The Web For Business.com Blog

Internet marketing observations, perspectives, tips and tricks for your education and enlightenment.


How to Measure Online Marketing ROI - Part 1

Mark Kawabe - Tuesday, December 06, 2016

Calculate ROI for Online MarketingMarketers (and those who hire them) want everything they do to pay off in some fashion. You're making an investment in a website, or email marketing, or social media marketing, and of course you want to see positive results. Measuring the ROI of a website or online marketing campaign is getting easier, but it still takes know-how to drill through the numbers and tell your finance department what they want to know. Here are a few thoughts on calculating the ROI of your online marketing efforts.

Getting Started

Let's say you're just setting up your business and getting all your marketing materials in order, including your website. If you have a business plan for your business, you'll probably have heard that it should be a living document. While a business plan is a good start, it needs to be adjusted as your new business meets the realities of the market. A plan is great, but being able to measure and adjust as you go is a necessity.

So, how do you calculate a projected ROI for your new website? Simple. You take an educated guess, then you launch, measure, figure out what's working and what's not working, adjust and repeat. Let's look at some of the factors that could come into play with this scenario.

Assumption: New website development cost is $10,000. Website will generate 5 new leads per month. With a closing rate of 40%, website sales will result in two new customers per month. The average value of a sale is $2000, so the website will generate $4000 in monthly sales. After 3 months, there will be $12,000 in sales attributed to the website. With a 20% profit margin, there will be $2400 in profits after 3 months from web sales.

Reality: New website costs $10,000, as budgeted. Website generates 2 new leads a month. After 3 months, there are 3 new clients, representing a closing rate of 50%. The average value of those sales is $1000, resulting in $3000 in revenue. The profit margin on these smaller jobs is only 10%, so there is a $300 profit from web sales after 3 months.

What Do You Do?

Nobody's happy when a website doesn't perform. Customers aren't happy. Developers aren't happy because their customers aren't happy. People who genuinely need the product or service being offered aren't happy either, because they aren't getting what they need. What to do?

There are many things that can be evaluated and tweaked to make a website perform better. Here are a few thoughts.

  • What is the website's reach? Are enough people coming to the website? Google Analytics is your friend here. If people aren't coming to your website, you can't expect great things from it. If you're expecting your website to convert visitors into leads, you have to make sure there are enough visitors coming to it. What can you do? Buy advertising. Better your SEO. Do content marketing - and market your content through social media and other channels.
  • How is the website converting? If 100 people come to your website every month and five people make a sales inquiry, your conversion rate is 5%. What if your conversion rate's only 1%? You'll need 400 more visitors to make up the difference. What can you do? Have better website content. Improve your CTA (Calls to Action). Make sure you're reaching your target audience. Ensure your website design, or site loading times or other on-site factors aren't turning people away. 
  • How is your sales staff converting? Unless your website is purely and e-commerce site, your sales staff are the ones converting leads from the website into customers. The website has done its job and pre-sold your product or service to a prospective customer. Now it's your sales staff who need to perform. Are they doing a good job? Do they have the tools they need to succeed? Did the website do such a good job that all your staff need to do is take the order or is there still a hard sale ahead? What can you do when sales staff don't perform? Invest in better training, systems, or people.

There's another factor to take into consideration with the above scenario. What if you didn't spend $10,000 on a website? What would you have done with the money? Would that have been money you didn't have to borrow? Would it be money you could have invested in other revenue-generating activity? While it's generally agreed that most businesses need a website, it's also true for some businesses that it's really not necessary for their success. It is possible for a business to have an online presence that's completely based on social media presence and exposure, but those businesses are the exceptions, not the norm. In the above scenario, there could also be a financial and psychological cost of not having a website. These things are difficult to measure, but not impossible.

As the title of this article suggests, this is part 1 of a discussion of how to measure ROI from your online marketing efforts. If you have questions or comments, I look forward to hearing from you. Your contribution to the discussion is appreciated.



It's All About the Leads

Mark Kawabe - Monday, November 14, 2016

Lead GenerationIf you're contemplating getting a website or redeveloping an existing site, you're probably trying to justify it to yourself. After all, it's usually not an inexpensive proposition. You're going to put some serious cash on the table. For what?

There are a lot of business owners who invest in a website because they feel they need one. "It's expected that a modern business will have one". This is true, so if you're going to have one, then you should really be asking yourself how you're going to make it "work".

A "working" website is one that converts site visitors into leads. It doesn't matter if 100 people arrive as a result of person-to-person networking or from Google, as long as the site converts.* Conversion of visitors to leads is pretty much the only important metric that matters to the health of your website. A site with a 1% conversion rate needs 5 times as many visitors to achieve the same results as one with a 5% conversion rate.

Business owners need to ask questions based on lead generation. Questions like:

  • How are we going to get new visitors to our website?
  • How is our new/redeveloped site going to convert visitors into leads?
  • What content do we need to have on the site to help us achieve that goal?
  • What processes do we need to have in place to convert leads into sales?
  • How will we track our results? How will we change if we don't get the results we'd hoped for?
If you're going to invest in a website, you're investing in a lead generation tool. Consider all the ways a site can work for you. Then work with your developer and your marketing team to make it a reality. Or, if you'd like, drop us a line and we'll be happy to talk to you about how we can build you a site that converts.

*Actually, it DOES matter, but that's a topic for another article.

What's New for YOU in 2012?

Mark Kawabe - Tuesday, January 03, 2012

Welcome to 2012. I'm glad you've made it this far. What's going to be new for you in 2012?

Here are my predictions about the changes most small business owners will make in 2012 to their online marketing efforts.

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If you don't see anything listed above, well, I hope you get my point.

It is my prediction that MOST small business owners will continue to market themselves online more or less the same as they've been doing.

I think there are many reasons for this, and they're remarkably similar to the reasons most other new years resolutions fail.

  • It's too much work.
  • I don't have time.
  • It won't make a big difference.
  • I don't know how I can do things better.
  • I don't have time to learn how to do things better.
  • I don't want to learn something new.

And so forth.

Most want results without the investment required to achieve them. That's nothing new.

What I'm hoping is new this year is for more people to choose to prove my predictions wrong.

I wish you peace, health, happiness and prosperity in 2012.

With my Best Regards,

Mark Kawabe

What's the Center of YOUR Online World?

Mark Kawabe - Thursday, December 15, 2011

I've gotten requests from people to join every conceivable social media platform. One person I know is probably involved in at least a dozen of them. When you're a person, that's fine, but if you're in business, is this the best approach?

The one thing many businesses have neglected in their rush to join social media sites is the one thing they have full control over: their own websites.

Think about this for a moment. Your business has its own brand, its own message, its own story. When you focus almost exclusively on Facebook, LinkedIn or any other platform, are you driving people back to your website?

Take the time to look at your website with fresh eyes. How many people are visiting? How many leads is it generating? How is it converting? 

Being involved in social media's a good thing, but it should be a part of your overall online strategy. Prospective clients are going to look beyond social media to learn about your business, and that means their next stop is your website.

Make sure your website's still doing its job. If your primary social media outlet shut down tomorrow, would you have created enough meaningful relationships through it that you would still be thriving? Perhaps this could be a resolution for the new year: make your website the center of your online world.

If It's True for Graphic Design, It's True for Online Marketing Too!

Mark Kawabe - Thursday, March 03, 2011

In her article "6 Questions to Ask Before You Spend a Dime on Graphic Design", author Pamela Wilson highlights the main questions one should ask a graphic designer before starting a campaign.

She could have just as easily substituted "Building a Website" for "Graphic Design". The questions are the same.

Here are the questions:

  1. Do you know who you're trying to reach?
  2. Do you know where to find your market?
  3. Do you have a decent tagline?
  4. Do you have a compelling offer?
  5. Have you positioned the offer in terms of benefits along with features?
  6. Do you have a system in place that will lead toward sales?

Here's the link to the original article.

I consider this a must-read for anyone doing business online.

Happy Thursday!

What Level Playing Field?

Mark Kawabe - Wednesday, March 02, 2011

Remember those heady days when people used to announce that "the internet has leveled the playing field"? Well, it's still kind of true. The abundant existence of online tools to help entrepreneurs and smaller companies get their message out to their target audience means that there are no longer significant technology or cost barriers preventing small companies from getting bigger.

That being said, the playing field is still not a level one for several reasons.

  1. The DIY Mindset- small companies start small and most of them stay small if they make it past the first five years of life. I believe the mindset of the owners prevent them from growing their companies in a meaningful way. Many take on too many tasks that prevent them from developing their core strengths. Bookkeeping, graphic design, printing and website development are a few categories that come to mind. It reminds me of the saying "Just because you can doesn't mean you should".

  2. Budget - closely tied to point #1, small companies are loathe to spend money unless it's guaranteed to produce results. The flipside of this is that they then do things themselves, not realizing the damage they do to their brand and in the long-run, to their companies.

  3. Knowledge - There are a lot of tools available at little to no cost that companies can use to market themselves online. Many companies either don't know they exist or don't know how to use them effectively. A little bit of knowledge can go a long, long way. An example of this is with online metrics. There are many ways one can measure how effective one is being online but most companies don't even know how many people are visiting their website.

  4. Willingness to Change - Many companies do the same thing, year in and year out, getting largely the same results as they've always gotten. As long as you're happy with that, then life's wonderful. If you want to grow, you have to be open to doing things differently.

There's a lot of new-age speak about how your intention determines your outcome. I think this is a good place to start. You should intend great things for your business. What I suggest is to clearly define your intended outcome and then think about the ways you're going to achieve it. Identify internal and external roadblocks and work on eliminating or neutralizing them. Take the time to learn how to EFFECTIVELY use the tools that are available to you and start working on your plan. That will be much better than intending great things and fumbling around without a plan on how you'll achieve them.

New Logo

Mark Kawabe - Thursday, September 30, 2010

Yep. There it is. Our new logo.

So, what does it really mean?

Since 1998 we were using the spiderweb-based logo. In 2009 we switched to a wordmark instead of a logo and now, we're back to a logo. Whether it works for you visually is up to you, so I will withhold judgement on it. Needless to say, I like it enough to move forward with it, and ultimately, that's really the point - moving forward.

I've been helping companies market online since September 8, 1997. The internet landscape has changed a lot. Instead of getting into Yahoo's directory in two days, it now costs $299 US a year and takes up to a week to get reviewed. Google didn't exist. The only companies using video online were porn sites (so I heard). Blogs, Facebook, MySpace and their ilk? Far off concepts back in 1997.

Despite all these changes, the fundamentals of marketing online have remained the same. There are more options now than there were 13 years ago, but the base requirement is still having something worth saying, saying it well and letting people who will care about what you're saying know you're saying it.

So the new logo displays the company name in a different way, but what we do remains the same: we help companies use online technologies to grow their business. One day I'll get that down to three or four words and make Dennis O'Neill a very happy man ; )

To my clients: as I enter my 14th year in business, I want you to know that I appreciate your support more than words can communicate.

To my friends: thank you for putting up with my stories of entrepreneurship.

To my business acquaintances: thank you for sharing the journey.

To all of you, thank you for being a part of my life. The present is a gift and the future is exciting. Let's see how we can grow together.

Moving forward.

Getty Copyright Infringement Letters

Mark Kawabe - Tuesday, September 21, 2010

A client of mine informed me today he had received a letter from Getty Images claiming he had violated their copyright on two images used on his website. Along with the claim was a request for over $1000 in "damages".

This is a potential challenge for anyone with a website, because as my client noted, he had no idea where the images on his website came from. He had his site built years ago by a designer who is no longer in business who subcontracted the work to another developer in another country. Being able to find out whether the images were licensed or not is virtually impossible.

So, what to do?

Unfortunately, in cases like this, if you are the owner of a website you are liable for the images on your site. You can ask your designer where they got the images and if they can't tell you, then you'd likely be able to pass along anything you pay to your designer as they're the one who got you into the mess in the first place.

Otherwise, you could be stuck with the bill.

Some of the arguments I have read about alleged copyright infringement discuss how people downloaded images from websites offering "free" pictures. Rarely is anything truly free when it comes to images, so tread cautiously if you're going to do this. I have read some stories about "free" image websites where the images were stolen from another website and then offered as free. If you use one of those images and get a copyright infringement letter, you'd better be able to prove you got the image from a free website, along with the exact URL(s) and the date of download.

At The Web For Business.com, we use only use licensed images from stock photography sites for our clients' websites unless they provide us with images to use. We also ask our clients to sign a waiver that acknowledges any images they provide to us are free of copyright and are properly licensed. If they don't sign the waiver, we don't use the images which protects us both.

Copyright infringement is widespread online. Avoid it by purchasing licensed images for your site. There's a cost, but it's worth it to avoid the stress and possible financial penalties when the copyright lawyers come calling.

What's Your Title?

Mark Kawabe - Wednesday, September 15, 2010

The title tag is one of the most important bits of information on your webpage. Chances are you've never thought about it. Here's an explanation of what it is and why it's important.

Look at the top of this page. Right up at the top of the screen - above the browser's toolbar. If you're on the main page of the blog, you'll see the title: "The Internet Marketing Passioneer's Blog". There it is. Nothing special, right?

Wrong. Search engines love titles. If you look at the code of a webpage, the title will be right near the top, between the <title> and </title> tags. Search engines use the text in the title tag to determine the subject of a webpage. It's one of the most important things you can change on your website, aside from the obvious of having quality content.

I met with a client today whose website's homepage had a title of "index". No keywords. Just "index". When you consider the homepage is the main page of the website and is usually the page you want to show up in the search engines, it's important to have keywords in the title.

Make sure your website developer puts relevant keywords in your page title. Every page of your site should have a unique title. EVERY page.

If you need any assistance with adding titles to your website, I'm happy to help. Just contact me at your earliest convenience.

Launch of Road to Recovery Natural Health

Mark Kawabe - Thursday, September 09, 2010

Today is the "official" launch of a new website for Craig Bowman. Craig's a Registered Holistic Nutritionist who is on a mission to guide people to better health through changes in diet and nutrition. He's a hall-of-fame weightlifter, husband, father and now, he's online.

Introducing: www.RoadToRecoveryNutrition.com

Ta da!!

Welcome online Craig!

Now, of course, the fun stuff begins. As I tell all my clients, getting online is the first step. Figuring out what to do online is where it gets interesting. We will be marketing Craig's guaranteed customized nutritional support programs throughout the GTA. In particular, Craig has developed a special cancer support program that has produced some spectacular results in some clients.

If you need some help getting your diet sorted out, give Craig a call.

On another note, the video on Craig's website marks the first collaboration between me and Merv Wrighton of UBU Video Productions. Merv's a long-time acquaintance and has gone into business to pursue his passion for making movies.  I'm sure you'll be seeing more of Merv's work on our websites in future.