SaaS SEO: an Actionable Guide to Building a Growth-Driven Strategy
We've transformed SEO to be a top-performing customer acquisition channel for so many SaaS, and there's no stopping you from doing the same.
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Schedule a callTo effectively scale your SEO channel, you need to be able to measure its ROI every single month.
In this ROI guide we are going to dive into:
We will be looking at cost per product signup. If your business model uses leads, then substitute signups with leads. If your business has a hybrid model, then use a combination of the two: measure cost per conversion (lead+signup).
Ready? Letâs begin!
If you are yet to invest in SEO or have been investing in it for less than 6 months, then you cannot measure the ROI of your SEO channel.
You have decided to make a bet to scale a new customer acquisition channel and need to validate this bet after a 6-month period.
Why 6 months?
Because SEO takes time in the beginning to grow for multiple reasons. To be successful, you need to:
The danger when validating this bet, is that you donât put enough resources into it, and after the 6 months you cannot make a decision to scale or kill this channel. This is the worst thing that can possibly happen when growing your SaaS company.
Here are some tips to make sure you are able to validate your SEO channel effectively within 6 months:
If you invest an average amount of resources, youâre just going to simply get average results.
Effectively measure your SEO ROI today
Take hold of your SaaS marketing ROI with our free tracker
Download for freeIf youâve been working on your SEO channel for at least 6 months, youâre now able to start measuring your channelâs ROI to understand how you can calibrate your monthly SEO budget.
From our experience working with a range of SaaS brands, it takes three months on average to see SEO impact after publishing new content, acquiring links, etc. Neil Patel also found the same thing in a study that he conducted analysing 20,000 URLs (see image below). So we should consider a 3-month lag when measuring ROI.
Now we have aligned on the average lag to see SEO results, we now need to use two different calculations of ROI depending on if the SEO we are measuring is brand SEO or performance SEO.
Important: in your marketing budget you should already be differentiating between these two types of marketing (brand vs. performance). Sometimes performance is also called demand gen or growth. As a rule of thumb, on average companies invest 25% of their budget in brand and therefore 75% in performance marketing tactics.
Performance SEO in the context of SaaS is all about driving leads and product signups, so youâre creating marketing content with the purpose to convert. Here youâre tackling product, solution and problem aware audiences.
Here are the four steps you need to take in order to effectively calculate ROI:
First you need to understand how much you can pay maximum in order to acquire a customer.
In SaaS we are looking at maintaining a 3:1 LTV:CAC ratio, within a max 12-month payback period (including the usual SEO lag).
Why? Because we want to scale a healthy SaaS company:
This means that you pay 1/3 of your lifetime value to acquire a single customer where your CAC / ARPA is less than or equal to 9.
If you donât know the LTV of your SEO channel, then use your company-level LTV.
If your company doesnât know its LTV, then youâll need to align on a max cost per signup that I cover in the next section.
If you do have your LTV then you need to simply divide this by 3, and ensure that when dividing this final number by your ARPA, it doesnât exceed 9.
Worked example:
Having a 9-month payback period ensures that you are able to recuperate your SEO investment within 12 months including the 3-month SEO lag.
Second, you now need to work back from your max CAC to understand how much you can pay to acquire an SEO signup. Youâll need to understand how a cohort of signups from +12 months ago converted into MRR to be able to establish the average 12-month conversion rate.
A) If you donât know your max CAC or donât have conversion rate data for the past 12 months
You have two options:
B) If you do know your max CAC and have conversion rate data from the past 12 months
Take a cohort of product signup from > 12 months ago and measure how it converted into MRR over a 12 month period. Calculate your 12-month signup conversion rate and divide your max CAC by this %.
Worked example:
Now we know how much we can spend to acquire an SEO signup, then we need to start tracking all of our SEO related costs every month so that our ROI is fully loaded.
Costs to include:
If you have a full-time employee working part-time on this channel, then include the % of their salary. E.g. you have a developer who works on average 10 hours / week, then take 25% of their total salary into consideration.
Now we have all the data, this last step is to build our ROI tracking spreadsheet.
Click here to download our ready-made SaaS SEO ROI tracker.
Hereâs an overview of how this monthly tracker works:
Monitor your ROI every month to evaluate if you should increase or decrease your SEO investments. SEO is getting forever more competitive, so you should be investing as much so to maintain a 1x ROI month-on-month.
Thus, there shouldnât be any cause for celebration if you have an ROI higher than1, because it means you are missing out on additional SEO opportunities, for example by not building out more content or links. You are already hitting your payback and LTV:CAC ratio goals to scale a healthy SaaS business so donât stop your SEO investments increasing.
Itâs a âCAC gameâ, at the end of the day.
Brand SEO refers to content which you are creating in order to continually be in front of your ideal customer, as opposed to trying to convert them. This is usually problem aware or problem unaware content and this tactic is therefore classified as brand marketing.
Not a lot of brands are currently doing this, but moving forward this will become a more recognised SaaS marketing tactic to engage with your prospects before they have a need for your product.
You are also able to pixel this audience and effectively run retargeting campaigns to guide them through the next stages of your funnel and introduce them to your product and feel their pain.
So the goal here, like most other brand marketing plays, is reach which we evaluate using a cost per click (CPC) metric.
First, we need to establish an acceptable cost per click that we are prepared to pay in order to get in front of our ICP.
If you are currently running brand campaigns through display or paid social you can get a CPC benchmark from here. If not, then here are some Facebook CPCs by industry benchmarks that you can use
Second, the easiest way to get the number of clicks to your Brand SEO content, is to build a custom report in Google Analytics looking at landing pages from Organic which had 0 conversions. Use the New Users metric as a proxy for clicks.
Now build a monthly tracking spreadsheet where you:
Every brand should start to invest in Brand SEO in 2023 and beyond as part of their brand marketing mix. Are you?
Here are a few mistakes we suggest you avoid when measuring the ROI of your SEO channel:
Given all the different moving parts and assumptions which are involved in growing an SEO channel, the best approach is to measure the ROI of the channel as whole and not break it down.
So there you have it, our 2023 guide to measuring SEO ROI for SaaS. We hope you learned a lot and can start effectively measuring the ROI of your SEO channel.
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