Calculating the ROI of Your New Website

April 30, 2018 in Digital Marketing

Many business owners will agree that they want the things they spend money on to yield a positive return on their investment. While that obviously includes the investments they make in things like inventory, it should also include the money entrepreneurs spend on their websites. Web development normally isn’t free, after all. So, it’s important to know that your investment in web design is paying off.

Of course, you can only tell what kind of ROI your web design is generating if you take the time to calculate your website’s actual return. In addition to telling you if your investment was worth it, calculating your ROI will let you know approximately how long it will take to recoup an additional investment if you have to redesign your website down the line.

Since marketing is often necessary to draw people to a company’s website, calculating your ROI can be a good way to learn if your marketing is as effective as you hoped it would be. Finally, you need to know what your web design’s ROI is because it’s the only way you’ll know if you need to invest more in web development so that it performs better.

ROI Calculation for Ecommerce Websites

Businesses develop websites for a wide variety of reasons. One company may want a site to increase brand awareness while another organization may simply want a website that attracts a lot of traffic. Because the goal of most ecommerce websites is to generate sales, the calculation to determine ROI for this type of website is pretty straightforward.

Here is the calculation for ROI for ecommerce websites:

ROI = (Income – Expenses) / Expenses

For your ROI to be accurate, it’s important for you to include all of your website’s costs in “expenses.” These fees include your web development costs as well as ongoing expenses such as hosting fees.

Calculating ROI for Non-Ecommerce Websites

Unfortunately, calculating your website’s ROI isn’t nearly as easy for non-ecommerce websites. That’s because your website may only be partially responsible for the sales your business accrues. Even for e-commerce sites that market across channels, calculating ROI accurately can be challenging because, again, these websites might not be 100 percent responsible for a consumer’s purchase.

To calculate your website’s ROI if you’re not in e-commerce or you are in e-commerce and you market through multiple channels, picking an attribution model can help. While there are many models to choose from, attribution theory basically requires you to give a certain amount of credit for each sale to every marketing channel or touch point in a manner that makes sense.

Doing this will enable you to calculate your ROI using the equation provided above. Instead of using the sum of your income, however, you’ll only use the portion of your total income that your website is responsible for generating.

Contact Going Clear Interactive

You can greatly increase the chances that your website will produce a positive ROI by choosing the right web development partner to design and maintain your website. And that’s what Going Clear Interactive is – the best web design partner you’ll find. Look over our web design packages and contact us to get started today.

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