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James
James

The ROI of a New Website

December 03, 2018

In the world of business, any investment you make should create some sort of positive return.

It’s a simple equation:

(Increase in Revenue – Cost) / Cost = Return on Investment

The decision to invest in a new website is no different.

Your website is an absolute asset to your business. It’s a tool that helps attract and sell to prospective customers. With the right strategy, it can also be a resource to help maintain and increase the value of your existing customers.

But how do you measure the ROI of a website? It’s actually much simpler than you’d imagine.

How Your Website Benefits Your Business

Increased Visitors – A properly designed and developed website should generate increased visitors. With improvements in Search Engine Optimization, as well as content strategy, you’ll be able to see an increase in the number of people viewing your website (i.e., more marketing reach). Our customers will often see a 5%-20% increase in visitors.

Better Conversions – Once a visitor is on your website, the goal is to get them to convert into a lead. Examples could be filling out a contact form, estimate form, requesting a resource, or purchasing a product. A website that looks and functions professionally has a HIGHER rate of conversions than a poorly designed site. For a website that gets 200 visitors a day, a 2% increase in conversion rate means 120 more leads a month!

Improved Brand Equity – Your brand’s reputation is a big deal. For many of our clients, their website serves as a “qualifying” tool as well. Meaning, if their sales team is trying to attract new business, their prospective customers might visit their website to qualify the legitimacy of the business. Despite great sales team efforts, a poorly designed website can lose you countless opportunities if it is unattractive to potential clients.

Improved Hiring Ability – If your company is trying to hire in a tight job market, your website can be one of the deciding factors for a potential employee. Your HR staff will greatly appreciate the ability to use your website as a hiring asset, instead of a liability.

Existing Customer Retention – Many of the websites that we build include some sort of resource library or blog. This is a great way to retain your existing customers, encouraging them to use your website (and your business) as a resource. Developing this type of digital strategy through the use of your website can help you retain existing customers.

Below is a screenshot from Google Analytics of a customer who recently completed a new website with us. The visitor count, engagement rate, and number of people who stayed on the site all improved notably year-over-year.

Increased Leads in ROI of Website
The Cost of a New Website

Referring to the ROI equation shown earlier, the “cost” of a new website plays an important role in your return on investment. The more money you spend on a website, the larger the increase in sales you need to have in order to make a positive return on your investment.

On the flip side, if you spend too little on a website, your new site will likely be lower quality and less effective. A poorly designed and developed website will lead to lower visitor counts, lower conversions, and can reflect poorly on your brand.

When we do new website proposals for our clients, we always line item the budget and scope, so it allows our clients to have control over their investment costs. Prices for a custom website can range, but you can make smart decisions about how you make that investment.

Calculating The ROI of a New Website

Now that you know the various ways that you can improve your sales with the investment in a new website, we can start to perform return on investment calculations.

(Increase in Revenue – Cost) / Cost = Return on Investment

Let’s do a practice example. Let’s say a company is currently getting 50 leads a year through their (old) website, and each lead is worth $10,000. They are going to be investing $14,000 in a new website.

Through increased visitors, higher conversions, and better branding, they are expecting more leads from their website.

If they get 10% more leads:

($50,000 – $14,000) / $14,000 = 257% ROI

If they get 20% more leads:

($100,000 – $14,000) / $14,000 = 614% ROI

If they get 30% more leads:

($150,000 – $14,000) / $14,000 = 971% ROI

Worth it? We think so!

The ROI calculation for your business will be heavily dependent on average sale price, lifetime value of an account, and volume of transactions. So be sure to do your own math to see how a website investment would impact your specific business.

James
James
Sales Director

James is our Sales Director on the Powderkeg team. He has over 15 years of experience in website management and administration. He has created multiple hobby websites, some of which he monetized through SEO and content building. He wrote the book, The Inbound Advantage, which provides fundamentals of a digital sales strategy.