“How much should I budget for my website?” is a question that we are asked all the time. It’s a fair question, but the answers is often hard to come by. But never fear, we have some strategies to help make that determination.
Like any expenditure, the budget for a website needs to be based upon how important it is to the business – or put simply: “What value can we expect the website to generate?”
The same goes for any expense, really – a car, a building, a tool. But attributing value to a tool (and a website is essentially that) can often be tough. But it’s not impossible.
First, let’s break down the two basic ways that website are used for businesses:
#1 Transactional Websites
These websites sell products to consumers, directly. They start and complete their transaction on the same site, in a short amount of time. Therefore – determining the value of a website “conversion” is easy – it’s a sale of goods for money, so there is a finite value attached. And with repeat transactions per customer, you can even define a “lifetime value”. Easy peasy.
#2 Lead-generating Websites
For businesses that are service-based the sales processes is more complicated and has a longer timeframe. The website you are on right now is a good example. We don’t sell canned products – we sell our time as a service to clients through projects and ongoing partnerships. What we need from our website is for it to attract prospective clients, in the form of phone calls, emails or form submissions. We refer to those as “leads” or “prospects”. Up until we sign a contract we have no way of knowing what their value to us might be, and that transaction does not take place on the website.
What we can see here is that assigning value to an ecommerce or retail website is easy and immediate. Lead-generating websites have transactions that don’t happen immediately and does not happen on the website, and it’s near impossible to assign value at the moment they become a lead through the website.
How do determine value of a lead from a website?
There are two components to this calculation: attribution and client value.
Attribution answers the question “Where did this lead come from? (web, email, referral, etc)”.
Client Value answers the question “How much revenue are they responsible for?”.
Both of these things require historical documentation or tracking of some sort. Both of these If you do not have these, it will be difficult – but not impossible – to assign value to your website (or other marketing functions).
You’ll need some historical information to make a value calculation – but you might not necessarily have that right now. However, there are ways to get it if you aren’t currently tracking it:
- After-the-Fact Attribution & Valuation
- Real-time Attribution & Value Tracking
After-the-Fact Attribution & Valuation
If you don’t have historical documentation, that’s OK – but you will need to have some data to put into a value / ROI calculation.
This can be done in a number of other ways:
- Sampling & Surveying
Surveying a sample of existing clients is a good way to get started.
Surveying employees who handle leads can also work – but is likely to be inaccurate if they have not documented the data.
Finally – estimation. This is often inaccurate, but better than nothing. It can give you perceived or anecdotal evidence, but should be followed up by harder data.
Real-Time Attribution & Value Tracking
Attribution Tracking requires documentation of each lead somehow – either automatically or manually by the person who interacts with them first.
There are many ways to achieve this – automatically using tools like Google Analytics, smart website forms or just follow-up surveys.
Documenting this in a CRM (customer relationship management) or sales pipeline system is ideal. This could also just be a spreadsheet. Get the data however you can, and be consistent!
There are automated ways of doing this as well – email clicks and form submissions from skofirm.com could be automatically placed into a CRM system, for example.
Regardless of how the lead makes it into your database – “tagging” a lead with a piece of data that indicates the channel from which they first appeared to you is necessary. Further, inquiring how they came to be aware of you is also helpful.
Lead: John Doe email@example.com
Attribution Channel: Contact Us on viastudio.com
Referral: Email Newsletter
Then, after you begin to do work for them, they become clients. To accurately gauge value, value must be tracked for each client.
Client Value Tracking
This is the next step to follow “attribution”. Once they are in your client roster and have been properly attributed then it’s fair to ascribe their value to that attribution channel, at least partially.
After this practice is put into place, the reporting is fairly straightforward – filtering and summing can give you a total revenue per attribution channel.
If you haven’t started recording attribution data – either automatically or in-person from prospective clients – do it now, in some form or fashion.
If you don’t have a way to determine your value-per-client, start thinking about how to do that now.
For both, directly-sources data would be great, but failing that estimation is better than nothing.
In time, with these data points, you can accurately determine the value of your website – or any other tool you use to acquire clients.
At the end of this process, you will have:
- How many of your clients (%) came to know us through our website (or other digital means?)
- How many of your clients (%) first contacted you through the website (contact form or email click, etc?)
- Dividing practice revenue by these percentages will give you an estimate of revenue attributed to the website.