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We share our thoughts and ideas on how to grow a business.
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Okay, so let me share my screen.
I created a mock spreadsheet.
These are all hypothetical numbers,
not real client numbers.
And we can share some leads per month
curves for real clients as well as a backup.
And we can share some posts
that already have that.
But this illustrates it
visually for everyone.
And this is good to just how you should
be thinking about SEO ROI. So first I'm
going to say, let's look at each column
and I'll explain this even if you're not a
math person. So we just have
months, hypothetical, two years.
And we're using our rate,
so 10,000 a month.
So I have a negative sign in front of
each of these to say like you're spending 10,
000 a month. So that's going
to be the amount we spent.
And then column C don't
worry about right now.
That's just like the
amount spent to date.
So in month two you've spent
20,000 , three 30,000, et cetera.
Pretty simple to understand.
The key now thing here
that I sort of made up,
but that follows the curve
trajectory of everything else,
of what our clients
normally do, is leads.
So before we look at the graph, just
the numbers, I just said like month one,
zero leads. Month two, zero leads.
And then I said month three and
four, maybe you get one lead each.
Then three, then five, then four
goes down, jumped up to seven, eight.
So if we look at the curve,
this is what it looks like.
This slow, gentle ramp.
Months one through five,
barely any leads.
Then it kind of bounces around.
And then after month 10, it
starts going up kind of steadily.
After month 15, it really starts
picking up with some big ups and downs.
This is, would you agree, this is a
pretty honest representation of what lead
graphs look like for us?
So our goal when you think
about ROI is compare these.
How much money am I getting back
for each month where I'm spending 10K?
Because that's what we're saying
people are misunderstanding.
Well, I spent 40K by month
four, how many leads do I get?
So we just look at this logically before
we look at any of the other math I did or
any of the other columns.
In my hypothetical, by month
four, you spent 40K, 10K a month.
And in my hypothetical, first two months
you got zero, months three and four,
you got one each. So you got two leads.
So you're like, if you did the same logic,
you're like, well, what the hell guys?
I'm spending $40,000
and getting two leads.
That's $20,000 a lead.
You're like, yeah, but
that's not the point.
So the analogy I've given you before is
it's like you hire a trainer or you hire a
dietitian and they train you one session
at the gym and then you go home and you
sit on the scale and you're like,
well, I didn't lose any weight yet.
You're like, yeah, well that's,
but I spent a hundred dollars on you.
It's like, well that hundred
dollars is going to pay off later.
So to figure out that payoff, I just,
to keep all the numbers very round,
I just said a thousand
dollars a lead, right?
Just to make it easy
numbers to understand.
So then we just multiply
that times the lead.
So in month three and four,
when we generate one lead each,
that's a thousand dollars back.
So still it looks really bad there.
I spent $10,000 and I made a
thousand dollars from one lead.
That's 9K loss.
Okay, that's fine.
So if we take this curve, multiply
it by a thousand dollars,
we can just see right here,
where do those curves overlap?
Well, when do you make 10K back?
You make it somewhere between month
10 and 11 in my total hypothetical.
Okay, so we can think about that as ROI,
as you just subtract the two numbers and
that's represented here in this
graph where you're under zero.
So you're negative all the way
through month one through nine.
You're losing money, losing
money, losing money.
Why?
Because the graph below
it, you're spending 10K,
spending 10K and barely getting leads.
You're losing money, losing
money, losing money.
And then at month 10 in my hypothetical,
but that's typical of our client
engagements, for example,
and there's a big spread.
The value of a lead, totally different
from like a $99 a month self-serve SaaS and
some $200,000 enterprise contract, right?
Totally different, but just
the principles are the same,
even if the numbers adjust.
Then you cross break even.
Then the second tier of argument we've
heard happens where clients then say,
hold up. Yes, month 10, we got 13 leads,
average value 1000, 13,000 average value,
we gave you 10.
So this month we made
$3,000, 13,000 minus 10.
This month we did, but
then the clients ask us,
but we've been spending 10K
a month with you for 10 months.
It's going to take forever
to make that up.
The answer is no, it's not.
It's actually not going
to take forever at all.
And this is where SEO as a
channel really starts shining.
Why?
Because inevitably these lead graphs
have this long ramp as you're waiting for
things to rank. And once it starts ranking,
you start ranking each post that ranks
sits at its spot.
So if one post generates two leads
a month, three leads a month,
when it's in the top three for its keyword,
as you move on and start working on
post 50, that post number one still
sits there and generates its leads.
So every post you add to page one of its
target keywords is adding to the leads per
month. So you start accumulating these,
like it starts climbing really nicely,
like linearly.
And as it climbs, you just look
at the area under the curve,
you start making not 3K, because you're
making 13, then 16, then 20, then 24K.
So your profit each month is
growing from 3K, 6K, 10K, 14.
So the area under the curve, you
make up a few months after that.
Once you've made up all
that spend you've done,
you're just making money
and usually a lot of it.
Because the initial outlay, the initial
amount, like we happen to charge 10K,
but whatever it is for you, you could
be multiplying by employee salary and time.
Oh, Joey spends, you know, 45% of his
time on this, we take 45% of his salary,
whatever it is, the calculation.
That initial outlay starts to seem small
after you really start getting ROI or
results.
And that I've represented in a more complex
graph that I'm not gonna get into here.
If you have questions, you can email me.
But like that happens to be
in our calculation month 14,
where I'm comparing the net spend to
date to the net value generated per day.
And at month 14, that crosses,
that's when you make up that area.
So you see all of these months where we
spent one through 10 is a negative number,
by month 14, the area under has made
up for all that spend and then you're just
making money after that, month 15 on.
And that's different from
paid ads, because in paid ads,
you can't get more leads per
month without spending more.
And that's SEOs like value as a channel,
is you just keep paying the SEO agency or
your employees or whatever your
contractors the same amount per month.
But the articles they got in the
first few months to rank on page one,
still rank on page one for free,
and they keep generating leads.
So you're just stacking
articles on page one.
So you're stacking leads
per month, leads per month.
So your leads per month number is growing
while your spend on the agency stays
fixed. And that's how we can pull
this off, is the spend just stays fixed.
This blue line down here is
just 10K a month every time,
but the value generated grows.
And that's kind of like
the unfair advantage.
That's the leverage to use like
finance speak of SEO as a channel.
Yeah, and I think it makes sense to start
investing in this when you don't have an
immediate need for customers.
So you have a longer term mindset,
you can invest over time,
but say you already have another
channel that's working.
Maybe it is paid. And paid's consistently
driving leads for the business,
keeping your salespeople
busy or driving trials.
And then now you wanna build
for the long term and say, well,
I don't wanna keep investing
more and more money in paid spend.
I wanna start owning some
of the organic search queries.
And then over time, hopefully take
my reliance off of paid or whatever other
channel it is. And that's a perfect time
to start investing because you don't need
this now, but you can start thinking about
how I can invest for my business for the
long term and generate
another full lead channel.
And I think that's the challenge I think
that a lot of people don't realize that
we're doing is we're essentially building
an entirely new channel for them if they
haven't invested in this so far.
And investing and building an entire
new marketing channel takes time,
regardless of what it is.
Even if it's outbound sales, you
need to hire your first salesperson.
That person needs to test
a pitch, the messaging,
figure out how to prospect into accounts.
It's not like you get immediate ROI
or they're fully efficient in month one.
Maybe they close one deal, maybe month
two they start closing two or three,
but that person's not hitting
quota the second they start.
And I think it's the same
thing for any channel.
There's always a ramp.
And yeah, SEO might be a little bit longer
than some of these other channels like
paid search, like outbound sales and
other kinds of stuff, but same principles.
Yeah, the equivalent of what
we started this video on,
the issue would be in your outbound sales,
it's like in week two or their first
paycheck, you're like, hey, your first
paycheck just hit your account for whatever
thousands of dollars,
where's my customers?
And you're like, dude, I was doing
orientation for the first week.
A lot of businesses
think like that though.
It's this very short-sighted
like need results now,
not willing to invest
in the longterm or like.
maybe that person gets fired
after the first month.
I know some people that have that, if
they don't make a sale or two in their first
two months, they're automatically fired.
You're like, but what happens if they
end up being really good salespeople and
maybe you didn't really have the
right pitch down to do outbound sales,
the right way to open up, you didn't
know your value props and all that kind of
stuff and that stuff needs to be figured
out and there needs to be a feedback loop
and you need to learn from the mistakes
and then you continue to get better over
time. But where this analogy differs,
like from there is a couple of things.
Number one, maybe you can make an argument
that you can tell whether a salesperson
is good in the first two weeks.
But where that's not analogous
to SEO is an SEO,
it's not that you're a bad SEO if you
don't have a bunch of stuff ranking the first
two weeks, you just need time to rank.
Everyone needs time to rank.
For sure. Right?
And so that's like, you just,
that's not two weeks is not enough,
four months is not enough,
you need time to rank.
Number two, the big difference between
outbound sales is even if that salesperson
ends up good in your story, eventually
there's just a limit to how much that human
being can do because like they
have so much time in the day,
they're like sending these
emails and making these calls.
That's this, what I was just saying in
the video is SEO has this leverage where
you're just stacking these results because
once you get it ranking, it's there.
Unless you did some stupid hacky
thing or whatever and got penalized,
it's ranking for a long time.
And that's just unlike
paid, it's not true.
You can't get, if you get 40 leads a
month on 10,000 spend or whatever on paid,
you're not gonna get
120 in a few years on 10,
000 spend unless you just spent that
10,000 in a stupid way or whatever.
You just have to spend more
money to get more leads.
And that's the hack.
And then that's the benefit, but that
benefits only realized if you stick with SEO
for a long time. So what we do in our
conversations with clients at the sales
thing, what you were saying
earlier is we say, look,
our contract contractually is month
to month and we're proud of that because
clients who are with us at month 36
are not there because we locked them into
anything.
Like we're not Verizon.
It's there, they're there because
it's an ROI generating,
revenue generating channel
and they don't want to stop.
Right? And we're really proud of that.
But verbally, we only work
with people who are like,
do you understand this is long-term?
Like you should probably be mentally
ready to stick with this for a year.
Otherwise it doesn't make sense.
Minimum, minimum six months,
like we can do a check-in.
And so that's what we check in with.
So of course, when there's like regime
change in the client and all that stuff
happens, that's fine.
I would also say another big difference
between the outbound sales example,
specifically like hiring a new employee
in house is that we already have a set
process. So where if you
hire an employee in house,
that person has to learn your business.
Maybe they're even learning how to do
content marketing or SEO and it might take
six months for them to
just start producing stuff.
I remember when I worked at a startup,
I had to basically learn how to do content
marketing from the ground up.
And so that first six months of my
job at the company was spent learning the
business, learning the right positioning
of the business, trying to hire writers,
I really just trying to
figure out the basics.
And when you hire an agency,
we already have a set process.
We learn about your business in month
one, we start producing content in month one.
So the time to get results, I actually
feel like we can beat almost any other
option in terms of getting those rankings
quickly and getting the leads coming back
quickly.
Because yeah, the in-house
person, unless they're really,
really experienced and already have a
set process and already have writers and all
that kind of stuff, it just
takes time to get set up.
There's no way because we have strategists,
we have multiple writers,
we're like that person doesn't need to
publish, we have people in there for that,
that person doesn't need
to worry about the paid ads,
we have someone separate for that.
We have a whole process that just comes
in with multiple humans that are doing the
work. And so a single
person is gonna be hard.
And I think in general, if you are more
intentional at the beginning of just doing
some back of the envelope
like this and saying,
what are we expecting out of this
channel and what's reasonable?
And then being like, how long
do we need to stick with it?
Then that intentional, strategic,
careful way of doing
marketing and investing in marketing
channels, that I think a lot of companies
would benefit from that.
And that goes hand in hand with
this other video that we just did,
or that's gonna be out at the
same time of shiny object syndrome.
That's one aspect of
the solution to that,
is not just bouncing around because
you're like, this is what we're doing,
these are the ROI I can expect, and
so I'm gonna stick with it for a while.