Before you take on a big project like developing or reworking a website, it is a good idea to know how it will benefit your business (or not). Determining the Return on Investment (ROI) of the project before you get started can be a way to keep the project within your budget and still get a benefit from the outcome.
Use the ROI ratio. The ratio used to calculate ROI compares the net profits and the costs of the site. This is calculated using the following formula:
ROI = (Turnover – Costs)/Costs
One of the advantages of this formula is that it provides a clear relationship between the benefits of the site (Turnover) with the drawbacks (Costs) to understand how the site impacts business, either positively or negatively.
Use the purpose of the site. However, before you can calculate the ROI, it is important to think about the purpose of your site, since that will impact how ROI is calculated. For example, an e-commerce site will calculate ROI using sales using an average selling price. On the other hand, a showcase site will calculate ROI using factors such as hits or time spent on various pages by unique visitors.
Define performance indicators. Performance indicators help determine conversion rates and help determine the profitability of the site. These go along with the purpose of the site. What constitutes a conversion based on how the site is used?
Analyze competitors. If you are still having trouble calculating ROI, a competitive analysis can be useful. This can give you an idea of how your competitors are using their sites as well as what is “normal” for your market niche.
Utilize Google Analytics. Google Analytics can also be a valuable resource for tracking information as well as comparing past and present data to see progress.
Determining ROI is an important part of web design so that you know what the outcome of the project will be. By taking these things into consideration, you can develop a site that gives your business what it needs without overextending the costs.