How to Evaluate the ROI of Hiring an SEO Firm Using a Simple Formula

You can evaluate the ROI of hiring an SEO firm by projecting the revenue you'd earn from ranking well in your area, then comparing it to what the firm will charge you. The maths is simpler than most agencies make it sound, and it follows a five-step formula using data you can pull for free. This article walks through that formula so you can run the numbers for your own business before you sign anything.

What ROI actually means in the context of SEO

ROI stands for return on investment. For SEO, it's the revenue you earn from organic Google traffic, minus what you paid the firm, divided by what you paid them. Expressed as a percentage. Anything above zero means the firm has paid for itself. We use 100% as a sensible first-year target.

The five-step formula

The same formula sits behind our free SEO ROI calculator. You can let the calculator do the maths for you, or follow the steps below to work it out manually.

Step 1: Find your monthly search volume

Open Google Ads Keyword Planner (it's free and just needs a Google account) or another tool that tells you location-specific search volumes. Set your location to the counties or cities you serve. Type in your main service keywords, for example "roof repair", "kitchen extension", or "block paving". The tool returns the average monthly searches for each term and a list of related keywords with their volumes too.

Add up the monthly search volumes for every relevant term. That's the total number of people each month searching for what you do in your area.

Step 2: Apply a click-through rate

Search engines don't send every searcher to whoever ranks #1. Some click map results, some click ads, some refine their search. The first organic result typically gets around 30% of clicks. The top 3 results share about 70% of clicks.

For an honest projection of what's possible if the work is done properly, use 30% (assuming you'll get to rank #1 for most of your terms over time).

Search volume × 30% = monthly site visits.

Step 3: Apply your site conversion rate

Conversion rate is the percentage of visitors who actually contact you. For trade websites, somewhere between 3% and 5% is normal. Better-built sites with clear contact buttons, fast loading, and trust signals (reviews, photos, guarantees) sit at the top end.

Monthly visits × conversion rate = monthly leads.

Step 4: Apply your close rate

Close rate is the percentage of leads that turn into paying customers. You know this number better than anyone. Most trades businesses close between 30% and 50% of qualified enquiries.

Monthly leads × close rate = new customers per month.

Step 5: Multiply by average order value

Multiply your new customers by your average order value (the typical revenue from one job).

New customers per month × average order value = monthly revenue from SEO.

Working out the ROI percentage

Take your projected monthly revenue, subtract the monthly fee from the SEO firm, divide by the same fee, then multiply by 100. That's your monthly ROI as a percentage. For an annual figure, multiply both numbers by 12 first.

A worked example

Take a builder serving Cheshire and targeting house extensions and renovations:

• Combined monthly searches for relevant terms: 1,200

• Click-through rate at rank #1: 30% = 360 visits

• Site conversion rate: 4% = around 14 leads

• Close rate: 30% = around 4 jobs

• Average order value: £25,000

• Monthly revenue from SEO: around £100,000

• Example SEO fee: £2,500

• Monthly ROI: (£100,000 minus £2,500), divided by £2,500, times 100 = around 3,900%

That looks ridiculous on paper, and in a way it is. It's the absolute ceiling, assuming you rank #1 for every term, every visitor finds your site easy to use, and your close rate doesn't dip. The point isn't to predict reality precisely. It's to give you a sense of whether the ceiling justifies the spend.

How to make the projection more realistic

A few adjustments to make before taking the number to your accountant:

• Drop the click-through rate to 15-20% if you're targeting competitive terms (you won't be rank #1 for everything)

• Lower the conversion rate if your existing site is slow or basic

• Be honest about your close rate, not optimistic

• Subtract a fair chunk of the search volume for "how to" and job-seeker searches that won't convert

• Assume it takes four to six months before you start seeing meaningful traffic, so year one will be roughly half the steady-state figure

In our experience, halving the projection gives you a realistic first-year estimate. If the result is still comfortably above zero, the maths works.

How to evaluate the firm once you've started

Once you've signed and the work is underway, use the same formula in reverse. Each month, compare actual numbers to the projection:

• Site visits from organic search (free, from Google Search Console)

• Leads received (your CRM, phone log, or a tracked phone number)

• Jobs closed (your own records)

• Revenue billed (your accounts)

• Conversion rate (leads divided by visits, to see if the site is converting as expected)

A reputable SEO firm should send you these numbers monthly in a plain English report without you having to chase. The actuals should track upwards toward the projection over the first six to twelve months.

If the firm can't produce these numbers, or the actuals stay flat for six months with no proper explanation, that's the signal something isn't working.

Run the numbers for your own business

Our free SEO ROI calculator does all of this for you. Pick your industry, pick your counties, and we pull the search volumes directly from Google Ads. Adjust the click-through rate, conversion rate, and close rate to match your business. The result tells you, roughly, what a properly executed SEO campaign could earn for your business.