How Good SEO Ranking Makes Your Company Money
What does a bottom-line financial analysis even look like through an SEO ranking lens? It’s probably easier to show than tell, so let’s dive in.
A Closer Look at How SEO Makes You Money
Let’s say you run a tiny company, called Willow’s Pillows, that specializes in throw pillows. You’re small but mighty, and you can reasonably supply your product to any U.S. customer. You’ve done your homework, and you’ve set your single-pillow price at the exact market rate. Thirty dollars per pillow sounds about right.
Related: Improve your rankings with our SEO focus keyword cheat sheet.
At the time of this writing, approximately 74,000 people across the U.S. search for the term “throw pillows” each month — like most SEO ranking specialists, I can get that data from any number of paid web utensils (SEMrush, Ahrefs, Moz, etc.).
Assuming that standard click-through rates hold for this specific search category, approximately 30 percent of those searchers are going to click on the first result.
The Key Competitor
Let’s say that spot belongs to your chief competitor, Pillow Talk, and they convert about 10 percent of that traffic into a single-pillow sale ($30). Here’s their monthly revenue, just from this one search term:
([74,000 x 0.3] x 0.1) x $30 = $66,600
In plain English, we think Pillow Talk gets about 30 percent, or 22,200, of the total 74,000 searchers available because of its high-profile SEO ranking. It converts 10 percent of those monthly visitors, or 2,220, into sales. And if each of those sales is worth $30, they’re earning about $66,600 each month.
What it Means for You
Despite all your best efforts, your company, Willow’s Pillows, is stuck in the second-ranking spot. Pretty good, but here’s the rub — most data suggests the second-ranking spot draws just 15 percent of all searchers. We already know you price your pillows the same as your competitors; and assuming you convert your traffic at the same rate as the dreaded Pillow Talk does, your math would look like this:
([74,000 x 0.15] x 0.1) x $30 = $33,300
Ouch. You’re pulling in half the revenue of your closest competitor just because they’re beating you in the SEO ranking game. Granted, there are a lot of variables in play here; maybe you decide to raise your prices to boost revenue, or lower them to try and up your conversion rate. But the basic principle remains the same.
Now imagine if you were selling a product worth $300 instead of $30. Or how about $3,000?
This isn’t to say you should give up if your company is idling at No. 592 in the Google search results ranking. If anything, it’s quite the contrary. Moving up in the SEO rankings is almost always worth the cost, if you’re willing to put the thought, time, and effort into doing it.
So that brings us to the how. How do you move that needle? SEO is an incredibly important piece of your company’s digital strategy, and you now know just how much revenue you could be leaving on the table without it.
Building a SEO ranking improvement schedule is a whole other can of worms, which is why we wrote a whole separate blog about it. Check it out here, and contact us if you have any questions in the meantime.