Backlinks are crucial to getting your website to rank for specific keywords and driving organic traffic to your website. Countless studies prove this and Google even admitted backlinks are one of their top 3 ranking factors.
It seems most marketing professionals are clear on this point and understand the value of backlink building. However, the lack of a clear way to calculate ROI seems to be keeping people from investing time and resources in backlinks.
Calculating ROI on backlink-building efforts is not an incredibly logical thing to do since getting keywords to rank is not an exact science. Even so, if we make some assumptions and use an SEO analytics tool like Ahrefs there is a simple method to calculate ROI and estimate the cost to get a keyword to rank in the top 3.
To calculate the ROI for your future backlink building efforts you need to have a certain understanding of your business metrics. For SaaS businesses the key metrics to understand would be:
- Visit-to-Lead Conversion Rate
- Lead-to-Customer Conversion Rate
- The average MRR for your customers (=ARPA)
If you have a decent estimate of these metrics you can use this template we put together to calculate cost estimates and ROI.
Here’s an example of how we are looking at the ROI for a specific keyword we want to get one of our clients to rank for.
Keyword: “data sync”
Ahrefs gives us a keyword difficulty of 54 and a monthly search volume of 3700.
After plugging in the Ahrefs data and the specific conversion rates in our template we get the results:
In this example, we’re likely to need roughly 130 backlinks to get the keyword to rank in the top 3. This leads to a significant cost of around $13 000. However, since the keyword has a fairly high number of monthly searches, we’d be able to repay the investment within just 9 months.
Keep in mind that strong SEO is perpetual and the new business MRR coming in through the content you got to rank should keep coming in on a steady basis for next to no additional cost.
Some tips to keep in mind when outsourcing backlink building:
- Make sure to work with a reputable agency. Bad backlinks can actually be damaging for your domain.
- Scale backlink building slowly. Don’t build 50 backlinks to a content piece in a short period of time but spread them out over multiple weeks.
- Use the keywords you want to rank for as anchor text but don’t overdo it. Mix it up with other anchor text.
- Go for a mix of high DA (expensive or hard to get) and lower DA backlinks (easier to get)
- Metrics like DA and Traffic of the domain you get a backlink from are important but are secondary to relevancy. Try to get backlinks from websites within your niche.