How much is your website worth? 6 Ways to tell.
Truth is, most organizations know how much they’ve invested in their websites without knowing what their websites are worth to them. Not knowing this raises all sorts of interesting problems:
- How do you know how much budget to allocate to keeping it up to date?
- How do you know when it’s time to revamp or redesign the site?
- What kind of return are you getting for investing in your website?
Cost vs. worth.
Most people may have an idea of what their website has cost them – how much time and money they’ve put into it. That isn’t the same as worth. Let’s say you hire a delivery truck; the truck may have cost you $30,000, but it’s worth a lot more to you when it is out of commission – you lose business each day it is not earning money. Spending $40,000 on a bigger truck may allow you to increase your sales, and recoup the extra $10,000 in no time.
You should approach your website the same way. It doesn’t make sense to invest money into your web presence if you are not getting a good return-on-investment.
How can we assign value to a website to simplify investment decisions?
1. DEFINE SUCCESS FOR YOUR ORGANIZATION
Success means different things to different organizations and owners. Increased sales, increased market awareness, larger audience reach, more people helped, etc. This should be automatic for your organization, but it’s really crucial to define it to one, possibly two key metrics.
2. DEFINE METRICS TO MEASURE SUCCESS
Based on your organization’s goals, how will you know if you are achieving them? Perhaps it is increased revenues or profits or results of polling regarding your brand. The point is there is some measurable metric that you can use to know you are being successful.
3. DETERMINE HOW YOUR WEBSITE CONTRIBUTES
This is the step that most organizations can get side-tracked. It’s tempting to say my website helps with sales, market awareness, brand equity, reach, etc. Your website’s contribution needs to align with the primary business goal of your organization. The best website’s are laser-focused on their goals. A website that tries to do everything generally does nothing well.
If you are an e-commerce site, your website’s contributions are pretty easy to measure: sales. If sales are done off-line or you are a service company, your website should help you in attracting leads. If you are trying to build market awareness or audience, writing content that can be shared via social media can be one way your website can contribute.
4. DEFINE A SUCCESSFUL INTERACTION
When somebody visits your website, how can you tell if you have succeeded in interacting with them. Did they make a purchase, submit their contact information, share an article, visit more than 3 pages, watch a video, etc. There may be multiple successful interactions depending on your organization’s goals. The crucial point is that these interactions can be recognized and measured. Typically we call these interaction conversions.
5. DEFINE WHAT EACH INTERACTION IS WORTH
This part can be tricky – what is that conversion worth to you? If it’s a purchase, it’s pretty easy to define the value based on how much they spent. For somewhat ‘softer’ goals like market awareness, it can take some trial and error to land on correct numbers. Don’t fret too much about this, however, it’s better to guess and refine than to try and arrive on a perfect solution the first time.
6. CALCULATE THE VALUE OF YOUR WEBSITE
When you start measuring your conversions and assigning values to them, it becomes easy to see how your website is performing and what kind of value it is driving by using the following formula:
# OF CONVERSIONS * VALUE OF CONVERSION
Start measuring your investments today.
Armed with this information you can now start measuring your investments made into your website. For every change you make to your site, you should have a goal in mind of how much in will increase the value being generated from your website. You will quickly start seeing what works and what doesn’t. It will also help you keep your website focused and to the point. It is much more difficult to add filler and fluff to your website when you start measuring what kind of return it produces.