Does Anyone Have a Formula for Revenue?

It has been several years since I first was taught a fantastic formula for revenue and ROI / ROIC in an organic sales environment. Over the past week I was reminded of exactly how relevant this entire equation is to our Indianapolis SEO services. So we thought we would take a blog post and go through one component, and that is revenue.

Line #1 – Revenue

TRAFFIC x CLOSE RATE x AVERAGE REVENUE PER TRANSACTION = REVENUE

Some quick definitions

Traffic – The number of potential customers that visit your location and/or website.

Close Rate – The number of potential customers (from traffic above) that make a purchase. (Measured in %)

Average Revenue per Transaction – Average dollars spent per transaction. (Measured in dollars)

Revenue – The total dollars generated. (Measured in dollars)

How important is traffic in the equation above? Traffic is the first step to maximizing the above equation. Zero traffic = zero revenue and your business needs customers/clients to provide your product and services to. Our Indianapolis search engine optimization is the solution. If you already have customers (most businesses do). Moving up in the search engines for high quality, relevant keywords will generate more customers looking for your exact product and services. This is the best way to pull customers to you, and boom your profits.

Take a look at all the numbers in the above and plug in your close rate and your average revenue per transaction. If those numbers stay the same what happens when you increase your traffic by 25%, or even 50%? Let’s see:

Monthly:

200 visits x 45% close rate x $98.00 per transaction = $8820.00 / month

25% monthly increase in traffic:

250 visits x 45% close rate x $98.00 per transaction = $11,025.00 / month

50% monthly increase in traffic:

300 visits x 45% close rate x $98.00 per transaction = $13,230.00 / month

With the Indianapolis SEO firm this is all possible. But wait, this is not just a onetime deal. As we know these keywords are searched monthly and the increase happens month over month putting your business viral! The Indianapolis SEO Firm does not stop there. Once we get you in a solid position on the 3 major search engines, we continue to work on your rankings. We also work with you on close rates and average revenue per sale. This will turn your business in to the machine you know it can be.