SEO ROI calculation for SaaS: how to understand whether it is worth investing in SEO

We’ve already touched on some effectiveness of SaaS in our articles. Today we will talk about SaaS SEO ROI, its relevance, and calculation features. Is this important for digital business? How reliable will the project development forecasts make on their basis?

What is SEO, and why is it important?

An effective digital technical tool allows you to raise SaaS in ranking search engine results for given key parameters. By identifying search engine algorithms, SEO optimises the web SaaS, changes its structure and thus pushes the product to self-development, which is very important in the context of “software as a service”. In addition, SEO can be used as a powerful lever in promoting a SaaS product. In this case, we are talking about entering the sales funnel and getting effective targeted traffic at its initial stage, building direct and feedback links with the subscriber, using CRM marketing and increase conversions using the site’s usability of the service provided.

If SaaS SEO is so important and integral for most companies, what metrics should be used to evaluate search engine optimisation and promotion results?

How to Calculate SEO ROI for SaaS Companies

SaaS SEO ROI is included in the list of key metrics for SaaS SEO, such as traffic direction (per page or source), click and bounce rate, and key rating. In the general case, in the theory of investment analysis, the concept of “return on investment” is used, which shows the effectiveness of investing investment resources in the object of such investment and is directly related to the project’s payback as a whole.

As for a digital product, the SaaS SEO ROI should be calculated monthly, as its value forms the basis for predicting a short-term model for future profits from scaling your SEO. SaaS SEO ROI takes into account investments based on the specifics of SEO, which lies in the fact that this tool can be unprofitable and not generate income in the first months of its launch. Here, the ROI indicator will most objectively show the real situation, showing a zero result.

How to correctly calculate ROI for SaaS SEO? First, let’s take a closer look at our example.

Initially, it is necessary to evaluate the cost of user acquisition for a SaaS product using SEO (CAC) and determine its acceptable level.
Next, we calculate the lifetime value of a customer (LTV), which will actually reflect the overall effect of one user over the entire period of his interaction with SaaS (if you do not know LTV from SEO, use LTV at the company level).
We find SaaS SEO ROI as the result of dividing the absolute value of the total beneficial effect from the implementation of SaaS SEO by the total costs of its implementation. That is, we actually divide our LTV by CAC. The resulting value is expressed as a percentage.

Recall that the billing period should be comparable when calculating LTV and determining the expenses for attracting users using SEO tools.

Comparing LTV and CAC in the form of SaaS SEO ROI is useful precisely because it allows you to find, element by element, the source of growth in return on investment in SEO promotion and optimisation. So, you can increase the ROI in one of two ways.

First, increase customer lifetime value by increasing customer loyalty, diversifying marketing efforts into products with the highest LTV, and compiling a list of SaaS priority areas according to the portfolio principle of investing in marketing.
Secondly, reduce the cost of customer acquisition through SEO by improving the sales funnel, redistributing the marketing budget, using end-to-end analytics, and combining optimisation and promotion efforts.

When calculating SaaS SEO ROI, a company can face several major challenges. Based on the variety of marketing channels, SEO trends for SaaS and the scope of the product itself, it is simply impossible to correctly calculate SaaS SEO ROI without using a reliable CRM system. CRM will help in this process to carry out analytical tracking of micro-conversions from SEO activities. In addition, it can be difficult to calculate SEO ROI if the company is relatively new to the digital products and services market or is small in scale. In this case, the company simply did not have enough time to devote attention to optimisation or did not have the necessary resources. In the short term, it will be complicated to calculate SEO ROI accurately.

How long does it take to see a return on investment in SEO?

The short-term period indicated above is less than six months. That is, if you invested in SEO marketing less than six months ago, the effect of the activities you implemented will be so small that it will be impossible to feel it on a company scale. Therefore, the bet on scaling the business model will play only after this period has elapsed, which is associated with certain features and characteristics of the processes:

on the way to following the points of the marketing strategy, there may be obstacles that arise inside and outside the company;
creating and testing high-quality authored content takes time (on average, it takes about three months to see the impact of SEO after the publication of new content);
high-quality, relevant links bring leads with a certain time lag;
building topical authority at the page and domain levels is impossible without a story that takes time, and so on.