How do I calculate ROI on a link building retainer?

The arithmetic is not difficult. What makes link building ROI awkward is that the return arrives two quarters after the cost, and part of what you bought expires.

The model

Five inputs, all of which you already have:

1. Target position traffic — estimated monthly organic visits at the position you are aiming for
2. Visit-to-trial rate — your actual organic conversion rate
3. Trial-to-paid rate — your actual rate
4. Customer lifetime value
5. Programme cost — monthly fee × months

Annual value = target traffic × 12 × visit-to-trial × trial-to-paid × LTV

A worked example. Your comparison page term would bring 900 monthly visits at position three. Organic converts to trial at 3%, trials convert at 20%, and LTV is $9,000.

• 900 × 12 = 10,800 annual visits
• × 3% = 324 trials
• × 20% = 65 customers
• × $9,000 = $585,000 annual value

Against a $7,000 a month programme costing $84,000 a year, that is comfortable — which is why these models tend to be presented by people selling link building.

The two corrections nobody applies

The lag. Ranking movement takes four to six months, and your sales cycle sits on top. That $585,000 does not start accruing in month one; realistically it begins in month seven and reaches full rate around month twelve. Year one captures perhaps 30–40% of the annual figure.

Decay. Ahrefs found 66.5% of links built between 2013 and 2024 are now dead. Applied to the model, roughly a third of the authority you bought will be gone within two years unless the contract includes monitoring and replacement. Either budget for maintenance or discount the out-years.

Corrected, the example looks like: year one about $200,000 against $84,000 cost, year two closer to the full figure minus decay. Still a good return — but payback lands around month ten, not month three.

What to report before there is revenue

For the first two quarters there is no revenue to attribute, so agree the interim measures up front or a working programme gets cancelled at the wrong review.

• Months 1–3: referring domains to each nominated target URL
• Months 4–6: ranking movement on the specific terms those pages target
• Months 7+: organic traffic to target pages, then trials, then revenue

Where the model breaks

If the page would not convert at position three, every number after the first is fiction. Fix the page before buying links.

If your LTV is under about $3,000, the maths gets tight quickly at $500–$1,250 a link. Product-led companies with low LTV often get better returns from product and lifecycle work than from links.

If you cannot reach the competitive floor, partial progress returns nothing. Position eight earns a fraction of position three. Check the referring domain count you actually need before committing — if the budget cannot reach it, pick a less contested term.

Run your own numbers with the cost calculator, which shows the programme cost alongside the in-house comparison.

Questions