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A quick SEO for SME case study with ROI calc
2011-08-06: Here's a quick case study for my search engine optimisation (SEO) involvement with a company that sells a subscription product at $15 a month (ignoring upsells that could be quite lucrative).
SEO is the generally accepted (but controversial) term for improving your web presence (website and other things like Twitter) so that you rank higher in Google for relevant searches by prospects who might want to buy what you sell.
It's something you can do continually, and you should if your market is competitive. But this project was for a short period.
It's not a showoff story, nobody's driving a Ferrari by the end, it's just a peek inside the basic financial argument of everyday business-building SEO for a small business or SME.
This client is already well embedded in a community and gets many of its sales through word of mouth and simply being known, but at the same time there is plenty of opportunity to reach people who aren't deeply involved in the scene, those who simply type their requirements into Google and want a solution.
My initial involvement was just for an hour a week for ten weeks and we covered on-page optimisation (the words on the website) as well as off-site optimisation and link-building. Not in any major way (10 hours doesn't allow for that), but enough to see a threefold rise in traffic from Google. That traffic also converted well, better than overall site traffic, and three times better than traffic that came direct to the site.
Normally Google is the biggest source of traffic to a site. In this case, it's the community. But I got Google to be their second best source of new business.
Interestingly, Google traffic was more tentative, wanting to see the stats and data before pressing a [buy] button on that page. Visitors from community sites seemed to be pre-sold, simply pressing the [buy] button on the home page.
Anyway, I worked out the break even point on this client's investment in my SEO, and it's 6 months.
So in month 1 let's lump all my costs there, $652, and he made 4 extra sales so got an extra $60 in sales. Let's assume a 50% markup, so after costs he had $30 spare, so his bank was down by $622.
In month 2 and thereafter, I did nothing, so now he has 8 new clients, $60 of additional profit to offset my costs and his bank is only down $562.
In month 7 he's up by $210 profit, and his bank is $188 in the black.
By month 12 he's up by $360 profit in that month, and his bank is better by $1,688, here's the basic spreadsheet. So he invested $622 and turned it into $1,688 plus his initial punt in just a year. After a second year he'd have an extra $8,348 in the bank.
In terms of marketing being ballpark 10% of turnover, I reach that after about 14 months.
That's ignoring upsells and any dissatisfied customers who leave .. but he doesn't get any of the latter.
So, that's all fine and dandy, but actually Google is still the source of only 22% of his new clients, the rest come from other places so my next task is conversion.
If I can improve his website conversion, lets say by 25%, then he'll get another 9 clients per month. The third worksheet on that spreadsheet shows the predicted effect after a year if we could achieve that. Basically it turns an investment of $1,118 into $5,235 in a year.

By John Allsopp
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