Let’s hop right into a quick valuation and evaluation technique to understand how much value local SEO strategy brings to a local business, as opposed to only evaluating the cost of investing to get there. I can say with confidence that I have met some very big media buyers in my years and often they had not taken a moment to really consider the value of a Local Strategy but instead have spent just enough on it simply because they felt they “Had To”.
What is Click Through Truly Worth?
There are many different ways to calculate this evaluation, but for this post I am going to try and show you a quick and easy way to determine the answer. You can use more elaborate methods and create even more precise modeling.
First let’s figure out the AdWords Cost Per Click. This tool tells us what people are willing to pay directly for a click. Let’s use Family Moving and Storage as an example. Here we search for the base keyword, “Moving Companies” and force it based on the city. We get an average click cost of $24.
That information allows us to extrapolate that value a little bit more. Showing up in the top ad space can cost $24 per click. That means each click I get in the top organic section saves me $24.
Notice that our phone number happens to be on the front page as well, so really we are not just measuring clicks, we are getting calls. Calls are definitely worth more than a click to any smart business owner. The way I see it, every phone call is easily worth 3 or 4 clicks. Here is my rationale: Let’s say I am able to generate one lead from every four clicks on AdWords. My cost per lead would equal $100 dollars. So a phone call is worth $100 dollars in this example. Now that we know that, we can jump into a few more stats to help us understand the value.
Google Search Console
I love looking at the Google Search Console (GSC) or other credible analytical data for evaluation. So let’s pull that up now and take a look. When I filter the queries to contain Chandler because I want to know how many searches (volume) am I getting. My current position and clicks are not important to me yet, because those are things I can work on via SEO strategies. I am using GSC just to figure out the size of a market’s potential.
This GSC view tells me that every day there are at least a hundred searches for Chandler related moving searches. This data is very important in evaluating how big a market is and can be. Obviously, New York City will have a lot more searches than Kearny, Nebraska and with it probably a little different expectation related to cost and performance. So a little over 3K searches a month in Chandler gives me a target. If I can achieve a 3% click through rate, that would equal 90 clicks per month. Knowing that a moving click is worth in the ballpark of 24 dollars, I would be grabbing nearly $2160 worth of advertising a month out of this position.
Now I am starting to understand the value of being in that ad space versus not being there at all. If I spent more than that per month, I should have diverted the money into AdWords and just purchased clicks instead, as it would be valued at a discount in comparison. But if I can achieve this for less, I have a massive economic advantage over the competition trying to run their business on AdWords.
Let’s look at our Current Value.
For this I like to go to the Google My Business Platform and look at Insights.
The key numbers to look at for this example are the clicks to the website, and the clicks for calls. Now one quick side note is that real calls are actually much higher than displayed. The phone calls only registers when a mobile phone clicks to call, not when someone dials it directly. So the good news is that they are actually greatly understated.
Looking at these stats and using our data we learned above, the last 30 days have generated 19 phone calls = 19 * $100 value which equals $1,900 worth of value for phone calls, and an additional 41 clicks again using 41 * $24 = $984. So we can say that this organic location has generated roughly $2,884 in equivalent advertising by being where it is.
You do not have to agree with me but you have to admit…
Now I know some of you will say that my logic is crazy and you already get this without spending any money, and you may be correct. The purpose of the exercise is to show what the potential market is and the value of being there. The hardest part is ensuring you continue to get that value as changes happen and when competitors do more to get in the same spot. A very different way of evaluation is how Lead Generator Companies make their money. They sell these same leads. So I would argue that this business owner could simply sell these leads for up to $2,884 instead of taking them for their own business. He could certainly generate around that much in fees for the leads.
What are you thoughts? SEOptiks would love to discuss SEO strategy with you.