all your data and look for spikes in the graphs.
Each spike will be associated with an outlier, no matter whether it is spiking up or down. The longer and more complex way to analyze your historical data is to look at the mean and standard deviation, which will show you if there are any outliers.
Before counting the spikes as historical data to analyze your future traffic, keep in mind that it is worth determining if that certain spike should be part of your findings.
You must first figure out why the spike occurred in the first place, as it could be a seasonal fluctuation such as an off-season or peak sales during holiday times.
How to build a solid SEO sales forecast
Here is the ultimate recipe to build a solid SEO sales forecast:
- Take the sum of the estimated search volume of keywords you plan to target.
- FIgure out your potential search market share and visibility.
- Decide on a fair percentage of overall search volume that you can get.
This will set you up for a fair baseline for your SEO traffic forecast. Then:
- Take your current conversion rate and plug it into the forecast.
- Figure out your potential search market share and visibility.
Here you are set with estimating the number of leads, transactions, brochure downloads, and other target user actions.
Now, let’s look at the money part:
- If you hire an SEO agency, take their monthly fee and all other amounts you pay them and calculate your cost per conversion. Or…
- If you handle your SEO effort in-house, take your staff salary and overheads attributed to these costs to calculate the cost per conversion.
NOTE: This doesn’t have to be perfect. You need to understand the rough numbers first.
- Project the actual sales you can make out of these conversions. In B2B, this would be your Lead – MQL – SQL – Sales ratios.
- Project the revenue based on your average sales amount. For B2B, this can be an average contract.
Viola! Now you see how much money you can make from your SEO investment!
SEO sales forecasting for B2B: step-by-step calculations example
Here is the ultimate recipe to build a solid SEO sales forecast:
Let’s illustrate the above forecasting process with a step-by-step example.
Niche: Salesforce consulting (very heavy B2B!)
Services provided: Salesforce administration, integration, and consulting.
Target keywords example: salesforce administration, salesforce consultants, salesforce administrator, etc.
Step 1. Keywords search volume
Let’s estimate monthly search volume for target keywords (we will be using SEMRush Keywords Magic Tool for this, but you can use any keyword research tool you’d like):
Take a look at the Keywords Variations: the potential monthly search volume is 15.4K searches. Let’s filter them to focus on B2B services:
Now we have a very relevant list of keywords with a total volume of 11,880 searches per month:
Let’s take a real-life example. Our long-term client and partner, OMI, successfully provides this type of services. Knowing their current rankings for these keywords (and they are ranked high as they have been continuously investing into SEO, see their full case study here), we can estimate that, potentially, they can take up to 1.5% of all search volume for these keywords.
Note: always mind the competition and your current average website rankings when making such estimates. As a rule of thumb, a new website will not get high the rankings and therefore traffic, so if you are just starting up, this will be more of a benchmark example for your future SEO growth and targets.
Step 3: SEO traffic estimate
This group of keywords can potentially give us: 11890 x 1.5% = 178 clicks to OMI’s website a month.
Now, let’s apply further assumptions to this number:
With these numbers in hand, OMI can justify their investment into SEO by looking at the amount of revenue this channel generates for the business!
What is ROI in SEO?
Measuring the return on investment (ROI) in SEO, like every other marketing channel, measuring the ROI (return on investment) in SEO is important for evaluating the success of your SEO activities.
The SEO strategy should always demonstrate ROI that can help you put a significant monetary value of your SEO efforts into perspective.
While ROI will differ for each company that invests in SEO marketing services, there are ways to reasonably forecast the potential value of this channel for your business.
Remember, that branded keywords tend to do a lot better and will bring more traffic and organic conversions if the company is already well established.
Calculating ROIs is quite a straightforward task in most online marketing channels, like Pay-Per-Click (PPC) advertising.
In PPC campaigns, you can easily define the amount that you invested in a given period of time. For instance, the amount you paid for each click on your ads (the cost of the PPC campaign) plus the agency fee (if you are outsourcing a team) or the cost of your in-house team.
SEO ROIs become more challenging because, unlike PPC, there is no actual cost per click involved in organic searches, where a certain amount of traffic is guaranteed for a certain amount of money.
SEO is all about gaining better visibility on Google and other search engines, thus it is challenging to directly measure the impact of SEO efforts on organic revenue through metrics like impressions and clicks.
However, the above example demonstrates the framework for solid SEO forecasting for startups and e-commerce businesses, where you can project not just traffic, but also actual conversions and sales.
Another challenge for measuring SEO revenue directly from organic traffic is the time lag between your actions and results. Sometimes it can even take up to 3 to 6 months for SEO to show results – depending on the indexation, crawl budget, domain authority of your website, and many other factors.
This means that SEO is not a quick-fix tactic, and SEO activities that are performed during a particular period of time won’t impact the traffic overnight. In fact, SEO is a sustainable, long-term strategy to grow your website.
How do you measure the ROI on SEO?
There are no golden rules or formulas to measure SEO ROI 100% accurately. When you are estimating the ROI in SEO, the general rule is to track how much you are investing in SEO and how much you are getting back as SEO revenue (in the long run).
“SEO Cost” is the amount of money that you spend on the SEO efforts whereas “SEO Gain” is the amount that you earn from SEO.
If you are hiring an agency, SEO cost is much easier to calculate as you generally pay an agency fee and have a certain direct costs budget.
You don’t have to break down any costs by spending your money on different tools, technology, specialists, and management.
If you are managing SEO efforts internally, you will need to know your SEO person/team gross hourly rates, the approximate amount of hours spend on running your SEO activities, and any overheads (tools, links budgets, etc).
In most cases (especially low DR and newer websites), SEO can take some time to show progress. When doing SEO forecasting in such cases, you can also measure the ROI on SEO by considering the first two months as an investment and the next two months as an SEO ROI and keep the cycle going.
SEO as an investment
Search engine optimization does not happen overnight. It is a long process that can take months to show benefits. Although waiting may be a daunting task, it will all be worth it once your website ranks higher than the rest of your competition during a Google search.
These results can’t be negotiated or purchased, they must be earned through great content and hard work, and once that is achieved then your website will remain in the top, until someone else comes along who manages to conduct better SEO.
Many would argue that SEO is highly unpredictable due to the fact that the full Google algorithm is still unknown, and that even some serious optimization efforts can sometimes go to waste.
We would argue this, as our practice with hundreds of optimized websites shows that properly search engine optimized projects stay on top of the most comprehensive algorithm updates.
This is the foundation of our approach to SEO forecasting as well, as we saw direct cause and effect relationships between investment into SEO and business results.
This makes the Rampiq team a reliable partner, as our agency has a lot of experience in forecasting and driving great SEO results for our partners.
Liudmila is one of the best-in-class digital marketers and a data-driven, very hands-on agency owner. With top-level education and experience, Liudmila is a true expert when it comes to digital marketing strategies and execution.