ROI Perspectives

Ever looked through the wrong end of a pair of binoculars? Everything is still all there… Just very very small. That perspective, or lack thereof is often the way web site operators look at their business, and how it’s marketed. Sometimes people realize they can’t see the forest for the trees. This lack of perspective is a problem that plagues us all from time to time. Lucky are those who recognize that, can adjust, and can review the ROI of their online presence.

I often refer to the Internet as a kind of Library of Congress, plus everything else. Perhaps it’s more akin to the Great Library of Alexandria, in that it is a repository for anything anyone publishes anywhere. It makes no accounting for where anything was published, or by whom, or whether it qualifies. All that matters is that it’s published and therefore it should be available to be found. This open door policy was the undoing of the original Great Library. But I doubt that we will see anyone burn the Internet to the ground. If you don’t know much about the history of the Great Library, and the new one. The History of the Library is fascinating, as is the new library. For the Great Library, the fact that you could track virtually anything was bad news. People could become overwhelmed by data, and some people do not want people to read “heretic” ideas, or other ideas, beliefs etc. that oppose their own. Because the Internet does not contain one central repository, it won’t get destroyed that easily. Although it does go down for cleaning and maintenance from time to time.

With regards to business perspective on online marketing, fortunes are spent on IT, but precious little is spent on building a developing a sound marketing strategy to support it. However, there is hope; focus is slowly shifting to look at the return on investment (ROI) on the web sites that were built. This shift means more and more individuals are looking at ways to improve the ROI for their online presence, in part so that they can justify the necessary updates and upgrades. If you have not figured out the ROI on your web site, you are not alone, and it’s something you can easily do starting today. I recently met with an individual who works for a huge company with billions in sales. I was disappointed to discover that even a company of this size had only just started looking at their web site as a marketing tool, let alone how to market it. The good news was they had taken note of their oversight and were working to correct it.

Here’s how to do it. Some things are easier than others to quantify. Sometimes a marketing expense is one whose return builds over time. Other times it pays immediate dividends. Start with the objectives. These are simple broad objectives: What do you want to accomplish, and what will qualify as success? A clear objective must be quantifiable. Is it designed to get you 200 leads that turn into 20 sales in the next 60 days?, or just 5 key leads which will take 1 year to develop? Once the objectives are laid out, look at the strategies how to get there. If the objective is the 5 key contacts, what can you do to prepare for them, to get warm introductions, and to build the relationship? If it’s 200 leads, what are the common denominators you are looking for? Have you laid out the proper strategy and resources for acquiring these leads and converting them? Then it’s all about the execution.

Perspective comes in when you review the results. Was it worth it, and when will you be able to make that determination? Were there spin off benefits that you had not forecast? Did anything go wrong? This isn’t very difficult. With regards to your web site strategy, here’s some general tips:

For ecommerce sites, the obvious objective is straightforward. Increase sales, and lower the cost of acquiring the customers. This means don’t just look at increasing sales, but see how you can increase sales without substantially increasing costs. This means, you want to measure your net sales, and compare that data with your sales per visitor, cost per visitor, and conversion rate. Less visitors who buy more is better than more visitors who buy less. They cost less, and likely get better service.

For content or informational web sites, objective is simply to increase readership, and the overall level of interest in the content provided. There are lots of metrics to do this. I would reject any that try to tell you about “length of visit” as this is a poor measuring stick. I would argue you need to carefully monitor the relationship between page views and unique visitors. While you want more visitors in general, what you really need to watch is how many page views does each visitor actually do? The higher the ratio (The more pages each visitor reads) the more successful your web site, and it’s marketing campaign is. It means your target audience is finding your web site.

If you are not monitoring your ROI in some way, you’re probably not doing a great job building or maintaining that web site. Being able to monitor the ROI, and objectively review the results is what perspective is all about.