Growth and visibility are important constituents in this fast-paced world of Software as a Service; search engine optimization will be inexpensive and offer an organic way to grow the inflow of potential customers.
The SaaS market is expected to reach $716.52 billion by 2028, growing at a compound annual rate of 27.5% from 2021 to 2028 as per TBDC.
However, like with any investment, finding out the ROI of your SEO efforts is crucial to make sure that you are implementing strategies that pay off. In this blog, we walk you through the details of SaaS SEO ROI Guide, the ways to measure it, and what to expect at different stages of your SEO journey.
What Is SaaS SEO ROI?
SaaS SEO ROI is the financial return one gets from efforts against the amount invested. It basically measures how effective your strategies for SEO are at growing revenue.
It is somewhat complicated in the case of SaaS companies to readily measure calculated ROI because of the business model followed, the revenue being subscription based, and the sales cycle being relatively long. However, the ability to understand that ROI becomes essential to justify continued investment in SEO and optimize your strategies for better outcomes.
How to Measure the ROI of Performance SEO?
Measuring the ROI of SaaS SEO is crucial to understanding the effectiveness of your strategies and justifying your investment. Here’s a streamlined approach to calculate and evaluate SEO ROI for SaaS:
1. Calculate Revenue from Organic Traffic:
Employ Google Analytics and other useful tools to track revenue from users who are arriving from organic searches. This can be in the form of direct sales, subscriptions, or any other kind of revenue that was directly due to SEO efforts.
This ensures that you segmented your data by looking at only organic traffic; all other channels/sources have been filtered out.
2. Determine Total SEO Costs:
That will cover any SEO expenses for content creation, technical action, link building, and tools or software, which support such activities. Don’t forget to include associated labor expenses, whether outsourced to an agency or incurred because of an in-house team conducting SEO exercises.
3. Use the ROI Formula:
Apply the formula:
This will give you a percentage that reflects the profitability of your SEO investment. A positive ROI indicates that your efforts are generating more revenue than they cost.
4. Track Long-Term Metrics:
Compounding ROI from SEO is most common. Also track CLV and CAC not just from the direct revenue from organic visitors, which will mean you are looking not only at the long-term value of your SEO investment but also the actual profit.
5. Consider Attribution Models:
Multi-touch attribution models can be used to better understand how SEO fits within the context of the broader customer journey. This goes without saying for SaaS companies, where it is common for a customer to interact with multiple touchpoints on an estate prior to conversion.
6. Regularly Review and Adjust:
SEO is not a one-shot deal but rather an ongoing process. Periodically review the performance of the strategies; optimize and make changes in line with what works, and importantly, reassess the ROI so your efforts remain profitable.
What’s a Good ROI in SEO?
An effectively executed ROI for SaaS SEO is between 500% and 900%; each dollar you spend on SEO brings you five to nine dollars. In fact, this is based on how competitive your industry is and the ages and types of strategies you will use in your SEO.
In this regard, early-stage and mature companies can ideally have a diversity in ROI projections first, with the early ones building the basis of what is mostly a long-term return on SEO efforts.
Add to this customer lifetime value for SaaS, and the latter will grossly maximize this overall ROI from such efforts. If 500% gains were an effect of a really good SEO strategy compounding over time, its returns are already very high at this point. Due to compounding, that offers a potential baseline of somewhere around 500% ROI, but only up and beyond as that strategy matures.
If You’ve Been Investing in SEO for less than 6 Months
For businesses that have invested in SEO for less than six months, it is about managing expectations. SEO is a long-term strategy; the results at the beginning will be modest. Foundational components to focus on include technical SEO, content creation, and generating backlinks during this period. Some of these early metrics for success may include huge organic traffic and better ranking positions for targeted keywords. However, significant return on investment might not appear yet.
If You’ve Been Investing in SEO for > 6 Months
Now, after six months of rigorous SEO work, there will be more concrete results. By this period, your content may start ranking for the first page of search engines for targeted keywords, thus increasing organic traffic and conversions. Calculated ROI at this stage of work should already show a positive trend. You will be able to start adjusting strategies based on performance data in further improving ROI.
Challenges of Calculating and Communicating SEO ROI
- Time Lag: SEO takes time to develop, usually between 6-12 months, making this method directly relatable to efforts linked with revenue gains.
- Attribution Complexity: SEO is just one of the multi-channel funnels and even hard to attribute revenue, especially in SaaS with long sales cycles.
- Siloed Metrics: The fact that individual SEO strategies cannot be measured in isolation means that SEO is best when it is holistic.
- Complex Data: SEO involves a lot of complex data, sometimes hard to digest and communicate to stakeholders who may not have a technical background.
- Fluctuating Metrics: SEO performance can go up and down with algorithm changes and other external factors, which may further complicate consistent ROI reporting.
How Long Does It Take to See ROI from Your SEO Efforts?
This can be anywhere between 6 and 12 months in terms of an ROI. This time frame is drastic for the implementation of strategies, content creation, and building links to take effect with regard to the search engine rankings and traffic.
However, the timeline is going to vary depending on how competitive your industry is, how good your strategy is, and how much budget has been allocated toward SEO.
SEO vs. PPC: Which Is the Best Investment?
While choosing between SEO and PPC, business goals and time frames should be kept in mind. SEO is a long time investment that compounds its returns, so for a business looking toward sustainable growth, it’s very good. On the other hand, PPC does give quicker results but usually at a higher cost per acquisition.
For SaaS companies, that would mean finding a well-balanced approach to Capitalize on SEO for long-term growth and PPC in the short term.
Conclusion
An investment in SEO for your SaaS business can pay off manifold, but it definitely requires a great deal of patience, consistent effort, and clarity on how to measure the ROI effectively.
It could be tracking the right metrics, communicating to stakeholders the value SEO is adding, or even finding a proper balancing act between SEO and PPC—any of these elements that may help drive long-term growth in the marketing strategy.
FAQs
1. How can I track the ROI of my SEO efforts?
Use tools like Google Analytics to track revenue from organic search traffic and compare it against your SEO costs.
2. What is a good ROI for SEO in SaaS?
A good ROI for SEO in SaaS is generally considered to be above 500%, though this can vary depending on your specific circumstances.
3. How long should I wait before expecting to see results from SEO?
It typically takes 6 to 12 months to see significant results from SEO efforts.
