Whenever a new inquiry comes through to your SEO agency, you need to assert the potential that lead has in terms of SEO growth.
It’s a resourceful and uncertain process.
There are many variables you have to keep in mind:
- The lead’s digital business landscape and potential.
- What that lead wants to achieve for their marketing efforts.
- Their available internal resources.
- The right price that supports your agency and satisfies the client.
As your team juggles with all the necessary inputs to gauge the viability of the lead’s SEO objective, you may also evaluate if it’s the right fit for your agency’s DNA. Or, as Edward Coram James, founder and CEO of Go Up, puts it:
“You can tell a lot about someone from their email requests. For instance, maybe it’s someone who inquires about pricing but refuses to set up a call.” — a situation that clearly determines the way the relationship will play out and the value of efficient communication… or lack of. Sometimes it’s obvious that you should just say No. For the other times, if it’s not a case of clashing values and visions, you need a straightforward qualifying process and a reliable benchmark to “keep you honest” as James adds.
And that’s where a realistic forecasting methodology becomes a competitive advantage.
Why use a forecasting methodology to evaluate your leads?
Once you’ve decided that it’s the type of business or project you want to work for, then it’s all about running the numbers.
“From a business point of view, considering the sustainability and reputation of our agency, it makes a lot of sense to choose clients where we feel we can do a really good job.”, says Go Up’s CEO.
That translates into evaluating two main things:
- The potential client’s SEO objective and how realistic it is.
- What an SEO campaign is going to look like for the lead in terms of budget and ROI.
Using a forecasting tool helps with both, as you create a pitching campaign, and analyze your targeted keywords and the variables that influence them. Considering search volumes and seasonality, year-over-year trends, SERP features, average CTR curves and the device mix, and so on, you see how traffic can look like for that lead if certain ranks are met.
You can even correlate the direct impact you can create for the client’s non-brand organic traffic and how that relates to business results — sessions, conversions, and even additional revenue for eCommerce leads.
“If we are able to get them into the top 10, top 5 for X, Y, and Z, and it actually results in a substantial increase in inquiries, then we have a first opportunity hint. Going through their analytics data, we also gauge their conversion rate.”, James explains. That’s how the initial forecasting exercise works to determine the possible increase in the number of inbound organic leads.
Here’s how James explains it, step by step:
Evaluating the viability of a lead
“This is purely exploring opportunity. I’ve based it on a 12-month trajectory in the forecasting tool.
So far so good right? There are only 17 keywords included (meaning that there is room for many more, which means bigger opportunity). From that, they are projecting 10,000 extra site visits. And, bearing in mind that their service is a high value one, they should easily be able to recoup their investment, were we to hit the above trajectory.
According to the analytics, their current conversion rate (conversion = email or call from prospective client) is 3%. Their website is not optimised at all, so we think we could double that conversion rate. To be safe, however, we will halve our expectation conversion improvement, so that we are instead pushing their conversion rate to 4.5%.
So, we would expect 450 additional inquiries for them per year.
Their secondary conversion rate (secondary conversion = inquiry becomes a client) is approximately 25%. So, of that 45 additional inquiries, they would expect to gain 112.5 new clients.
The profit that they generate per new client is £3000. So, they would expect to generate a gross profit of £337,500 in year one. Our suggested budget is £9000 per month (£108,000 for the year). Meaning that we would expect them to make:
Year one net profit: £229,500
Why’s this a tricky one? A lot of chips have to fall into place for this to work. They are a relatively new site with a DR 3. And their first page competition consists of sites with DR 40-75.
We would need to build authority for them, and quickly. Their site is also poorly put together. So, it would require a lot of content time, a technical overhaul, CRO, UX and PR. For them to get onto the first page for enough keywords to make it viable, all elements would need to fall into place, perfectly.
From the forecast, we can see there is a steep upwards curve from November 2021 onwards, with a lot of the prospective traffic occurring in the final Quarter of Y1.
A better breakdown can be seen here:
If the projections are off by 3-months, then we lose approx. 6600 of those 10,000 year 1 extra visitors. Year 1 would then see only 3400 extra visitors:
– 153 extra inquiries
– 38 extra clients
– £114,750 gross profit
– £6750 net profit
This is the problem when you have a site starting from scratch and entering a competitive search landscape. They often need a big budget, and for profit in year one, you don’t have a lot of room for miscalculation.
The opening 6-months will be a bit of a write off in terms of extra traffic, so you’re heavily reliant upon a sharp upwards curve in the final quarter of the year, and if that curve appears late, then the campaign will often run at a loss for that year.
In this case, we’ve decided that the risk is worth it. The client has said that they understand all of this and they’re experienced enough to be patient. So, we’ve said we want to pitch for it. However, if in our qualifying calls the client appeared to want results sooner, or to be impatient, then this is an account that we would be declining to pitch for.”
Sometimes you’ll get “unworkable” results or grey areas where you need to decide if the risk can pay off or not.
Building the business case with forecasting:
A way to align your team
As seen in the in-depth example above, doing a forecasting exercise at this stage not only helps you evaluate the potential of the lead’s growth possibilities, but is also an important step in the agency’s internal calibration.
For Go Up, this is a viability test which includes both the forecast and a deep dive into technical issues, SEO opportunities and other important bits of a preliminary audit done by the strategy team. If what the strategy team evaluates is in accordance with the forecast scenario and there is significant ROI to pitch to that client, the agency can make a solid proposal. With all internal views aligned.
To decide if a lead is worth pursuing and control the process, the strategy team is unaware of the findings of the initial forecast analysis, while focusing on:
- The lead’s website issues, domain authority etc.
- Keyword opportunities and the “market share” of that business in terms of Visibility.
- What key resources are needed for a successful SEO campaign: technical SEO, PR, UX, CRO etc.
- The budget versus the SEO possibilities.
In the end, spotting the right opportunity is a matter of answering the following questions:
- How much revenue is out there for the client to get?
- How long and how resource-intensive is it going to be to reach those targets?
- If all the resources are spent in the agreed amount of time, will the client be ROI positive?
If you can come back and say that for a 5000$ monthly budget, you can generate 2 million $ in a year, then the ROI is clear on both sides.
If, on the contrary, the lead’s SEO objective is unrealistic, and your internal exercise has proven it, you can help them become aware of that. Then, you can set a new target or, depending on the case, explain to them why SEO is not the right marketing approach for their business at the moment.
“When using forecasting, we take that whole setup as being 100%, then look at the slice of the pie that we think is realistic, which might be 30%. Then, being really conservative, we carve that to 15%. So we can measure the revenue that 15% will generate — it’s what we compare to the output and the required budget.”, Go Up’s CEO further pinpoints.
Doing both the forecasting exercise and the viability test becomes a way to assess the strength of a potential campaign while keeping all the involved members of the agency accountable. That’s why, as a process, it then generates the necessary confidence to communicate with a lead and highlight what works and what doesn’t.
A way to showcase the SEO opportunity
Gauging the SEO opportunity is, as we’ve seen, a strategic exercise in itself.
With a clear understanding of the lead’s search landscape, the specific search terms that you can optimize and their traffic, the comparison with their competitors, etc. and the forecast scenario in the back of your mind, you can articulate their growth potential.
For the sake of transparency and clear communication, you can present the data range you’re basing your strategy on and explain how that translates into the business opportunity you’ve uncovered.
“There was a financial services company launching a new platform who came to us and said that if we can get them 300 paid signups within year one, then this campaign will have been an absolute success.”, James recalls. To evaluate the viability of that objective and pinpoint the opportunity, the agency removed anything that looked highly transactional, short-tail keywords, and so on, and designed the internal forecasting exercise around long-tail keyword sets – based on thorough research from a similar business.
“We analyzed what’s left after removing everything that looked really juicy. Did we have an attractive value proposition after that? We took the combined search volume of all of those different long-tail keywords and realized we could provide ROI in the first 10 months of the campaign. We did the conversion rate estimate based on their sister website and then thought — if we’re increasing that conversion rate by 20% and hit the targets on 70% of these keywords on the first page, are we hitting that 300 signups mark? The answer was yes, so we went to the client and said: These are not KPIs, but we think that there is a business model to be had here.”
In the end, the financial services client increased even more than the initial objective, and it was their internal use of the forecasting methodology that made the growth potential clear from the start.
Still, for Go Up, this is also the moment when they clarify that they set KPIs after the first technical improvements are in place: “If you literally just change the title tags on a website, you’re going to get an indicator quite quickly as to how Google interprets that change and how much it moves the needle for the client.”, James says.
Setting this kind of expectations makes the agency confident to provide a forecast scenario in the 3rd or 4th month of the collaboration and set hard KPIs: “Once we have the initial changes done, we can say all of these keywords here can reach top 3, these top 5 etc. We go back to the forecasting and then set proper KPIs. We’ll often tie ourselves to those targets financially. We’ll ask the client to withhold 10% of the monthly management fee. And if, after 12 months, we don’t hit these KPIs, then we waive that 10%. But, if we do, then we send you a nice invoice for that 10%.”
PRO Tip: Whether you present the forecast scenario in the pitching stage or use it as an internal compass, don’t forget about the importance of reforecasting, either. Quarterly business reviews are a good moment to take the client’s pulse and present new SEO opportunities that you’ve spotted during the past months.
Here’s one last example of how Go Up creates new pitches for existing clients:
“This is another interesting example, for a current client of the agency. We have built their non-brand organic traffic from close to 0 to their current numbers in approx. 6 months and it is re-pitch time.
We are actually very confident in this one. Their site responds very well to our changes and we have already pushed them onto page one for a lot of terms, and pages 2-3 for many more. Focusing in on those on pages 2-3, if we run it through the forecasting tool, here’s how it looks:
Zoning in on that additional traffic, they are being projected 43,700. To be safe, we take 25% of this (so, even if we mess up a lot, there is a lot of cushioning): 10,750 extra hits.
Their conversion rate is 5%.
So, 537.5 extra inquiries.
They have a 32% secondary conversion rate, so 172 new clients.
Each new client is worth £1750 to them in terms of profit.
So, £301,000 gross profit.
Their campaign costs £4000 per month, or £48,000 per year.
That means a net profit of £253,000.
And this is taking a relatively worst case scenario.
We already know that the client is patient, so we know that we can work with them. That’s why we’ll go for it.
It’s worth pointing out that we only took 25% of their additional traffic as our number, whereas with the new potential client in the example before, we took 100% of their additional traffic as our number.
The difference here is that with the other client we used a different war game scenario. i.e. for the other client we explored the more likely worst case scenario which was that we are 3-months late in delivering their results. So, our worst case scenario for them was 33% of the additional traffic, unlike the 25% that we used in this scenario.
– We took 33% in that case study because, there, we were basing everything on only 17 keywords, in a search landscape that we know has many more than this.
– We took 25% in this case study, since it is a re-pitch for an existing client, we already know the exact size of their search landscape so know that the ‘additional traffic’ figure takes into account the whole search landscape.”
As James thoroughly explains in all the case studies shown above, the forecasting is a good benchmark for choosing the right clients or re-pitching to existing clients with confidence and proactivity.
In a nutshell
Qualifying clients for your SEO agency involves a lot of work and resources, while you balance all the factors you need to take into account for a successful collaboration.
If it’s a lead that gets you excited and is a good fit for your agency’s culture, it becomes a matter of evaluating the viability of their SEO objective and opportunities. Go Up’s use of SEOmonitor’s forecasting module is a straightforward way to internally assess if the client’s ROI is worth it, keeping all sides accountable.
After all, building a business case with forecasting helps you:
- Gauge the “market share” of the lead and its growth opportunities.
- Understand where you can make a difference and how that can correlate with business results.
- Evaluate the consistency of the ROI and be honest about the potential performance of a campaign.
With SEOmonitor’s methodology, you can do all that, while also showcasing the added business value your agency can create, modelling additional traffic, conversions, and a Google Ads’ equivalent cost — which can be an indicator of setting the right budget.