What's the ROI of hiring an SEO company?

There is no return you can look up in advance. The return on SEO depends on your market, your starting point, what a customer is worth to you, and how long the work runs, so the useful answer is a way to calculate your own. The formula is simple: the profit from customers you can attribute to organic search, minus what you spent, divided by what you spent. The hard parts are deciding which customers to count, measuring over a long enough period, and recognizing when SEO is the wrong investment for you.

Published ROI figures

You will find ROI percentages published online. Some come from SEO firms measuring their own clients; one such report, for example, says it draws on “data from 80 e-commerce clients across 5 verticals” in its e-commerce SEO ROI report. Figures built that way describe the results of one firm’s clients, chosen and measured by that firm. They can show what is possible; they cannot tell you what your own investment will return.

Calculating your own

Start with the cost: the fees, plus any content, tools, or development time the work requires.

Then the return, which is where care matters. Count inquiries and sales that came from organic search, measured in your analytics and your own records, and value them at the profit they bring rather than the revenue. For a business with repeat customers, the value of a customer over the relationship is a fairer measure than a single sale.

Separate searches for your own business name from the rest. People who already know you and search your name may have found you anyway, so counting them inflates the return. Growth in inquiries from searches that do not include your name is the part the SEO work most plausibly earned.

Measure over the right period

Costs start immediately while returns build over time, so a calculation made in the first months measures spending more than results. Measure at the points the company named in its own estimate, and compare against the same period a year earlier, so seasonal swings are not mistaken for results. Content and site improvements can keep bringing visitors after the work that created them is paid for, so an engagement judged only month by month may look worse than it is.

When SEO is a poor investment

SEO is a weak fit when you need customers within weeks, when few people search for what you sell, when a new customer is worth very little relative to the cost of the work, or when you cannot sustain the work long enough to reach the company’s own expected milestones. In those cases, other channels may return more, and a company that tells you so is giving you sound advice.

Asking how the return will be measured

Ask the company how it will measure the return for you: which actions count as conversions, how branded searches are separated, which accounts the figures come from, and when it expects the return to be measurable. An answer that is specific about measurement is worth more than a promised percentage.