Are
you giving your website the credit it deserves? (Part
1)
The
same old story … an underperforming website … a desire
to make the site more effective and a small budget.
First
question: What is meant by "more effective"? We have
learnt that most clients tend to focus on just a fraction
of their website’s value.
If
you are struggling to justify your website’s effectiveness
and haven’t yet identified and quantified your website’s
value in dollars, it’s maybe time you did.
Value
comes in two flavours: additional revenue and reduced
costs.
We
typically look at two types of value behaviours: direct
and indirect.
Concentrating
on the direct ones:
Sales.
How much revenue does the site generate through direct
sales? Try looking at your gross online margin. How
does it compare to offline sales?
Next, estimate the lifetime value of new customers finding
you via the Internet. Maybe they began their relationship
your business with a small purchase, but understanding
and quantifying what that may lead to is a key exercise.
Leads.
Generating leads, not sales, may be your site's primary
goal. Rather than just look at the raw number of leads,
try to quantify their value, too. Solid offline tracking
can show you close rates as well as average sales values
of the online leads. If your site generates an average
100 leads per month and 20 of them end up in sales averaging
$500 each, a website’s lead value can be calculated
at $100: (average leads closed divided by total
leads x average revenue per sale = lead value)
Be sure to give credit for that.
Customer
service. Your website can be an effective way to
service customers at a much lower cost than offline
options. If you want to calculate the impact of your
website on overall customer service costs, firstly,
you have to know your baseline costs. For example average
per-call call centre costs, can range from $3.50 to
well over $10, where as answering an email can cost
$1.50 to $3.50 or more. The cost of a site-based service
transaction is usually well under $1.
So do the maths and understand the volume of each correspondence
type and the related cost. Then you can determine the
efficiencies of your website. For example:
Call
centre: 1,000 calls x $5.00 per call = $5,000
E-mail:
500 email messages x $3.00 per email = $1,500
Web:
800 help visits x $0.30 per visit = $240
Total
support costs: $6,740
Average
cost per touch: $2.93 (total costs divided by total
support touches)
These
are examples of direct values that are fairly easy to
quantify for many sites. They are also quick exercises
to provide the ammunition you may need to justify your
website‘s effectiveness.
Don't
forget that equally important are indirect value measurements,
such as your website’s value as a research/reference
tool, as a promotional and awareness tool, enhancing
customer satisfaction, and much more.
You
should, of course, consider all the different ways your
website impacts on your bottom line, but a good place
to start is to calculate that impact in hard cash.
