Your web site is part of your marketing budget, and therefore an important business expense. But are you getting a good return on your investment? Make sure it's paying for itself before you decide to keep it up for the next year.

Once your web site has been up for at least a year, you may start wondering if it’s worth supporting for the following year. The equation is rather simple: Is your web site adding more value to your business than it costs to operate? Read on to learn about some of the factors that will help you figure this out.

You might do your calculations in one of three ways, depending on what type of business your run. If you are selling products online, you know exactly how much money came in via the web. If that amount is more than you paid for the site, you’re done! Sign up for the next year and think of ways to add new value for your online visitors.

Service businesses don’t have such an easy device to measure success, and of course non-profits have different types of goals for their sites. Let’s take a look at a few examples.

If You Sell Your Products Online

Let’s say you have a web site that cost $2,000 and you are selling your hand-crafted bird houses for $50 each. To pay off your web site, you’ll have to sell 40 bird houses. If you sell just one a week you will have a 100% Return on Investment (ROI) in less than a year. Anything beyond that goes to the profit column. It’s an easy decision to continue funding the web site.

However, if you are trying to sell $800 water colours online, you may have more difficulty. Current clients who are familiar with your style and quality may buy additional pieces online, but you may have trouble convincing a new web visitor to part with that much money without visiting your gallery. On the other hand, you only have to sell a few per year to pay off your site expenses.

Do You Sell Your Services Online?

If you don’t collect money directly through your web site, you have to do your calculations another way. For instance, if your dental office has a web site, you’ll need to find out which of your new clients discovered you through your site. An obvious way is just to ask them and keep track of their total bills.

Another easy way is to post a money-saving coupon on your site for first-time visitors only. When someone brings in a coupon, tally their yearly charges with other coupon users. You can easily see if your online efforts are paying for themselves.

Another thing for service providers to calculate is the life-time value of a new client. If someone finds your office online and is a patient for ten years, that one person paid for your site many times over. And don’t forget, they may send you referrals as well.

Non-Profits Are Different

(But you knew that.) Yes, these wonderful folks will have different goals for their web site, although raising funds online is becoming more common. They may need to consider intangible qualities that are difficult to put a price tag on. How do you measure goodwill? How do you quantify the value of information that visitors get from your site? What price do you put on the publicity your web site receives in the media? These are questions for the board of directors and the answers will vary quite a lot. One way or another, if the web site doesn’t contribute to the bottom line in some way, revisions are in order.

Help! My ROI Is Sinking!

If you know for sure your web site is an albatross around the neck of your business, it may be time to cut it off. But before you do, here are a few things to consider.

First, the cost of your web site, your web hosting and your URL are probably all tax-deductible business expenses. (Check with your tax professional to make sure this applies to your particular situation.)

Second, you should try and isolate the problem(s). Are you getting enough visitors to your web site? If not, you may have a problem with the way your site has been optimized for the search engines. (See my article on Creating the Perfect Home Page [http://www.zmoon.com/articles/home_page.htm] for ideas on doing better on web searches just by tweaking your text.) You might also need to consider buying traffic on your key words through Overture (http://www.overture.com/) or Google’s AdWords (https://adwords.google.com/) program.

Of course you need to have a traffic analysis tool in order to keep track of your visitors. From the simplest counter to the most complex tracking software, there is a tool to match your budget and needs. The three I favor are Site Meter (http://www.sitemeter.com/ [free or $6.95 a month]), HitsLink (http://www.hitslink.com/ [free with a banner on your site or $39.95 a month]) and WebTrends (http://www.webtrends.com/), the top of the line (if you have to ask......)

Make Your Site a Money Magnet

If you are getting enough traffic to your site, but no one is buying, then you need to look at your content and presentation. If you are serious about turning clicks into ka-chings, I heartily recommend you get either the Service Sellers Masters Course (http://www.zmoon.com/cgi-bin/pl.pl?service) or the Netwriting Masters Course (http://www.zmoon.com/cgi-bin/pl.pl?wc) from Ken Evoy’s SiteSell! operation. Just send a blank email to see how much information he packs into these free courses.

Keep in mind that most web visitors are looking for information first, and to buy later, if at all. Make sure you keep adding new value in the form of critical information for your potential customers. It’s not only a good service to your visitors, but will eventually mark you as an expert in your field, which can only help your reputation.

As an added bonus, each new page offers web searchers another way to land on your site. Right now, a majority of my visitors are coming to my site after searching for phrases that occur in my articles. I would have only a fraction of the visitors I do if they were only arriving after searching for the phrase, “web designer.”

Conclusion

You should consider your web site costs as a business expense. One way or another, your site must pay for itself in order for you to justify its continued funding. To make a sound decision you must calculate how much new business is coming to you through your web site and if that offsets the cost of operating and maintaining your site. If it’s not, you should reevaluate your search engine strategy and your web presentation. Continue to add value to your site by creating new content that appeals to your clientele and that attracts new visitors to your site through alternative search phrases.

Good luck!