SEO Budget: SEO Budget is the amount of funds that you are already spending on search engine optimization or the amount you are thinking about spending. Using our ROI calculator you can quickly change the number and see the impact of what is needed to break even and how it impacts your customer acquisition cost. The SEO ROI calculator is designed as a simple tool that gives you the site owner powerful information to help you decide your SEO budget for this marketing channel.
Average Order: The average order is the amount of your average sale less shipping charged. Normally average order is considered statistically viable after 250 orders, but it varies depending on the business and the product line. It is simplest to use the pre-existing average order that you normally receive for an online order.
Average Margin: The average margin is a percentage determined by subtracting the cost of the product from the sale price of the item. The difference is then divided by the sale price to determine the gross profit margin. An example would be if an item sells for $50 and it cost $30. The formula for gross margin would be $50-30=$20, $20/$50=40%. Very simple to help you determine your gross margin for your SEO ROI calculation.
Number Of Orders To Break Even: This number is determined using the SEO ROI calculator. After filling out the first three fields you can click on the calculate button and the system will return the break even number of orders required. This is often a goal of a campaign depending on the value of a new customer. By changing any or all of the first three entries, you can view the changes in break even orders.
Actual Orders: This is the second part of the SEO ROI calculator’s function. After an SEO campaign has been running you determine the actual orders it generated. The actual orders generated can be extracted from your analytics program. By entering this number you can really see the actual value of the SEO budget.
New Customer Acquisition Cost: This figure is displayed after filling out the first three fields and the actual orders field. A new customer costs or is acquired at a gain by using a formula. The formula takes the total margin generated and then you subtract the amount of the SEO budget spent. That number is divided by the actual orders taken. We assume since the orders were generated from SEO that the customers who placed them are mostly new ones. We usually exclude branded searches in these calculations. An example would be if your SEO budget was $2,000 per month and the total profit margin generated was $1,800. You had a total of 200 orders. Your customer acquisition cost total was $200 and your new customers cost $1 each. We usually exclude branded searches in these calculations. If your total margin was $2,200 then you would have had a new customer acquisition gain of $1 each. That is every marketers dream and the typical result of a long term deep SEO campaign.