What’s My Website’s ROI?

How to Claculate ROI

Posted by Erich

February 7, 2022

Your website’s return on investment (ROI) is the measure used to evaluate the profitability of your website. When you know what your website’s ROI is, you know if it’s worth keeping your business’ website going, or whether you would be better off using older marketing methods to find clients. Let’s look at a few key points to understand your ROI.

1. What is the Cost of Your Website?

In other words, how much is it costing you? Many small business owners don’t know the answer to this question. What you need to do is add up the following:

  • Initial fee you spent to get the website up and running
  • Annual domain cost
  • Monthly hosting & maintenance fees
  • SEO (Search Engine Optimization) services
  • Marketing
  • …And any other miscellaneous fees associated with the website

When you add these all up, you now have your running costs.

2. What is Your Annual Visitor Count?

Google Analytics will usually hold this information. Your site may have seen thousands of visitors your first year or two in business, but that number may differ now. It’s a good practice to monitor your annual visitor rate as this will help you in calculating your ROI.

3. Did These Visitors Become Customers?

When you know how many visitors inquired about your product or service, then you can find out your website’s conversion rate. Your site may be getting thousands of hits, but the real number to look at is how many of those hits considered your product or service – it may have only been in the hundreds or less.

Finding out what your conversion rate is rather easy. Divide the number of the previous year’s visitors who made inquiries on your website by the number of visitors you had as a whole, and then multiply this number by 100 – this is your conversion rate percentage.

Most businesses report a 5-20% conversion rate – so if you’re reporting below this range, it might be time to think about making some changes to your business systems. Conversion rates do differ by industry as some may convert quicker than others.

Just a side note: Your conversion rate is not your close rate. Your close rate is the amount of people who actually become customers compared to the ones who just made inquiries about your product or services. Again, divide the actual customers by the total amount of inquiries and multiply by 100 – this is your close rate. This should be in the neighborhood of 20%-30%.

4. What is the Worth of Your Clients?

Divide the amount of money you generated from your website by the number of clients you obtained – this will tell you what the average worth of each customer, monetarily speaking. As your business moves forward, it is helpful to know this number as you will have a better understanding as to what to expect to make per year.

Calculating your ROI:

Now that we have all the numbers, we can figure out what the ROI is. Multiply the average worth of a client (from question 4) by the annual number of customers (not your visitors). Divide this number by the running costs that we totaled from question 1. This is your ROI %. If the answer is less than 100%, you are losing money. So you might be wondering, what can you do to get that number well north of 100%?

Take Action Now

Imagine each of these questions as a step on a ladder that ultimately leads up to your ROI. There could be a problem at any one of these steps in the ladder. You might be having difficulty trying to find where the problem or problems exist – but as website designers, we are well equipped at identifying the problem and fixing it for you.

We’re able to design your site in an effective way to streamline a higher ROI for you. Maybe your visitors need a clearer Call to Action, or making a simpler navigation process to the products or services your offer, or making your website found by using better search engine optimization techniques to attract more visitors. Whatever the case is, we will professionally design your website to make it work for you.

Contact us today to get started on your new website so that you are getting the best ROI!

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