Web development in Sri Lanka has become vital to any company that wishes to portray a good image, and more and more businesses are investing in a well-design website.
However, it’s also expected by business owners that a website should produce a positive Return on Investment or ROI. It’s understood that a website needs to be a focal contributor for the financial success and prosperity of a business. The question, however, is how this success should be measured, especially for non ecommerce websites? Let’s take a look at how this can be done:
Understand that sometimes close is a good enough
Measuring ROI for eCommerce solutions in Sri Lanka is straightforward to some extent. In simple terms, this calculation amounts to (Income – Expenses) / Expenses = Return on Investment. On a more complex level, this basic formula may be slightly changed to include future income (lifetime customer value).
This gets tricky for non ecommerce websites when calculating the income from a website. The investments and expenses that go into a website is the easy part; what is difficult to figure out is when the income doesn’t come in through an online shopping cart.
This is where close becomes good enough – that is in quantifying the amount of income that your website brings in. The reason for this is that information that is close enough to be useful can be collected rather speedily and therefore allows good decisions to be made quickly. A good decision made in good time is always more profitable that a perfect decision made too late. Remember that timeliness is a valuable asset.
Counting the different ways
There are a myriad of different ways in which a website can provide a positive ROI. Even when a sale is made offline, a website can still make a very valuable contribution to the sale. For people who offer professional services, their websites can be valuable by helping in bringing in and identifying prospective clients, earning the right for serious consideration by a prospective client, enhancing staff efficiency, boosting the rate of closing the sale during an appointment and improving client retention and referrals.
While the factors mentioned above applies specifically for those who offer professional services, many of the factors listed are applicable to numerous other businesses across various industries too, including ecommerce retailers. After all, who doesn’t want to boost their referrals?
What’s the worth of a new client?
For you to quickly make effective calculations about your business, there is a number that you definitely must know. Without knowing this number, you could be making decisions that might seem favorable for a while but produce disastrous consequences in the long run.
This must-know number is the value of a new client. Many times, business owners aren’t clear about this number because they’re confused about the value of different types of customers that they serve. While it’s of vital importance that you segment your customers to serve them better and cater to their particular needs, this advanced strategy is best to be used when you’ve already got the basics in place. To do this, use the formula: Client Income / Number of Clients = Average Client Value.
On the other hand, the lifetime value of a customer is more complex to calculate, but is well worth the time to do so. To simplify things, you can calculate the value of a client over a span of three to five years as opposed to calculating a lifetime of the customer relationship. For this strategy you need to take into account the frequency with which the customer makes a purchase with you. In simpler terms, it pays off to know how much business an average customer will do with you over a span of a three or five year period of time.
Knowing the value of a new and average customer gives you the key to understand all sorts of valuable insights about your business tactics and marketing. This strategy is, perhaps, one of the most important aspects of a business that is often overlooked or unknown by business owners.
Helping in with the sales
Even if a sale is finalized in a face-to-face meeting, a website still has an important role to play in setting up the sale. This is done when a prospective customer is required to go to the website and read certain pages or even fill out certain forms. The purpose behind this is to allow them a safe environment and for them to become more familiar with your business, thereby ensuring that the actual meeting is completed more effectively because the common questions have already been dealt with on the website.
This also allows prospective customers to self-qualify themselves and it further facilitates the actual meeting to focus more on their needs and not on your business. Therefore, websites do assist in offline sales by setting up the closing of a sale conversation as well as increasing the closing rates for the sales conversions.
If your closing rate is meticulously tracked, the impact that your website had on your business can easily be quantified by comparing closing rates that uses a website in some way versus not using the website as a part of the sales process.
Due diligence and attention
A poorly performing or non existing website will cost a business a great deal of money which primarily comes in the form of list sales. This loss happens even when a contact is made with a prospective customer offline through a referral, advertisement or the like. Even if the entire sales process is completed in person or by phone, the lack of a website will cause a loss of prospective customers who are otherwise interested in your business.
This is because customers do go online to conduct their own research before signing on the dotted line. What they find out about your business can often make or break a sale. Estimating how many sales you’re losing due to a missing or poor website can be tricky. The reason for this is that most people who lose interest in your business after not finding your website or not finding the needed information will not tell you about why they lost interest. If you do suspect that your website may be losing sales in this way, make sure to work with someone who can help create a website that is functional.
For businesses, the marketing and sales process includes numerous different channels. For example, a prospective customer’s contact with you can take place across different channels like referrals, by email, a website, etc. The multiple touches that occur between a business and a customer all play a vital role in securing a sale.
So which of these different channels where the interaction occurred should be credited with the sale? In a situation like this, how can you quantify the impact of your website? While there are a number of theories and ways to choose from, the best way is to assign credit for the sale to the appropriate channel and to apportion credit for the sale on a percentage basis between all the different channels.
Time saved is time gained
Another area where websites can provide valuable contribution to a business is when it comes to efficiency. Websites can save you a lot of valuable time and to quantify the impact it has on your business, take a look at the different ways where your website saves precious time for you and your staff and then consider how much time it takes to handle the situation in person. Ask yourself: How much time is saved this way by your website every week? How much are these hours worth in your business?
Ease of recordkeeping
Few of us enjoy recordkeeping but it remains as one of the necessary things that must be done if your business has to improve and flourish. The best way to make something grow and thrive is to start measuring it because without it, hardly any positive change can occur. The cost of improvement is the time spent in measurement and analysis of results.
Make sure to have a spreadsheet or other such systems to keep track of important performance indicators in your business. This needs to be done at least on a weekly basis and it will depend on the nature of your business and your goals for it.
We have understood that measuring ROI is relatively easy for ecommerce websites. For non ecommerce websites, ROI doesn’t have to be a mystery. The main thing is to consider the number of ways your website contributes to your business and then quantify that. It is only realistic to expect improvement from something when it is measured and monitored on a regular basis.