Measuring Website ROI

Every new business comes with start-up costs and your new website is going to be one of them. But rather than thinking about your website as simply a sunk cost, like paying taxes or business registration I like my clients to think of it more as an investment in new business.  As a small business owner, in particular, you want to know that the money you’re investing in your website will actually come back to you in terms of new sales.  But how do you measure that?

To do this my clients need to think about the future value it will bring to that business’ revenue and sales growth.  When starting out estimating that return can be a challenge, especially when starting out.

Here’s a good way to consider how to value your website’s return on investment with a useful calculation that can turn this into a dollar figure for you.


The first step is to really get to know the costs of your website. These are both one-off and ongoing costs.  Things like your hosting, maintenance fees, and domain names are ongoing and will be known as part of your agreements. These can be estimated by your web developer if you are just starting out.

The other part is the one-off costs, like website design and building your site, which can vary depending on the functions you choose for your new website.


The second important step is to understand how much traffic your website is generating. That is how many visitors are coming to your website and being exposed to your brand and product.

Any calculation of a return-on-investment of your website needs to start with how many visitors are coming to your website. If you already have a website you should be able to get this information from your web statistics, if you have a new website being built for you then insist that Google Analytics is included in your build so that you can track the number of visitors arriving at your site.


When you know your website costs and your visitor numbers you want to understand how these visitors drop into your sales funnel and end up as sales.

What you’re really looking for is how many of these casual website visitors you can follow up as an inquiry either using a web form on your website or by contacting you by some other message like phone or chat.

These converted leads are an important figure, but also the closure rate is important too.  For most businesses on the web, the visitor-to-lead conversation rate is about 3%.  These are the people that take some action on your site, e.g. fill out a form or call you to make an additional inquiry.  Of that 3%, you can reasonably expect about 20% of those contacts to result in a sale.

These may change depending on your business, so understanding your own unique sales funnel is also important.


Knowing these things will allow you to get a better idea of what you’re getting for your website dollars.  Your return on investment is a basic accounting and investment concept you should always consider when making a decision to build or redevelop your existing site.

Let’s say your website costs $8000 to develop.  Take a deep breath, because that sounds like a lot of money to outlay right?

You can reasonably estimate that this website will keep you in good stead for about three years.  Over that amount of time, you might expect technologies and design trends to change enough to prompt you for further design work.

This means that over three years, your cost per year of that website is about $2660, once it has gone live.

You also know that your average customer is going to spend about $450 on your site when they make a purchase.   This means that in order to cover the costs of the website, it needs to be responsible for delivering you six customers a year.

Let’s look at the math of getting those website visitors.  Say your website has 600 visitors per month (which is about 7200 visitors per year).

If 3% of these people submit a form or pick up the phone to contact you, that will give you 216 leads.

If you close 20% of those leads and turn them into customers, that means your website has generated 43 customers.

And if each of those customers spends $450, then you gross $19,350 in revenue.

Now back to your investment of $8000 in your new website.  If your revenue generated by your website leads over 3-years is $58,050 then your website ROI over those three years is north of 700%.

Not a bad return on a modest spend.  Do you agree?

So here’s that calculation of ROI.

Website ROI = average customer value x annual customers / yearly website cost.

An attractive website that’s designed to make your customers feel confident and take action is what you need.

The true cost of your website is perhaps the opportunity cost of not taking action. Can you afford to not understand the return on investment of a high-quality, lead-generating website?

If you want to attract visitors, generate customer leads, and convert them into customers then book in for a free 30-minute consultation and let us take the next steps with you.

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