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SEO Cost Calculator: How Much Should You Budget for SEO Services?

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Chuck Price
Chuck Price VIP CONTRIBUTOR
SEO Cost Calculator: How Much Should You Budget for SEO Services?

How much should you budget for SEO services?

Countless business owners and SEO service providers struggle with this question every day.

Because the web doesn’t operate in a vacuum, the specific requirements for a successful campaign can (and do) vary widely.

In short, it comes down to a matter of positioning – how does your website compare to your competitors. That position and how fast you want to make progress are the top variables for determining budget.

Expectations & Reality

A recent survey reported that less than half of all small businesses have an SEO budget.

Of those with an SEO budget, the majority (17 percent) spent less than $100/month. That’s right – 71 percent of small businesses budget $0 – $99/month for SEO.

This is further supported by the inquiries I receive from prospective clients.

Here’s the breakdown for the week of July 25 – Aug 1, 2018 (a pretty typical week):

SEO Budget

This is why your inbox is spammed with promises of “guaranteed first-page results” for $99.

SEO spammers know the market. Their promise of first page results is hard to resist.

And let’s face it; most business owners have no idea how SEO works. They are far too busy running their businesses to spend time learning SEO.

In most businesses, there is a standardized step by step process to get from point A to point B. Many assume that SEO works the same way. They treat it as a commodity and have no qualms about using the lowest priced vendor.

The Cost of Cheap SEO

I belong to a number of internet marketing groups on Facebook. It’s truly frightening, the number of noobs posing as SEO professionals and taking on clients.

It’s not uncommon to see a question like: “I just landed a client that wants to rank for “keyword x” – how do I do it?”

A close second is the use of link schemes, specifically private blog networks (PBNs), without ever explaining the risk to clients.

If business owners were just throwing money away, by hiring an incompetent SEO, that would be bad enough.

Unfortunately, the collateral damage from “cheap SEO” can go much deeper. It can draw a Google penalty and virtually wipe out a website’s visibility on the web.

Business owners need to keep in mind they’re ultimately responsible for any SEO work performed on their site. They should discuss the specific tactics to be used, before entering into an agreement.

I would encourage any business owner that’s in it for the long term, to insist on using tactics that comply with Google Webmaster Guidelines.

Managing Your Resources

With Google utilizing 200+ (likely exponentially more) ranking factors, it’s easy to become intimidated and paralyzed.

The good news is that if you focus on just three factors, you can still crush it, regardless of niche.

Here’s what you need to pay attention to:

1. Information Architecture

Your site should:

  • Be crawlable and accessible to search engines.
  • Follow Google Webmaster Guidelines for SEO best practices.
  • Perform at the highest pagespeed possible.
  • Render cleanly on mobile, tablet, and desktop devices.

2. Content

Your content should conform to best practices as disclosed in the Search Quality Ratings Guidelines with an emphasis on:

3. Backlinks

  • Your backlinks must be natural. Avoid popular link schemes like PBN’s and paid guest posts. Instead, focus on building real links that boost SERPs.
  • Quality is key. A lower number of high trust/high authority/relevant links can outperform a large quantity of lower quality links.

You Manage What You Measure: Set Goals

Before establishing a budget, one needs to determine goals for a campaign.

At one time, success was measured solely by keyword rankings. While ranking position remains an important metric, they are not the most important metric.

I would argue the most important metrics are those with a direct impact on the bottom line. Organic sessions, goal conversions and revenues fall into that category.

Goal setting could include:

  • Improving organic sessions by x percent.
  • Increasing conversions by y per month.
  • Increasing revenues by z percent.

When setting goals, it’s important to keep a few things in mind.

  • Your goals need to be measurable.
  • They need to be achievable. Stretch goals are fine, but pie in the sky benchmarks can actually work as a disincentive.
  • You need to give the campaign time to work. According to Google, “in most cases, SEOs need four months to a year to help your business first implement improvements and then see potential benefit.”

Developing a Budget

Your goals will determine what tactics are needed for success.

This, in turn, sets up a framework for developing an action plan and the budget necessary to support that plan.

This brings us full circle to positioning and paying attention to those factors that move the dial.

  • How does your information architecture stack up against competitors?
  • How does your content compare to the competition?
  • How does your backlink profile look relative to the top-ranked websites?

The answers to those questions will determine priorities as well as the volume of work needed to reach your goals.

In many cases, the actual work performed is the same – regardless of budget level. The difference is the volume of work performed.

If you’re adding twice the content and twice the links at budget level “B” vs budget level “A” you have a higher likelihood of achieving earlier success at the higher budget.

That said, the right budget is one you can afford, without losing sleep, for a minimum of four (and ideally 12) months.

It takes time to properly plan, implement and tweak a campaign in order to evaluate its success.

Also, the lower the budget, the longer the journey

How Much Can You Expect to Spend on SEO?

If you are hiring a top-level SEO company to execute a local campaign, expect to pay $500+ per month.

A national or international campaign will require a minimum budget of $2,500 to $5,000 month.

Some firms offer a “trial package” at a lower price, with no contract. This allows prospective clients an opportunity to test their services, by minimizing risk.

If you can’t afford to retain a top level SEO, there are some options. The most common being a one-time website SEO audit with actionable recommendations.

Just fixing your website will often lead to a meaningful boost in organic traffic. Content development and keyword analysis are other areas where you can get help from a pro for a one time fixed rate.

Another option is to become an expert and do it yourself.

SEO Cost Calculator: Measuring Organic Search (SEO) ROI

Following is a calculator commonly used (incorrectly) for measuring return on investment for SEO.

ROI Calculation for SEO Assuming ‘One-Time Sales’

Product Sold: The Coolest Thing Ever!
Quantity of new customers acquired via SEO, that converted into a sale, during the month20
Average net profit on each Coolest Thing Ever! Sold$50
Total net profits from the newly acquired organic search customers (# New customers X net profit)$1,000
Monthly Marketing Expense (Budget)$2,500
Profits from new customers ($1,000) divided by SEO marketing budget ($2,500)ROI = -60%

The flaw in the above calculator is that it fails to take into consideration the lifetime value of a new customer.

Online retailers need repeat business, in order to grow. By not calculating the lifetime value of a new customer the true ROI is grossly understated.

The right way to calculate ROI is to build lifetime value into the calculator as seen here:

ROI Calculation for SEO Assuming Lifetime Value

Same Product: The Coolest Thing Ever!
Quantity of new customers acquired via SEO, that converted into a sale, during the month20
Average net profit on each Coolest Thing Ever! Sold$50
Total net profits from the newly acquired organic search customers (# New customers X net profit)$1,000
Average number of orders projected, per newly acquired customer, over a “Lifetime”5
Total projected lifetime profit (Total Net profits X Number of  Average Lifetime sales)      
$5,000
Monthly marketing budget (expense)$2,500
Projected lifetime profits from new customers ($5,000) divided by SEO marketing spend ($2,500)ROI = 200%

As you can see, that one variable makes a huge difference in how the ROI is stated.

The Takeaway

Unlike PPC, an organic search campaign won’t yield immediate results.

A comprehensive SEO campaign will involve a combination of technical SEO, content marketing, and link building.

Even when executed to perfection, it takes time for Google to recognize and reward these efforts.

That said, the traffic earned from these efforts is often the most consistent and best converting among all channels.

More SEO Resources:


Image Credits

Featured Image: geralt / Pixabay
Screenshot by author, August 2018

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Chuck Price

Founder at Measurable SEO

Chuck Price is founder of Measurable SEO and former COO of We Build Pages (now InternetMarketingNinjas.com). He's been in digital ... [Read full bio]

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