Blog/Ecommerce
19 June 2024
8 min read

What is the ROI of Shopify SEO?

Today, we'll show you exactly how to calculate the ROI of SEO for your eCommerce store.

In fact, this is the exact calculation we used when talking to over 3000 eCommerce merchants in the last three years.

So, if you want to ensure your SEO dollars are a valuable spend, you'll love this guide.

Let's get started.

Defining Shopify SEO ROI

This section explores defining Shopify SEO ROI, shedding light on its importance and how it can shape your business decisions. We'll explore what it means, how it's calculated, and how you can calculate the future ROI of SEO before you start the work.

What is Shopify SEO ROI?

Shopify SEO ROI, or return on investment, is a critical metric for any business website. It's the net gain you get from investing in search engine optimization strategies for your Shopify store. This gain is calculated after deducting the expenses incurred in implementing these strategies.

The beauty of Shopify SEO ROI is that it's not just a number. It reflects the effectiveness of your marketing investment and is expressed as a ratio or percentage, giving you a clear picture of your returns.

For instance, if your Shopify SEO ROI is 900%, it means that for every $10,000 you've invested in SEO, you've generated $100,000. That's a significant return, and it's what makes understanding Shopify SEO ROI so crucial for your business.

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Calculating Shopify SEO ROI

Understanding the ROI of your Shopify SEO efforts is crucial to gauge the effectiveness of your strategies. This process involves a blend of key metrics, a keen eye for detail, and a bit of patience.

Step-by-Step Guide to Calculate Shopify SEO ROI

Calculating the ROI in Shopify SEO isn't as challenging as it may seem. Here's a step-by-step guide to help you navigate through the process:

Calculate your actual SEO spend

To calculate your SEO spending, start by determining how much you are investing in SEO. Then, you can track the income generated from these investments. Your SEO investments should encompass in-house employees, SEO agencies and freelancers, SEO tools, as well as content distribution and link-building payments.

Identify the revenue from your organic traffic

The next step to determining your return on investment (ROI) from SEO is to set up conversion tracking in Google Analytics (GA4). This allows you to track all the conversions on your site that generate revenue.

The most effective way to track revenue from an ecommerce store is to set up ecommerce tracking events using Google’s guidelines. This process will help you capture ecommerce data and send it directly to GA4 for analysis.

Once you begin tracking ecommerce events, you can access an ecommerce report by selecting Conversions > Ecommerce > Overview). Here, you will find all the data related to your online sales, and you can then add a filter to display only organic traffic.

Calculate the return on investment

Now you know how much you've spent on SEO and how much it has generated, you can calculate the ROI with the following formula:

(Revenue from organic traffic — Cost of SEO) ÷ Cost of SEO x 100

For example:

If you've made $100,000 but spent $10,000, you would work out the calculation as follows:

($100,000 — $10,000) ÷ $10,000 x 100 = 900% ROI

In this fictitious example, this means that you have a 900% ROI for SEO spend.

How to Calculate Potential ROI from SEO

The above calculation works for historic SEO; however, if you would like to understand the potential upside from a specific content strategy, you can also work it as a projection for future ROI.

Whenever we work with a client, we always start by preparing a content plan to ensure its ROI makes sense to the client. As our content strategies are data-backed, it only takes a few easy calculations to determine whether or not it's viable for the company.

Calculate the potential traffic

First, we start with an initial seed list of keywords or a competitor analysis, and then we use Strategically AI to cluster the keywords into topics, pillars, and posts (for informational content) and collection and product pages (for commercial search terms).

Unless you've got a small site, it's likely you will need to create a content strategy by vertical or category on your website. For example, a whisky eCommerce store might start by clustering keywords related to a distillery like this:

In this one area, you might find 20 - 30 potential pages (a combination of blogs, products, and collection pages) with a total monthly search volume of 50K. This gives us the first metric for our calculation—potential traffic.

Estimate the average click-through rate

Next, we need to estimate how much of that potential traffic will actually land on your website. You can either use your actual average click-through rate or estimates based on average data for all searches:

  • Search Position 1 — 39.8%
  • Search Position 2 — 18.7%
  • Search Position 3 — 10.2%
  • Search Position 4 — 7.2%
  • Search Position 5 — 5.1%
  • Search Position 6 — 4.4%
  • Search Position 7 — 3.0%
  • Search Position 8 — 2.1%

For our example calculation, let's assume an average click-through rate of 7%.

Calculate website traffic

Using the potential monthly search volume of 50,000 and the estimated click-through rate of 7%, you can calculate how much traffic might land on your website using this formula:

(Total monthly search volume ÷ 100) x Estimated click-through = Monthly website traffic estimate

In our example, this would be:

(50,000 ÷ 100) x 7 = 3500 estimated monthly website traffic

Estimate the revenue

Finally, you can calculate the ROI using either your historic average order value and conversion rate, or you can make estimates for these metrics.

For example, if your website's average order value is $100 and its past conversion rate is 2%, you can use the following calculation to estimate the revenue:

(Website traffic ÷ 100) x Conversion rate = Estimated number of sales

Then, we can work out the estimated revenue by multiplying the estimated number of sales by the average order value, like this:

Estimated number of sales x Average order value = Estimated revenue

Let's take these numbers and work out how the calculation works in practice:

  • Average order value = $100
  • Conversion rate = 2%
  • Estimated average click-through rate = 7%
  • Monthly total traffic = 50,000

(3500 ÷ 100) x 2 = 70 potential sales

Then add in your average order value to work out the estimated revenue:

70 x $100 = $7000 per month estimated revenue

Calculate the ROI

Now, we've estimated $7,000 per month in revenue from our small 20 - 30 page SEO campaign. If we calculate the cost of the campaign, we can determine the ROI.

Let's assume the following costs to create the content for the content plan outlined above:

Finally, we can return to our original ROI calculation:

(Revenue from organic traffic — Cost of SEO) ÷ Cost of SEO x 100

and enter our estimated numbers:

($7000 — $1249) ÷ $1249 x 100 = 460%

However, the beauty of SEO is that investment will bring you a return each and every month while it's ranking—unlike paid ads.

So, let's assume a 6 month period and work out the projected ROI using the calculation above:

(Six months revenue from organic — Cost of SEO) ÷ Cost of SEO x 100

Using the same example numbers, the calculation would work as follows;

($42,000 — $1249) ÷ $1249 x 100 = 3262% ROI

And voila, a 3262% ROI based on a 20 - 30 page content plan.

What’s a Good ROI In Shopify SEO?

When it comes to Shopify SEO, the concept of a "good" ROI can be subjective and largely depends on several factors. Your budget, starting point, domain authority, and timeframe all play a significant role in determining the potential return on your SEO investment.

Unlike ROAS (return on ad spend), the benefits of SEO continue to compound long after you stop investing, making it a more sustainable and profitable investment in the long run. And, unlike paid ads, the cost is known upfront and does not increase based on market volatility and Zuckerberg's algorithm updates.

Improving Your Shopify SEO ROI

Let's explore strategies that can increase your ROI and common pitfalls to avoid. By the end of this section, you'll be equipped with the knowledge to make informed decisions that can positively impact your ROI.

Strategies to Increase Your Shopify SEO ROI

Here are some strategies to increase your Shopify SEO ROI:

✅ Focus on Site-Wide Factors: Start by optimizing your site-wide factors. This includes improving your site's speed, mobile-friendliness, and overall user experience. These factors can significantly impact your bounce rate and, ultimately, your ROI.

✅ Improving your Shopify SEO ROI is not just about getting more traffic; it is also about getting more qualified traffic that is likely to convert.

✅ Create Missing Collections: Collections can help your business by improving the organization of your product page and making it easier for customers to find what they're looking for. They are also excellent for SEO.

Conduct keyword research to find the clusters of keywords that can be targeted by granular collections and create pages that tightly align with your customers. If, for example, you run a shoe eCommerce store, depending on the available search, you might consider breaking down your collection pages as follows:

  • Trainers > domain.com/trainers/
  • Black trainers > domain.com/trainers/black
  • Black trainers for women > domain.com/trainers/black/women
  • Black winter trainers for women > domain.com/trainers/black/women/winter

This means that a customer who is searching to buy black winter trainers for women will find a collection page showcasing all of your relevant products which align perfectly with the customer's needs.

If you need help, use Strategically to cluster your keywords into relevant pages and create SEO-optimized content in just a few clicks.

Common Mistakes to Avoid When Trying to Improve Shopify SEO ROI

❌ Ignoring Bounce Rate: A high bounce rate can indicate that visitors aren't finding what they're looking for on your site. This can negatively impact your ROI.

❌ Neglecting Product Pages: Many businesses focus solely on their homepage SEO, forgetting that product pages can also drive qualified traffic.

❌ Chasing Less Traffic: It's not just about getting more traffic, but about attracting the right kind of traffic. Focusing on quantity over quality can lead to fewer conversions and lower ROI.

❌ Overlooking Metrics: Metrics like website traffic can provide valuable insights into your SEO performance. Ignoring these can lead to missed opportunities to improve your ROI.

Further Shopify reading:

Wrapping Up: Maximizing Your Shopify SEO ROI

Understanding and maximizing your Shopify SEO ROI is a crucial aspect of your business's digital marketing strategy. By leveraging key metrics like website traffic, conversion rate, and organic search channel, you can effectively calculate your return on investment and make informed decisions about your marketing investment.

Remember, it's not just about driving more traffic, but about attracting qualified traffic that converts. By addressing technical issues, optimizing your website, and showing expertise in your field, you can increase both conversions and traffic, thereby boosting your ROI.

If you need help determining the best collection pages for SEO or creating SEO-optimized content aligned with lucrative search terms relevant to your business, try Strategically AI for free.

Grow sessions and drive revenue for your eCommerce brand

Get a demo and discover how eCommerce brands use Strategically AI to drive sessions, grow revenue, and reduce reliance on paid ads.

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