Thursday, February 23, 2012

Getting to ROI on Your Next Web Redesign Project

A marketing colleague and I recently had an interesting dialogue.  How can we calculate a Return on Investment (ROI) of a business-to-business website redesign project?

The Key to ROI
A clear ROI involves setting the goals of the website redesign project well before the redesign takes place.  ROI involves setting and calculating key web performance measurements, usually reported from Google Analytics.

Many Factors
Note that many elements factor into web redesign ROI.  

Search Engine Optimization (making it easier for prospects to find you); an intuitive user experience (making it easier for prospects to navigate your site); improved content (making your site ”sticky” so that people will want to return or value your thought leadership); and “call to action” on the site (making it easier for prospects to download a form or fill out a form) all work to generate performance improvements. 

Critical Measurements
Each web performance measurement must support the overall objective of the redesign project. A typical business sets a goal of an increase in website lead generation performance.

  • Number of non-paid web visitors (those visitors not driven by pay-per-click (PPC) programs such as Google adwords or MSN)
  • Conversion rates for lead generation of non-PPC visitors filling out “contact us” or forms for papers, offers.
  • User performance such as number of inbound sales-related phone calls.
  • Average page views per visitor.
  • Bounce Rate or percentage of initial visitors who "bounce" away to a different site, rather than continue on to other pages within the b-to-b site.
  • Time on site
  • Overall sales growth including increased revenues and business expansion.

Sample Success Story
Here’s an example of a web redesign success story, coordinated with my colleagues at Markit Strategies and PR a few years back.

·     Conversions: Since launching a b-to-b client’s new web design and content, conversions in a typical 60 day period (the amount of non-PPC visitors who visit the website and take an action like filling out a form to obtain a white paper or contact us) increased by 33%

·     That means the amount of leads generated by the website increased due to the ease of downloading a paper, or requesting the company contacts them.   Optimized contact form and landing pages played a role in this increase in conversions.

·     Inbound Calls: The percentage of site visitors who contact via the 1-800 phone dedicated to sales doubled since the redesigned site launch

·      Average Page Views:  In a 60 day period, the Non-PPC Average Page Views per Visitor grew by 41% since redesign, which is a good indicator of the value of the content. 

·      Visitor Bounce Rate: The rate of visitors who land on the site and immediately leave, dropped by 50%.

·     Average time on site: In the same 60 day period, average time on site rose by 45%.  This means the site is easier for users find info pertinent to their own industry.

Not There Yet….
The metrics above are not the complete story when it comes to ROI.  It's important to track the following pre- and post-website design benchmarks.
Pre-Redesign metrics
                Average monthly visits
                Average conversion rate (leads)
                Close rate (leads to sales)
                Average order price

Post-Redesign metrics
                Average monthly visits
                Average conversion rate (leads)
                Total cost of web redesign project

Assuming ongoing maintenance and marketing costs of the new website don’t change, and assuming close rate and average order price remain the same, the Return on Investment of the redesign is found as follows:
Step 1:  Calculate the improved Sales Revenue as a result of Improved Conversions, using the percentage of conversions of new monthly visits multiplied by the average order price of closed sales.
Step 2: Subtract the result of Step 1 (Improved Sales Revenue as a result of Improved Conversions) from the fixed cost of redesign in dollars.
Step 3: Divide the result from step 2 by the fixed cost of the redesign in dollars.
Step 4: Multiply the result of step 3 by 100%.
There you have it – a percentage ROI of your web redesign project!  


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