Every business owner wants to be number one, but how much is a first page Google ranking worth to your business?
Calculating the value of a number one ranking is a worthwhile exercise as it allows you to look at the return on investment (ROI) from any SEO campaign you might be considering.
Here are the steps to calculate the value of a number one ranking for your business.
Step 1 – Search Volume
The first step is to calculate the number of people searching for your target keyword.
The Google AdWords keyword tool is perfect for this. Just enter your search phrase, select the country and language targeting options and hit search. The tool will then display the number of global and local monthly searches for your specific keyword, as well as a whole bunch of other related terms.
For this example, I’ve chosen the key phrase flower delivery sydney which has 4,400 local searches per month.
Step 2 – Click Through Rate
The second step is to calculate how many times people click on the number 1 listing from those 4,400 monthly searches.
The latest data suggests that a number one ranking has a click through rate (CTR) of 36.4 percent. Using this figure we can calculate the number of visitors a website would receive in the number one spot for flower delivery sydney,
Visitors = # Searches x Click Through Rate
4,400 Searches * 36.4% CTR = 1601.6 Visitors per month.
Step 3 – Conversion Rate
The third step is to calculate how many of those 1601 visitors are likely to turn in to customers. To do this we need to use the websites conversion rate.
Many webmasters will be able to determine their conversion rate from their analytics, however if you’re unable to come up with a figure you can always use a benchmark of around 1-2%. Calculating the number of sales is as simple as using the following formula,
# Sales = # Visitors x Conversion Rate
1604 Visitors x 1.5% Conversion Rate = 24 Sales
Step 4 – Average Order Value
The final step to calculate the value of a number one ranking is to multiply the number of estimated sales by the average order value of each sale.
If we use an average order value of $100 for our flower delivery example, we can use the following formula to calculate the value of a number one ranking,
$ Sales Revenue = # Sales x Average Order Value
24 Sales x $100 Average order Value = $2,400 per month for a number one ranking for flower delivery sydney.
So there you have it. Simple Right?
I should add that there are a lot of variables at play here so while the figure is by no means exact, it should help to give you a rough guide to the value of a number one ranking.
If you have any questions or comments please let me know below.
P.S. Thanks to the post on espire marketing for the inspiration.