Websites are an investment. Business owners and executives want to look at dollars they spend to see how many dollars it brings in. Or in other terms, ROI. If you can justify the cost based on the value that it turns into, spending the money becomes an easy decision.
For eCommerce companies, it’s easier to put a dollar value on your website. How much money does it bring in from selling your stuff is a pretty easy question to answer. That shouldn’t be the entirety of the equation, but it’s a quick and fast number to get to.
What about non-eCommerce websites? If you don’t transact on your site, how do you get to that dollar value? Since the site is not driving business online, it needs to drive business offline. If your website does neither… you might be in trouble. Tracking business growth offline that came as a result of your online marketing efforts is a tricky task, but it’s one that can be accomplished with math. Let’s look at a simplified example of how you can use your website analytics to start tracking the value of your website and digital marketing efforts.
To do this, you’re going to need to know some numbers about your business. Let’s pretend you own a bicycle shop and you’ve learned over the years that about 10% of the people that walk through your door end up buying a bike. You’ve also learned that the average purchase amount for transaction is about $600. So this is our foundation:
This means that for each person that walks into your bicycle shop is worth about $60 to you at the end of the day.
So now you have a metric you can use to gauge the value of walk-in traffic. Using that number, you can now look at your online activities to see how you can increase the number of walk-in traffic you experience. Let’s keep going.
On your website, we initiate a tracking feature that measures how many times someone clicks on your address to get directions to your store. People that click on your address to get directions likely have an intent to physically go to your store. This is good website traffic to have and shows high intent. Getting directions is an action that is beneficial for your business growth because it turns into people physically entering your store.
So over the course of 30 days, let’s pretend you had 2,000 website visitors and with our tracking in place, we logged that 15% of those website visitors clicked on your address. That translates to 300 people visiting your website and then went to get directions to your store.
Not every single person that clicks on your address will show up, but a good percentage of them likely will at some point in the near future. Otherwise why would they try and get directions there? Let’s say half of the people that click on your address to get directions actually show up in the store (50% show-up conversion rate). That means out of the 300 that clicked your address to get directions, 150 of them physically showed up.
Now that we know how many people showed up in your store because of your website AND we know how much each in-store visitor is worth, we can calculate how much value your website had for you the last 30 days.
Now this number is arbitrary as we made a lot of assumptions here. So this is going to fluctuate based on what you see are realistic statistics that take place for your business. This calculation also does not take into account other valuable insights as well. For example, how many phone calls did you receive from your website? How many form submissions did you receive? Maybe they clicked over to your social media page and got your address from there instead. Those are all value adding activities as well that will turn into business growth. So this calculation can get very complicated really quickly when you start to take into account all the variables in play. Not to mention the brand exposure and awareness building also has a positive impact, even if a user doesn’t take a tracked action today doesn’t mean they don’t become a customer in the future.
What's the point?
To really understand the importance of this activity, you’ll want to take things one step further. You can use this analysis to look at what specific inbound channels are driving the most website traffic, the most address clicks, the most phone calls, etc. By doing the analytical work here, you can get a real clear understanding of the marketing activities you are doing that are having a positive impact on your business. This is how you learn to spend your marketing dollars wisely. It’s no longer a spray and pray approach. You can be strategic in every marketing dollar that you spend because you can have the data to tell you where to spend it that will drive the most growth.
For example: If you see that Facebook ads are driving a lot of website visitors and people clicking on your address in comparison to Display ads that are not, you now know to spend more money on Facebook ads than you do on Display ads. This is exactly how data driven marketing works, and it’s an extremely effective way to grow your business.
Use the data to help understand what is driving your business forward. Take the information and invest more into the activities that generate business growth and spend less resources on the activities that don’t.