How to Calculate the ROI on SEO [For Physiotherapists]
The most important question in every client’s mind when I’m talking to them about SEO is “Am I wasting my money?”
What they really want to know is whether SEO will generate additional patients for their practices and how long it will take.
This blog post shows you a simple way of calculating the expected traffic from securing a high ranking for a keyword, and based on historical performance metrics from other physiotherapy clients, calculate the value of new patient bookings to the business and in turn, the ROI of SEO.
How Return on Investment is Calculated
The formula for ROI is as follows:
((Qty of New Patients x Average Patient Value) – Cost)/Cost
- Qty of New Patients: The # of new patients that are generated as a result of the marketing activity
- Average Patient Value: The annual value of each new patient
- Cost: The cost of the marketing activity
Step 1 – Calculate the Average Patient Value
When dealing with a Physio practice I calculate the annual value of a customer by assuming an average transaction value of $100 and a repeat treatment rate of 5 times in a year.
So the average value of each new client to a Physio practice in year 1 is $500
Step 2 – Determine the Cost of the SEO Investment
I have campaigns that run for 4 months and others for 12 months.
For the purpose of this calculation I only use the total amount invested in SEO in one year.
Let’s use the amount of $6,000 which works out to be $1,500 per month for a four month campaign.
Step 3 – Calculate the # of New Patients Generated
Now this is where the more technical calculations come into play. The key concepts you want to keep in mind here are:
- We are analysing the rankings and monthly traffic for transactional keywords, i.e Keywords used by someone actually looking for a local physio or their additional services. Think “Physio + Suburb”
- We need to take into account the drop offs at each stage of the marketing funnel. That is, a position 1 ranking will only get approximately 30% of the search volume as clicks to the website, and not all clicks from Google to your site will result in a patient booking.
Example: “Physiotherapy Parramatta” – 590 Monthly Searches
I’ve chosen a suburb phrase instead of a city phrase as most physio patients will typically only look for a practitioner within or near their suburb of residence.
So, if you rank #1 for the keyword “Parramatta Physio” you can expect to see 177 clicks to your website.
Given the transactional nature of the search, i.e Someone looking for a physio, you can expect to have a high rate of patient bookings to traffic. In this case I’ve used an average of 25%. That is 1 in four people coming to your site will make an appointment.
I have clients who have a rate of 30% and others around 18% depending on location and service.
This means in the first month, 44 new patient bookings at an average transaction value of $100 = $4,425.
Based on my experience with Physiotherapists you can reasonably expect to generate repeat business of 5 visits per annum which means that ranking #1 for that keyword can potentially generate $22,125 in annual revenue.
Step #4 – Calculate the ROI of your SEO Investment
Calculating the ROI is now quite easy.
You can see that with an investment of $8,000 the annual ROI of a #1 ranking for that single keyword is 177%.
You might be thinking “well if you only rank in #3 then you are losing money.
But here’s the kicker. This SEO campaign ranks more than just one keyword.
SEO is designed to improve the visibility for all of your target services in the locations you serve meaning that each keyword ranking brings new inbound patients that you can turn into repeat customers with your in house systems as well as increase your ROI on your SEO investment.
So we are working to improve your rankings, traffic and sales for:
- Physio +location
- Remedial massage + location
- Pilates + location
- Sports massage +location
The more transactional keywords you get found for, the more traffic and bookings you make, increasing the ROI on your SEO investment.
Some General Considerations
#1 These are just projections
It’s important to recognise that the numbers that I’ve shown you above are just projections.
They may or may not happen. We may exceed those numbers or miss them completely.
The reality is that we do not control Google. All we can do is use our knowledge of what Google want’s and our experience on hundreds of campaigns to create the best possible site for Google to rank.
#2 You may in fact rank for more keywords
The analysis above focuses on a single keyword. Th reality is when you rank well for one of these seed keywords, you tend to rank for many different variations of the same search, potentially increasing your traffic flow.
#3 Assumptions are made
In order to simplify the analysis I’ve had to make some assumptions about the average patient value, the visit to booking rate and the longevity of your rankings. These assumptions come from my experience with former and current clients.
Your business might be different. Especially if you are not able to generate repeat business from those new inbound patients.
#4 Your systems need to be good to realise the lifetime value
Our estimate of lifetime value comes from working with a leading physio business coach. His goal is to help physios generate more repeat business from their existing database and so teaches them systems to generate repeat business.
The real opportunity here is using marketing strategies like SEO, Google ads and Facebook ads to generate new customers who you then bring into your existing systems to generate repeat business.
If you’re interested in finding what the numbers look like for your business why not contact us to have a chat.