Key Takeaways
- There are two methods to calculate the value of SEO traffic: one based on cost per click metrics and the other focused on understanding the customer value to your business.
- To use a keyword value calculator tool:
- Generate keywords and their search volumes using tools like Mangools.
- Include long tail keywords for an accurate picture.
- Filter out unrelated terms.
- Estimate rankings conservatively, around #5 or #6.
- Consider conversion rate and close rate for leads and sales.
- Conversion rate is the percentage of traffic that becomes leads, typically ranging from 4-10% for high-intent keywords.
- Close rate is the percentage of leads that convert into sales, often around 30% for service-based businesses.
- Calculate the value based on revenue, gross profit, or net profit, with gross profit being a commonly advised choice.
This spreadsheets gives you two different ways to calculate the value of potential SEO traffic.
The first technique uses cost per click metrics to help us understand what advertisers will pay for that traffic.
The second calculation was built with small businesses in mind. It does require you to have an understand what a customer is worth to your business. Assuming you understand your numbers this method will provide a much accurate picture.
How to Use This Keyword Value Calculator Tool
Step One: Generate Keywords, Keyword Volumes and Cost Per Click.
Use a tool like Mangools to generate keyword volumes. In order to give you an accurate picture you need to include long tail keywords. Mangools makes this really easy. For example, let’s assume we’re doing this for a self storage SEO client. They own a facility in New Braunfels Tx.
The largest keyword Storage Near Me geolocated in New Braunfels is searched 670 times per month. Not bad, right? But here is what surprises most business owners.
According to Mangools there are 537 related keywords!
With Mangools you can select and export all of them. When you sum up the total is 5600 searches per month. You will have to filter out unrelated terms, for example you may not offer RV storage and so you may want to weed that keyword out but overall it will be highly related.
Mangools will also give you (although it’s not super accurate) an estimate for the cost per click. Enter that data in as well.
If you don’t want to pay for a tool like Mangools or Keywords Everywhere you can get this data from free if you sign up for a Google Adwords account.
Step Two: Estimate Your Ranking
This is without question the most difficult part. Even the most experienced SEO’s can’t tell you where any given keyword will end up ranking, let alone 537 of them.
If you put in #1 or even #2 across the board you will be greatly over estimating the volume of traffic your site is going to receive. I recommend putting in #5 or #6 to generate a somewhat conservative case. For your primary keyword you generally want to be chasing top 5 rankings.
You can play around with the rankings to see the difference in traffic and traffic value.
Step Three: Enter Your Conversion Rate
This is the % of traffic you convert into leads (not sales). We have a range of 4-10% that you can select from a dropdown. For a service business, this tends to be a pretty good range for high intent keywords.
For our self storage example, this might be “storage or storage near me or storage units”.
For lower intent keywords, for example “how much storage space do I need?” this will be much lower.
Step Four: Enter Close Rate
This is the percentage of leads you turn into sales. Our default is 30%, which tends to be a pretty good number for service based businesses.
Obviously if you know your close rate input that.
Step Five: Enter Value Per Client
Depending on what you’re trying to calculate you may choose to use revenue, gross profit or net profit. I would generally advise you calculate it based on gross profit.
That’s it!
You have now have two values you can use to determine the value of the keywords you’re trying to rank for.
Looking for help with an local SEO campaign? Contact us.
