Companies want to achieve ROI, but when it comes to SEO and UX, brands often look at the wrong metrics.
SEO has certainly proven to be a powerful marketing driver for many companies, and UX has recently started gaining the broad-based business respect it has long deserved. To maximize the value of SEO and UX for your business, it’s time to look at your ROI calculations.
The ROI of SEO and UX
Kissmetrics, an analytics software company, took an unconventional route to building a software business at the time, and that was largely through its blog. The blog featured a mountain of posts, infographics, and guides. By 2013, the number of monthly blog visitors increased from zero to more than 350,000, mainly from organic search.
That year, the blog wound up accounting for approximately 82% of the company’s site traffic and over 70% of leads. The more successful the blog was at SEO, the more successful it further became. By 2015, Kissmetrics wound up increasing its blog traffic to more than 793,000.
A real estate agency launched a new microsite that relied exclusively on SEO to drive traffic. The site was optimized for hyper-local neighborhood topics. The new site wound up with 3X the organic traffic of the main agency website. Plus, it doubled the leads of the agency within five months. That’s right, the real estate agency DOUBLED its leads WITHIN FIVE MONTHS, largely through SEO.
If you’re looking for a business case to invest in SEO, you’d be hard-pressed to find better examples. Clearly, organic search can drive not only site traffic, but real business results.
When talking ROI, though, it’s important to look at the big picture. A 20-person company was crushing it with its organic search traffic. It experienced increases across the board for a range of keywords. It achieved many page one rankings. New blog posts were beating the traffic numbers of old posts by 2X, 3X, and even 10X. Overall monthly organic search traffic had more than doubled year-over-year.
Even so, the president of the company kept talking about its “poor SEO performance.” Everyone was confused. When pressed, she revealed that what she was specifically referring to was the ranking of one keyword phrase that she had the habit of checking (which, by the way, was still on Google Page One).
Huh?!?
To measure the ROI of SEO, it’s important to look at the entire ecosystem of rankings and conversion results. It’s crucial to factor in the entire funnel. Generic keywords are great for attracting top-of-the-funnel visibility, while middle-of-funnel SEO is good for capturing prospects during the purchase journey; and nurture those you are already in touch with, and bottom-of-funnel optimization helps you increase your conversions.
The more that you can strengthen each layer of the funnel, the stronger your overall ROI will be.
With this in mind, set up tracking and reporting that looks at the broader range of topics and keywords. Analyze not only rankings data, but traffic and leads (or sales when relevant). Clarify mini-conversions along the journey; the reality is that many visitors may not be ready for your ultimate conversion event.
When calculating your return on SEO investment, the ultimate determination is going to be:
ROI = LTV – CAC
LTV stands for Lifetime Value, and CAC stands for Customer Acquisition Cost. It’s one thing to understand how much an initial purchase is worth, but if your customers tend to purchase from you for two or three years, then your ROI calculation should factor in the longer-term value to your business based on the average purchase price and lifetime expectancy. After all, you are not applying additional marketing costs to the incremental revenue, or if you are, it’s negligible compared to the initial acquisition investment.
SEO is no longer just about choosing keywords and implementing certain technical fixes to your site. Think more holistically. Remember to include content strategy, content development, content amplification, partnerships, outreach, and PR in your measurements. Although historically these have been on separate line items, your SEO efforts should be 100% integrated with your PR. All of this leads to more mentions, more shares, and more links, helping your organic rankings, traffic, and conversions.
Customize your ROI metrics based on the nature of your business and what you need your visitors to do. It’s not always about selling another widget.
For example, when I worked with one of the largest newspapers in North America, SEO was all about page views, page views, page views. Why? Because our client’s business model was based on advertising revenue, and increased page views meant more advertising dollars and greater leverage when negotiating future advertising deals. In that case, it was equally as important to measure the page views for the organic traffic coming to the site compared to other channels, as the actual traffic numbers themselves. For this publication, generating more page views was in and of itself a major priority, and so measuring the success of SEO without the inclusion of page view metrics made no sense in this particular case.
The ROI of UX
Even as early as 1966, IBM’s CEO at the time, T.J. Watson, Jr., wrote, “Good design is good business.” He went on to write, “Since design excellence concerns all areas of the business, you should make certain that all your people are aware of its importance.”
There are many real-life business examples that back up Watson’s claims. According to The Business Value of User Experience by UX architect Jim Ross, the number of unique visitors to the Walmart website increased by 200 percent after the company revamped its e-commerce experience; the retailer American Eagle Outfitters increased sales in the month after a website redesign by 53.6 percent; Bank of America undertook a user-centered redesign of its account registration process, and online-banking traffic consequently increased 45 percent; Microsoft changed the color of links in its Bing search engine to a bolder blue, and estimated $80 million in additional advertising revenue to come as a result.
Even when looking at UX from a stock performance perspective, having a UX focus appears to translate into better valuations. An analysis by the Design Management Institute concluded that design-driven businesses have outperformed the S&P by 228 percent over a recent 10-year period
In addition, two Product Design Directors at Facebook, Geoff Teehan and Jon Lax, had developed what they called the “UX Fund” by identifying target companies such as Apple, Nike, and Netflix that valued design, innovation, and positive customer experience and then investing $50,000 in such companies. After a year, the fund grew by 39.3 percent, beating all of the major stock indices, including a near 4X beatdown of the S&P 500. After ten years, the UX Fund returned 450.1 percent on the initial investment, whereas the NASDAQ returned merely 93.2 percent. (UX rules!)
Clearly, there’s a major financial payoff to more intuitive websites, beautiful branding, and better user experiences. It does indeed appear that good design is good business.
Improving your UX goes well beyond design changes. It also involves a greater degree of empathy in understanding your audience’s motivations, objectives, and challenges. Sephora, the cosmetics and beauty retailer, for example, observed that millennials shopping on its site would first go to YouTube for videos about the products. The brand then created its own library of videos to align with this user behavior.
In determining the business value of UX, it’s helpful to set up measurable A/B tests on your website. This will enable you to see first-hand what drives certain onsite user behavior. A/B testing is an effective means of doing this, as the testing is done concurrently. This is much better than sequential testing, which can be influenced by countless outside factors such as seasonality, holidays, weather, etc.
Remember that when measuring the value of UX, it’s not only conversions that you want to consider. For a checkout process, drop-off is a metric that should be examined for every step in the process. For blog design, the success metrics may lean more towards social sharing, mailing list opt-ins, or funneling site visitors from the blog to product/service pages. Or your business may benefit from UX improvements that reduce help desk or technical support calls. As with SEO, remember to view your UX benefits holistically.
For UX ROI calculations, you can rely on the same equation as previously provided:
ROI = LTV – CAC
Taking it a step further, you can also play around with this collection of UX ROI calculators by Human Factors International.
The Missing Link
In the majority of literature I’ve found online about the ROI of SEO and/or UX, there’s no mention of conversion optimization. Think about that…
If you were looking to get fit and lose weight, imagine if what you read covered only the exercises you should do. Imagine reading about the best workouts for ripped abs and toned legs. Or the best training for different body types. That’s all helpful. But if you’re skipping the vegetables every day, yet eating donuts for breakfast and cake for dessert, guess what. You’ll miss your fitness goals. Massively.
The way to ensure that your SEO traffic and UX are producing ever-increasing ROI is conversion optimization of your website. This means not only A/B testing as mentioned above, but also analysis of heat maps, clicks, scroll maps, and user sessions.
Without it, the ROI conversation is really half empty. If the same traffic and a similar overall experience can generate 50 percent more conversions through refinement of the funnel, messaging, offers, layout, and calls-to-action, then leaving it out of the conversation is equivalent to dedicating yourself to getting fit but eating donuts every day.
Remember, a search ranking by itself is not a return on investment. A clean, sleek, user-friendly interface by itself is not a return on investment. Translating those into leads, orders, customers, registrations, trials, downloads, and revenue is a better measure of true ROI for your brand.
It’s therefore critical for you to continually test and optimize your website for greater conversion rates, and this in turn can drastically improve your SEO and UX ROI. Imagine going from eating donuts to eating oatmeal, berries, and some lean protein while maintaining the same exact fitness routine – magically you lose weight, gain strength, and improve overall health. Sounds like better ROI, right?