How to Measure the ROI of Your Website



Keeping the above tips in mind, let's walk through a quick calculation that helps you better measure your website's ROI.

Say, for example, that your website costs $6,000 to develop. With an estimation that it will last 3 years before a redesign is needed, that means your yearly cost of web development will be $2,000.

To justify this investment, it has to result in at least $2,000 (and preferably more) every year that it's live. If you know that your average customer brings in $1,000 in revenue, that means your website should be directly responsible for 2 new customers per year.

Now, it's time to estimate the impact your website is having in terms of generating customers. Based on the tips above, you may know that the website brings in 500 visits per month or 6,000 per year. If on average, 3% of these visitors become inquiries, your website will generate 180 new leads per year. And again, if 20% of these leads become customers, that means 36 new customers annually.

Once you know the average value of your customers, the rest of your website ROI calculation is easy. Simply multiply it by the above 36; if your average customer is worth $500, that means your website generates $18,000 in revenue each year. Contrast that with the $2,000 annual cost, and your annual website ROI is 900 percent. The formula:

(average customer value x annual customers generated) / annual website cost = website ROI.

Of course, to accomplish that goal, you need a website that builds specifically to attract visitors, generate inquiries, and convert customers.


Note: These rates do not reflect the rates with Your Designs Online.

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