The return on investment (ROI) of a web site is the ratio of money gained or lost on your website verses the amount of money you have spent on the website project in whatever way you did.
Measuring the ROI of a Web site
The ROI of a web site can be measured in a number of ways and for a number of factors. A very abstract description of the factors involved in the ROI of a website are as follows.
- Investment on the website
The question to ask here is where it is that you are spending money. In case of a website, following factors could be counted as the money spent on
- Your search engine marketing initiatives including pay per click campaigns etc.
- search engine optimization efforts whether they be in-house or outsourced
- Direct marketing
- web site development costs
- Email Marketing
- Affiliate Programs
- or any other investment you have made to promote your website in one way or the other
- Return from your website
The outputs or outcomes of your investments on the website project could be as follows.
- Conversion
- Revenue generation
- leads
- Customer satisfaction
- Problem resolution rate etc.
Once you have calculated both the investment and outcomes of your website, you can calculate the ROI of your website by dividing the outcomes by the investment. Calculating the ROI seems to be a simple task. However, the hardest part in the equation is to help your customers identify the outcome they want to see by investing on your web properties. Once that part is determined, it will be an easy shot to calculate the costs involved on the project.
Improving ROI
There could be so many ways of improving the ROI of a website. However, the first and foremost important step in this regard is to gather data of the visitors who visit your website via any free or paid web analytics tool such as Google Analytics, brutally analyze what what the data says and then make recommendations on how to improve your website so that you can achieve your goals from it.
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