If you’re selling a product or service then it is essential that your website attracts the right kind of visitors and converts them into leads and eventually sales. A website is, after all, a key part of your marketing toolkit and the foundation of all your activities online. So it makes sense to ensure that your website is optimised to generate leads and provide customers with the experiences they want.
It is possible to measure the value of leads generated on your website, even if they don’t make a purchase online. This involves looking at the rate of conversion and coming up with the average value of each lead arising from your website traffic, specific campaigns or locations on your website.
Understanding your visitors
The ability of your website to convert leads is just one measure of return on investment in a website. Other measures include the total number of visitors to your website, whether they are returning, where they are coming from and what they are doing on your website for example. It is important to have analytics in place to capture this information as this will feed into successful lead generation.
For example, if you can see through looking at analytics on your website that most of your potential leads are coming from posts you have placed on Facebook, the next step is to ensure that the link to your website or landing page includes content related to the Facebook post and allows the user to take action within one or two clicks.
In another example, you might prompt visitors to provide contact information in order to access longer or high-value content on pages of your website that are the most popular or where people spend more time.
If your landing pages are successful in getting visitors to take the desired action, then you know that your content is brining the right people to the website. Conversely, low conversion rates can indicate areas of improvement.
Conversion tracking on your website will measure conversion actions that could include making a purchase, submitting a form, calling your business, engaging with your online chat, signing up for a subscription or trial, registering on the website, upgrading their service or downloading something.
These are just some examples of conversion actions, which are basically measurable actions that progress a potential customer towards becoming an actual customer.
Once you have assessed the current status of the lead conversion through your website and have accurate information on the value of the products or services being targeted, you can relatively easily calculate how much money your website is making.
First of all, you need to determine the conversion rate of your website or specific campaign. To do this, you divide the number of conversions you get in a given time frame by the total number of people who visited your site or landing page and multiply it by 100%.
Conversion rate = (conversions/total visitors) x 100%
For example, if a specific campaign to convert visitors into paid subscribers received 23,456 visitors to a landing page and 478 visitors took the call-to-action, then the conversion rate is 2%.
In another example, if your website had 110,098 visitors in one month and 5,431 made contact through the online contact form, then the conversion rate is 5%.
Average value per lead
The next step in working out how much money your website is making, is to calculate the average value per lead. This will obviously vary for different organisations depending on the style of their business and the product or service being targeted by certain conversion actions or campaigns.
It is necessary to come up with the average value of a sale. In the instance of a company wanting visitors to contact them via an online contact form or by phone, the average value of sale would be based on the intelligence they have on their sales process over time. For example, a construction company may have a large average value of sale such as $100,000 per client. In contrast, an online clothing company may have an average value of sale of $100.
In the instance of a marketing campaign where the conversion action was to download an ebook related to a specific product or service, then the average value of sale may be calculated in relation to that particular offering. For example, an ebook related to online investing could be linked to a seminar where the average ticket price is $2,500. Or, an ebook on repairing motorcycles could be linked to a range of parts for sale with average price of $100.
The following basic formula is effective in most situations:
Average value of sale x lead conversion rate = average value per lead
Taking one of the examples above, if the average sale of the motorcycle parts dealer was $100 and the ebook campaign had a lead conversion rate of 25%:
$100 (average value of sale) x 25% (lead conversion rate) = $25 (average value per lead)
But how much money is my website making?
If your website produces 200 leads per month or 50 leads for a specific campaign then it is easy to calculate how much money your website is making, as follows:
Number of leads x value per lead = $ value of how much your website is making
Taking further the example of the motorcycle parts dealer from above, if the ebook campaign converted 1,000 leads then the overall value would be in the region of $25,000.
These examples show that with basic analytical tools and good insight into your prospective customers and your sales process, it is possible to calculate the value of campaigns and activity on your website more generally.