04-n01You’ve heard many times how important Search Engine Optimization (SEO) is. However, as a smart business person, you should be asking yourself why it is so important and how much money a first position is worth. Unless you know this, you won’t have a clue as of whether or not investing in SEO makes sense to your business.
Step 1: Calculate Total Traffic
You can use Google’s Keyword Tool to get an idea of the number of searches a certain keyword has. Let’s say that you want to rank for “hormone replacement therapy”. According to Google there are 74,000 people searching for that term every month.
Step 2: Calculate Your Traffic
According to SeoResearcher.com, the first position of Google gets 56% of the clicks. That means that if you are first on Google for “hormone replacement therapy” your site will get 41,440 visits from Google alone.
Step 3: Figure Out Your Conversion Rate
Based on your current stats, how many paying customers do you get for every 100 people that visit your site? For this example, let’s say that your conversion rate is 0.5%, which means that out of the 41,440 people that will visit your website, 207 will become paying customers of your hormone replacement center.
Step 4: Figure Out Your Net Profit per Customer
Let’s say that you make $300 from each of your customers. Multiply that by 207 and you can see that your first ranking is worth to you $62,100 per month!
It Gets Even Better
There are a few ways that you can benefit even more from SEO. First of all, if you rank first for “hormone replacement therapy”, you’re very likely to have top 5 positions for maybe 10 related keywords with similar search volumes. This can easily multiply your profits by three.
Also, don’t forget that these numbers are just for Google. Add Yahoo, MSN and Ask and your profit will be between 30% and 40% larger.
The conversion rate used here (0.5%) is really low. In most cases, more than 1 out of 200 of a website’s visitors become paying customers.
You need to take into consideration the lifetime value of your customers. People might find you through the search engines the first time and they might stay with you forever. They might also tell all their friends and family members about your company.